Result-based financing (RBF) is increasingly recognized as a catalyst for innovation. This approach ties financial disbursements to the verified achievement of pre-agreed results, placing the responsibility for achieving these results and selecting the necessary measures solely on the project partner. By allowing partners to experiment with new methods to achieve their goals, RBF fosters innovation and efficiency in tackling development policy challenges.
However, it is crucial that project partners possess the capacity to independently achieve these results. Consequently, relevant systems on the partner side must be evaluated beforehand to ensure they are equipped for success.
This edition of "Development in Brief" provides an overview of both the opportunities and challenges associated with RBF and offers a conclusion on its implications.