Output-Based Aid for Sustainable Sanitation

Output-Based Aid (OBA) ties the disbursement of public funding to the achievement of clearly specified results that directly support improved access to basic services. OBA has emerged as an important way to finance access to basic services, but experience with OBA approaches in the sanitation sector has remained limited and there have been mixed results. Evidence from existing projects suggests that OBA could improve the targeting and efficiency of subsidy delivery, and help to develop and strengthen sanitation providers. OBA subsidies could be packaged to support services along the 'sanitation value chain,' from demand promotion to collection/access, transport, treatment, and disposal/re-use. OBA approaches for sanitation are no panacea, however, and they need to go hand-in-hand with broader reforms in the sanitation sector.