World Bank publishes guide for performance-based road contracts

The World Bank has released a working paper explaining how to structure and execute performance-based contracts for managing road infrastructure — essentially shifting from paying contractors for inputs ("fix this pothole") to paying them for outcomes ("keep this road in good condition for five years"). This type of contract ties payment directly to measurable results like road smoothness and safety, rather than rewarding contractors simply for doing work, which changes how governments can incentivize quality and efficiency in road maintenance.

Most road contracts still pay for activities completed rather than results delivered, which means contractors can finish work on schedule and on budget without any guarantee the road will actually stay in good condition. Performance-based contracts create a direct financial incentive to deliver durable infrastructure, which could reshape how developing countries maintain roads and reduce the cycle of rapid deterioration that wastes money and perpetuates poor conditions.