RESULTS-BASED FINANCING AND THE EFFICIENCY OF ECONOMIC GROWTH: EVIDENCE, TRANSMISSION CHANNELS, AND INTERNATIONAL COMPARISON
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Results-Based Financing (RBF) links the allocation or disbursement of funds to the verified achievement of predefined outputs or outcomes. This article examines whether and how RBF can improve the efficiency of economic growth—raising growth outcomes per unit of public spending—through stronger incentives, improved public financial management (PFM), and higher-quality public investment and service delivery. Using a rapid evidence review and comparative institutional analysis, the paper synthesizes lessons from (i) results-linked financing operations using disbursement-linked indicators, (ii) performance-informed budgeting reforms, and (iii) sector-level RBF initiatives. International evidence suggests RBF is most effective when it relies on a small set of meaningful indicators, credible verification, and integration with medium-term budgeting and spending reviews. Persistent risks include limited use of performance information in budget allocation, indicator overload, and strategic gaming. Policy implications are discussed with a brief comparison between OECD practice and reforming systems such as Uzbekistan’s medium-term fiscal strategy agenda.
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