Ideas to Action:

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October 2, 2013

Can Results-Based Payments Reduce Corruption? - Working Paper 345

A common objection to results-based programs is that they are somehow more vulnerable to corruption. This paper explains why results-based approaches to foreign aid may be less vulnerable to corruption than traditional approaches which track inputs and activities. The paper highlights corruption costs associated with failing to generate benefits and outlines the conditions under which one approach or another might be preferable. It concludes that results-based programs may be less vulnerable to corruption costs associated with failure because they limit the capacity of dishonest agents to divert funds unless those agents first improve efficiency and outputs.