 OBA Fact Sheet (updated in September 2008)
Output-Based Aid (OBA) is a strategy for using explicit performance-based subsidies to support the delivery of basic services where policy concerns would justify public funding to complement or replace user-fees. Affordability concerns for particular groups of users, positive externalities, or the infeasibility of imposing direct user-fees represent examples of the types of policy concerns that have motivated governments to use public funds to support the delivery of basic services.
OBA involves delegating service delivery to a third-party, typically private firms, but also public utilities, NGOs, and community-based organizations, under contracts that tie disbursement of the public funding to the services or outputs actually delivered.
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