Output-Based Aid : Supporting Infrastructure Delivery Through Explicit and Performance-Based Subsidies
Increasing access to basic infrastructure, and social services is critical to reducing poverty, and achieving the Millennium Development Goals (MDGs). However, increasing access is a challenge because of the gap between what it costs to deliver a d...
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| Format: | Brief |
| Language: | English |
| Published: |
Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2005/03/6672639/output-based-aid-supporting-infrastructure-delivery-through-explicit-performance-based-subsidies http://hdl.handle.net/10986/11046 |
| Summary: | Increasing access to basic
infrastructure, and social services is critical to reducing
poverty, and achieving the Millennium Development Goals
(MDGs). However, increasing access is a challenge because of
the gap between what it costs to deliver a desired level of
service, and what can be funded through user charges.
Subsidies have often played a role in funding this gap, for
a variety of socio-economic reasons. However, given the
political commitment by a number of countries to increase
aid flows, but at the same time the mounting concerns of aid
effectiveness, it is critical that subsidies be linked to
the actual delivery of services, or "outputs." One
way to do this is through Output-Based aid (OBA), a strategy
for using explicit performance-based subsidies to deliver
basic services-such as water, sanitation, electricity,
transport, telecommunications, education, and health
care-where policy concerns would justify public funding to
complement, or replace user fees. OBA can help improve aid
effectiveness by: increasing accountability; improving
transparency; increasing value for money; and, reducing
economic distortions. |
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