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Linking funding decisions to performance can help the best programs continue and give program managers strong incentives to lead their programs well. Performance-based funding can also have unintended negative consequences, such as inducing single-minded attention to specific targets to the exclusion of harder-to-measure but important goals. This report examines the use of performance-based funding (PBF) among the big three funders of HIV/AIDS programs in developing countries: the U.S. President’s Emergency Plan for AIDS Relief (PEPFAR), the Global Fund to Fight AIDS Tuberculosis and Malaria, and the World Bank’s Multi-Country HIV/AIDS Program for Africa (the MAP). All three have room for improvement.

The Global Fund has an explicit PBF approach and clearly and systematically links funding decisions to performance. But Global Fund data are not always accurate or reliable, and there is room for improvement—for instance, ensuring that recipients report accurate data on the services they provide and the beneficiaries they reach.

PEPFAR places a strong emphasis on results, but it does not systematically use results to inform funding decisions. Unlike the Global Fund, PEPFAR does not always clearly document its funding decisions or release its performance data. Of the three donors, though, PEPFAR has the most accurate and reliable data collection system.

The MAP, like PEPFAR, does not systematically link funding decisions to performance. The MAP does not clearly document its funding decisions and releasing performance data about its grants. The MAP’s data, collected from its partner countries, is not always accurate or reliable.

Putting in place or improving structures and procedures that successfully tie funding decisions to programmatic results is one tool to get more health for the money. For the Global Fund, this means improving existing processes, such as increasing the quality of data upon which funding decisions are made and releasing more information about such decisions. For PEPFAR this requires establishing clearer guidelines on the role that programmatic performance plays in relation to other determinants of funding. And for the MAP, implementing PBF would require a fundamental shift from emphasizing financial management to emphasizing programmatic achievement as a primary determinant of funding decisions.