Identifies weaknesses in current financing arrangements for postconflict countries and fragile states, with a focus on official development assistance (ODA). Tensions persist between business-as-usual development policies and policies responsive to the demands of peacebuilding. The preferential allocation of aid to 'good performers,' in the name of maximizing its payoff in terms of economic growth, militates against aid to fragile and conflict-affected states. If the aim of aid is redefined to include durable peace, the conventional performance criteria for aid allocation lose much of their force. Yet the difficulties that initially prompted donors to become more selective in aid allocation remain all too real. The donor move to selectivity came in response to evidence that in some contexts aid has perverse effects on economic performance. At present, neither donors nor recipients have anything close to an adequate idea of how aid monies are being spent, let alone the impacts of this spending on peacebuilding and statebuilding.