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December 2013

As 2013 draws to a close, the COD Aid team is reflecting on all we’ve learned from conversations and progress with results-based aid pilots over the last year. Although the number of examples of truly outcomes-based, country-owned aid programs is limited, there has been growing interest in this kind of approach, and lessons that we can start to draw from many sectors including health, education and forests, as we report below.

We welcome your thoughts, questions, and feedback about Cash on Delivery Aid, which you can send here.

Best wishes for the holiday season!

Rita Perakis
Program Associate
Center for Global Development

Seen and Heard

The Asian Development Bank has begun to roll out a results-based lending pilot program in the education sector in Sri Lanka. ADB representatives say that linking disbursements to results indicators allows them to be more responsive to the needs of developing country members. A description of the ADB’s results-based lending policy, including a policy paper that highlights Cash on Delivery Aid, can be found here.

At the Oslo REDD Exchange 2013 in Norway, Bill Savedoff spoke on a panel about Payment for Performance: Key Lessons and Challenges for REDD+ (full video is here). The panel discussed key lessons from the implementation of REDD (Reducing Emissions from Deforestation and Forest Degradation) programs that link funds to verified evidence of reduced deforestation, as well as from other sectors, to inform the design of future REDD programs. CGD senior fellow Frances Seymour chaired the REDD Exchange – a convening of 400 representatives of REDD+ and donor governments, civil society, multilateral organizations and the private sector – and gives a summary of the events’ key messages in this blog post.

Can results-based payments reduce corruption? Charles Kenny and Bill Savedoff provide some answers in a new CGD Working Paper. They explain that results-based approaches to foreign aid may be less vulnerable to corruption than traditional approaches that track the purchase of inputs and activities.

A recent report by the C.D. Howe Institute that assesses Canadian foreign aid modalities proposes a number of ideas for more effective aid delivery, including COD Aid.

In this recent blog post about results-based aid in the forest sector, Frances Seymour takes a closer at the commonalities between COD Aid and REDD+, and whether the two approaches might have been "separated at birth."

Jonah Busch writes that increased support for international pay-for-performance initiatives in the forest sector was a positive conclusion at the 19th Conventiontion of the Parties of the United Nations Framework Convention on Climate Change (COP 19) in Warsaw last month.

On the Horizon

CGD is drawing lessons from past and current development programs that have features of COD Aid, to be shared in a new working paper in 2014.

The Global Fund is exploring Cash on Delivery Aid pilot programs, building on the recommendations of the CGD Working Group report More Health for the Money: Putting Incentives to Work for the Global Fund and its Partners. We will be closely watching for more news.

Development Impact Bonds are a new approach to paying for outcomes in development, using a private-investment backed financing mechanism. The Working Group report Investing in Social Outcomes: Development Impact Bonds, released by CGD and Social Finance this fall, explains what DIBs are and how they can solve development challenges. For more on DIBs, see these recent blog posts on who might invest in DIBs, and how they can encourage a process of 'learning by measuring.'