Asian Development Fund

Performance-Based Allocation
Updated: 4 June 2009

The PBA policy guides the allocation of ADF resources. Aid is most effective in accelerating poverty reduction in countries where policy and institutional performance are strong. The policy supports poverty reduction and sustainable development by allocating ADF resources based on country performance along with country needs.

ADB conducts Country Performance Assessments (CPAs) for all ADF-eligible developing member countries (DMC). [ PDF ] Each country’s performance is assessed based on

• the coherence of its macroeconomic and structural policies
• the quality of its governance and public sector management
• the degree to which its policies and institutions promote equity and inclusion
• the performance of its portfolio of on-going projects and programs

The policy also takes into consideration other factors, including country needs, absorptive capacity, and special circumstances.

The PBA exercise determines allocation shares for ADF borrowers using a formula that takes into account

• country performance
• country size, as measured by population
• economic need, as measured by Gross National Income (GNI) per capita