Performance based financing (PBF) links funds or payments to service providers to results achieved and gives them considerable autonomy in the use of these funds. The strategic approach is appealing to many individuals and organizations as it motivates them to perform better and channels resources directly to the frontlines. This in turn fosters greater accountability. Using this approach has been popular in different sectors with some promising results emerging.
But how do PBF schemes compare to traditional Public Financial Management (PFM) systems? Do they have to be fundamentally different between PFM systems? The answer is ‘No’.