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Output based aid

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Using explicit performance-based subsidies to support basic services where conditions justify public funding to complement or replace user-fees.

Experience with OBA [http://www.gpoba.org/about OB is new, but growing and interesting. The difference with other subsidies is that OBAs are targeted , for example , to the poorest families (Cambodia) or to the poorest neighbourhoods (Paraguay) clarifying why subsidy is given and they are performance-based. The provider largely self-finances the service, receiving reimbursement mostly after the verification of successful delivery. The latter may reduce possibilities for small providers with limited capital. A bonus-malus approach might be more feasible, perhaps linked to longer-term system performance. (http://www.gpoba.org/documents/OBApproaches_What_is_OBA.pdf).

OBA uses explicit performance-based subsidies to support the delivery of basic services where it is justified using public funding to complement or replace user-fees.

The core of the OBA approach is the contracting out of service delivery to a third party, usually a private firm, where payment of public funds is tied to the actual delivery of these services. The [http://www.gpoba.org Global Partnership for OBA ] is supporting programmes in different regions and sectors, including working with SSPs for on-site sanitation in Dakar and utilities in Punjab ( http://www.gpoba.org ).

== References ==

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