Output-Based Aid (OBA) ties thedisbursement of public funding to the achievement of clearlyspecified results that directly support improved access tobasic services. OBA has emerged as an important way tofinance access to basic services, but experience with OBAapproaches in the sanitation sector has remained limited andthere have been mixed results. Evidence from existingprojects suggests that OBA could improve the targeting andefficiency of subsidy delivery, and help to develop andstrengthen sanitation providers. OBA subsidies could bepackaged to support services along the 'sanitationvalue chain,' from demand promotion tocollection/access, transport, treatment, anddisposal/re-use. OBA approaches for sanitation are nopanacea, however, and they need to go hand-in-hand withbroader reforms in the sanitation sector.