Performance-based allocation (PBA) of foreign aid: still alive?

Abstract

Performance-based allocation is a principle for the allocation of development assistance between countries, governed by a simple formula for several decades and considered as accepted wisdom, at least at the multilateral level. An official of one of the major donors once even said: “the PBA is a global public good”. In this chapter we explain first what is the meaning of this common principle, now declined in various formulas, second how it has generated major misunderstandings, undermining its legitimacy, third why the exceptions progressively brought to the principle have limited its impact, and finally which options are opened for the revision, the replacement, or the extension of the PBA.

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