Output-Based Aid in Infrastructure: A Tool for Reducing the Impact of Corruption

Corruption in infrastructure leads to big losses. Estimates of the share of construction spending lost to bribe payments around the world range from 5 percent to more than 20 percent. It is important to reduce the financial cost of corruption by limiting bribe payments. But even more important is to ensure that corruption does not reduce the quantity and quality of infrastructure provision. Output-based aid (OBA) is a tool that can help achieve these goals.