Program-for-results (PforR) is an innovative instrument of World Bank financing which links disbursements to results in country-defined programs. This recently adopted instrument seeks to give recipient countries a greater sense of participation, independence and ownership over the design and implementation of their development progress. Accordingly, a key dimension of PforR is capacity development - strengthening the ability of State institutions to perform functions, solve problems and set and achieve objectives that will lead to sustainable development progress. This paper will examine whether the World Bank’s legal framework for PforR is likely to enhance the explicit goal of capacity development. In particular, this paper will assess the extent to which the specific disbursement-linked indicators in a current PforR project in Nepal reflect this goal. Finally, this paper will address the apparent tension between (i) ensuring adequate baseline standards for program eligibility and implementation (from the World Bank’s risk allocation perspective), and (ii) achieving capacity development through greater reliance on country systems. While PforR has the potential to achieve deeper and more sustained development impact than traditional transactions-based approaches, it also runs the risk of being perceived as a lowering of the World Bank’s safeguard standards.
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