The literature review draws on academic and research literature and begins by examining the development of PBOs from structural adjustment lending (SAL) in the 1980s, to budget support in the late 1990s onwards: including the theoretical underpinnings of these various approaches. It looks at some of the key changes that have occurred in the aid environment over this period. One key change has been the move away from conditionality designed to bring about (or even “buy” reforms), to an approach to aid that is aimed at supporting government plans and priorities. The review examines why these shifts occurred, highlighting aspects such as changes in the aid environment facilitated by the Paris Declaration, the move towards an aid effectiveness agenda and a greater focus on results. The review also explores the main concerns that relate to PBOs. It assesses the issue of risk, particularly fiduciary risk, which needs to be managed when using PBOs, as funds are channelled through government systems. It examines conditionality and how it can most effectively be used, the extent to which aid can