Results-based funding - Joint OECD-DIE Workshop - May 2014
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Results-based funding - Joint OECD-DIE Workshop - May 2014

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Stephan Klingebiel of Deutsches Institut für Entwicklungspolitik (DIE) presented on the concept of results-based global development funding (also known as Performance Based Funding or PBF) in Paris, ...

Stephan Klingebiel of Deutsches Institut für Entwicklungspolitik (DIE) presented on the concept of results-based global development funding (also known as Performance Based Funding or PBF) in Paris, 19-20 May 2014. He presented at a workshop that was overseen by the DAC Network on Development Evaluation in conjunction with DIE.

The DAC Network on Development Evaluation (EVALNET) contributes to better development results using evaluation to build a strong evidence base for policy making and for learning.

More on DIE: http://www.die-gdi.de/en/
More on EVALNET: http://www.oecd.org/development/evaluation/

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    Results-based funding - Joint OECD-DIE Workshop - May 2014 Results-based funding - Joint OECD-DIE Workshop - May 2014 Presentation Transcript

    • RESULTS-BASED FUNDING Joint OECD / DIE workshop Stephan Klingebiel Paris, 19-20 May 2014
    • © German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE) 1) Definitions – The “Results Agenda” 2 Results-based Funding Linking interventions closely to results Results-based Aid (RBA) Contract between funder and partner government New RBA types: CoD, PforR, etc. Existing RBA types: EC MDG contracts, performance-tranches in budget support, etc. Results-based financing (RBF): Contract between funder and service provider RBF types: CCTs, Output-based aid, Pay for Performance, etc. Results-based Management (RBM) / Managing for Development Results Strategies for the way organizations operate Results Framework Articulation of different results expected from a particular strategy Results Chain Inputs-activities-output- outcome-impact
    • © German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE) 3 1) Definitions – Common criteria for Results-Based Funding Rationale: Typical aid interventions use inputs or contribute to processes; RBA / RBF is trying to address directly results Input (Provided reources for an intervention; e.g. budget for education) Activity (e. g. construction of schools or hiring additional teachers) Output (Technical results of an intervention; e.g. number of new schools) Outcome (direct effects 'of an intervention; increase of school enrollment) Impact (wider developmental effects; e.g. contribution to poverty reduction because of improved educational outcomes) Disbursement if results are verifiedMeasures by partner country to reach results Results (defined in a donor/recipient contract)
    • © German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE) 1) Definition and criteria 1. Approaches based on contract between funder and partner government, where partner takes responsibility for results. 2. Contract between funder and partner government has to be transparent (use of national systems). 3. Results have to be agreed on in advance. 4. Results should be – Quantifiable, – Achievable in incremental steps (e.g. unit price), – Verified regularly (e.g. annually). 5. Independent verification of results. 6. Payments only upon achievement of goal. No payments, if results are not achieved. 4
    • © German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE) 1) Definition – Common features of RBA 5 Selectivity / Allocation • Millennium Challenge Cooperation Macro results-based funding • Performance tranches in budget support Sector-specific results-based funding • Performance tranches in sector budget support “One result”-specific approach • CoD in education
    • © German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE) 2) Potential & Challenges Possible advantages:  Actions of all actors are focussed on results  Direct use of incentives  Strengthened domestic accountability  Improved verification of aid results 6
    • © German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE) 2) Potential & Challenges Challenges:  Misincentives, unintended consequences & non-systemic strategies  Ambitious requirements  responsiveness of partners to incentives and sufficient capacity  Tension with Aid Effectiveness Agenda  Focus on quantifiable sectors  Delinking of results-approaches and political context 7
    • © German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE) 3) Results-based Funding – a new development business model? Challenges and open questions ahead  Discussions for our workshop  Implementation and technical challenges (i) Does RBA cover ex-post investment needs or is there hardly any link to investment needs? (ii) What is the role of financial and non-financial incentives? (iii) Are results-approaches flexible enough to cover specific needs in different sectors? (iv) How to measure results? How to find a baseline and identify indicators? 8
    • © German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE) 3) Results-based Funding – a new development business model?  How to put into practice the potential benefits of results-based funding? Issues related to the political economy of partner countries and donors Aspects related to partner countries: (i) Results-based funding as part of the country envelope or additional money? Do partner countries have a choice: traditional projects / investments, budget support arrangements …. ii) Impact of on the political economy of main actors: Who is gaining from aid rewards? Who is losing? (MoF, line ministry, Head of State / PM, central / subnational level …) How do donors deal with “pressure to disburse”? Aspects related to donors: Incentive system of aid administrations (role of disbursement rates ...) and consequences for donors because of partner countries performance and choices... 9
    • © German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE) 3) Results-based Funding – a new development business model?  Results-based funding in a changing aid context (decreasing aid dependency, other instruments for collaboration with developing countries ...) (i) What is the catalytic potential of results-approaches? (ii) How to define sustainability in the context of results-based approaches? (iii) What is the potential of non-aid topics (climate change funding, etc.) for results-approaches? 10
    • © German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE) 11 Thank you for your attention! German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE) Tulpenfeld 6 D-53113 Bonn Telephone: +49 (0)228-949 27-0 E-Mail: DIE@die-gdi.de www.die-gdi.de www.facebook.com/DIE.Bonn www.youtube.com/DIEnewsflash