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COD Aid builds on existing initiatives that strive to disburse aid against results, but it takes the idea further by linking payments more directly to a single specific outcome; by giving the recipient increased authority to achieve progress however it sees fit; and by assuring that the recipient country’s progress is transparent and visible to its own citizens.
The approach can be applied to any sector in which there is a shared, measurable outcome toward which governments and donors are committed to making progress. It can also be applied by governments to their own transfers to states or districts. Once an outcome indicator has been identified and the basic contract has been negotiated, any number of donors—whether public or private—can pool funds without creating additional reporting requirements or changing the structure of the aid arrangement. The clarity of the disbursement against outcomes may reduce the volatility of aid that often results from domestic policy disputes in donor countries or changes in foreign-policy priorities. Most of all, recipient countries have the opportunity to focus on what they need to do to make progress rather than spending time documenting expenditures or focusing on strategies that are most likely to please their funders.
This page links to research, analysis, discussion and reactions to the idea by CGD staff, external researchers and practitioners.
Cash on Delivery Aid book. Cash on Delivery: A New Approach to Foreign Aid explains the approach in detail and investigates its application to the primary education sector. The book includes model term sheets for contracts that could be used for any COD Aid agreement.