Outcomes-based financing in the new financing for development architecture: Lessons and opportunities for governments, development partners, and multilateral development banks

Outcomes-based financing (OBF) mechanisms have directed over USD 100 billion towards measurable results over the past 15 years across education, health, employment, and climate action. As OBF moves from experimental pilots to mainstream use, governments and development organisations need clearer guidance on how to make these approaches work effectively. This working paper examines new financing approaches that link payments to measurable results. It assesses what makes OBF successful and where challenges arise. Drawing on evidence reviews, case studies, and interviews with 14 governments and international organisations, the study identifies what enables effective implementation: strong leadership, supportive policies, reliable data systems, aligned stakeholders, and flexible programme design. The study addresses common obstacles in adopting OBF and how institutions can integrate these mechanisms into their operations. It also explores how organisations are building knowledge and learning systems to support OBF, and considers future directions for embedding outcomes-focused approaches in development financing. This research is essential for policymakers, development practitioners, and funding organisations seeking practical guidance on designing and implementing results-based financing at scale.