Publication: Targeting subsidies through output-based aid
Date
2008-10
ISSN
Published
2008-10
Author(s)
Mumssen, Yogita
Kumar, Geeta
Johannes, Lars
Abstract
Output-based aid (OBA), or
performance-based grants, can be used to help target
services to the poor. Under OBA schemes, service providers
are compensated only after delivery of a specified output,
such as water connections of a specified quality, to a
targeted beneficiary. In most cases that targeted
beneficiary would be a poor household or community.
Subsidies are provided in the form of payments for the
provision of service to targeted groups to help cover the
gap between the cost of provision and the user's
ability to pay. Targeting subsidies involves challenges. OBA
can provide opportunities to enhance targeting and lead to
greater transparency in reaching the poor. While OBA is not
yet mainstreamed in all infrastructure and social services
sectors, the principles and mechanisms are compelling, and
initial results promising.
Citation
“Mumssen, Yogita; Kumar, Geeta; Johannes, Lars. 2008. Targeting subsidies through
output-based aid. OBApproaches; Note No. 22. © World Bank, Washington, DC. http://openknowledge.worldbank.org/handle/10986/11012 License: CC BY 3.0 IGO.”