The Operational Dimensions of Results-Based Financing

Abstract

As part of a growing focus on the effectiveness of development assistance from the World Bank and other agencies, new efforts are being made to relate development finance more closely to outcomes achieved rather than to inputs used—the Results-Based Financing (RBF) approach. We provide a framework for analyzing the operational dimensions of RBF, including the conditions which suit this approach, and how best to define, measure, and report results. We review some of the early World Bank experience with this approach, and highlight strengths and challenges in the range of techniques adopted so far. We also discuss how best RBF can be evaluated and used to greatest effect over the coming years.