Political Economy Analysis and Economic Evaluation of Results-Based Financing in Afghanistan

Results-based financing (RBF) has been receiving increasing attention in recent decades. RBF involves a transfer of funds based on the attainment and verification of predetermined outcomes. Afghanistan has implemented RBF in the form of performance-based contracting (PBC) since 2003 and performance-based financing (PBF) between 2010 and 2015. The PBC experience was successful in delivering maternal and child health services. However, the PBF programme had minimal effect on the delivery of maternal and child health services. Using a political economy lens, this thesis answers the question of what factors shaped and affected the PBC and PBF programmes and their outcomes in Afghanistan. It also examines the cost-effectiveness of the PBF programme relative to standard practice. This thesis provides support for the assertion that both political economy factors and value for money are critical in the design, adoption and implementation of RBF programmes. RBF enforces different arrangements for the distribution of resources and provides opportunities or threats for actors through changing their functions and modifying institutional processes. Subsequently, a new economic and political situation comes into existence. Economic evaluation compares the costs and consequences of alternative courses of action recommending which health care investments are most efficient, guiding resource allocation in health. Therefore, careful consideration and caution is required when adopting and implementing RBF programmes. Policymakers and researchers should increasingly focus on the political economy aspect of RBF programmes in conjunction with economic evaluations, particularly in the context of fragile and conflict-affected setting to ensure that the technical outcomes of economic evaluations are suitably received in the context of highly political situations. If RBF programmes are designed around a full understanding of political economy and value for money, RBF can potentially be a powerful tool to achieve better outcomes