VNG International

Public finance

Fund management

Institutional development

In performance-based financing, a partner or development fund finances the outputs of local government services rather than their inputs. For example, a hospital does not get money for salaries but gets paid a certain amount of money for each cesarian section performed. This approach respects the management autonomy of local government service departments, and values a debate about performance over a debate about needs. Cordaid applies the approach in health and education in the province of South Kivu in the Democratic Republic of Congo, and wishes to extend it to district-level authorities (who manage among other things the registries and certain types of public works) and locally-managed parts of the security and justice sector.

The specific objectives of VNG Internationals consultancy were:

- To advise on strategic directions for the performance-based financing as an alternative model for public expenditure

- To evaluate the current instruments and procedures

- To improve performance contracts and indicators of local government performance

The expected results of the project are:

- Availability of new instruments and contracts

- Extension of the approach into new sectors on a pilot basis