
Shifting gears: Challenges in scaling outcomes partnerships in government and strategies for success
This report explores the barriers to expanding outcomes-based partnerships in public service delivery. It provides actionable strategies for policymakers, investors, and stakeholders to enhance policy innovation and effectiveness. Key insights include addressing institutional challenges, political dynamics, and public-private collaboration for sustainable impact.
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OVERVIEW
Introduction
In 2024, nearly half of the world’s population participated in elections, reflecting widespread dissatisfaction with the status quo and an increased demand for reform. Governments, particularly in emerging market and developing economies (EMDEs), face pressure to enhance public service delivery while maintaining fiscal responsibility. The annual investment gap for social protection and healthcare stands at $1.2 trillion, with an additional $460 billion needed for education.
Outcomes partnerships provide an effective model for bridging this gap. Evidence suggests that outcomes-based funding leads to better results at lower costs compared to traditional funding models. However, despite the growing impact investment market, with ESG-labelled assets reaching $30 trillion, governments have yet to fully embrace these mechanisms.
Identifying challenges for implementation of outcomes partnerships
Institutional challenges
Governments face multiple institutional barriers when adopting outcomes partnerships. Traditional budget cycles prioritise spending over measurable impact, limiting the scalability of multi-annual programmes. For example, government agencies often struggle with ensuring continued funding beyond a single fiscal year, which discourages long-term planning. Some partnerships, such as Colombia’s Empleando Futuro, have mitigated this by integrating co-payers like international development agencies to sustain funding.
Rigid public contracting procedures also present challenges. Many governments lack specific regulatory frameworks for outcomes-based contracting, leading to legal uncertainties and reluctance to engage in innovative procurement models. Countries like Turkey have addressed this by using template contracts to standardise agreements and reduce legal barriers.
Limited technical expertise within government agencies further hinders adoption. The complexity of outcomes-based models necessitates specialised knowledge, which is often lacking, particularly in EMDEs. In response, countries like the UK have established centralised units, such as the Civil Society and Youth Directorate, to provide technical support and foster cross-agency collaboration.
Additionally, governments often lack comprehensive data management systems, limiting their ability to monitor and evaluate outcomes effectively. Transparent data platforms, like those used in Ghana’s Accountability for Learning Outcomes Project, have helped address this by enabling real-time programme adjustments based on performance metrics.
Political challenges
Political backing is crucial for the success of outcomes partnerships, but changes in government and ministerial reshuffles can disrupt continuity. Even with political support, resistance from technical staff can slow implementation. In Morocco, the successful rollout of an outcomes partnership required early alignment with the finance ministry to secure funding and approvals.
Political instability further complicates long-term planning. In many EMDEs, high turnover among public officials undermines institutional knowledge retention, reducing the feasibility of multi-annual projects. To counteract this, some initiatives have introduced backbone organisations that coordinate across stakeholders, ensuring continuity despite political shifts. The Cali Progresa con Empleo programme in Colombia used this approach to minimise government liability and sustain operational effectiveness.
Perception challenges
Misperceptions around public-private cooperation often deter governments from adopting outcomes partnerships. Some stakeholders equate these models with privatisation, despite their focus on enhancing service delivery rather than transferring ownership. In Argentina, the Buenos Aires Youth Employment SIB established a Learning Committee to document best practices and ensure continuity despite political transitions.
Similarly, private investors may hesitate to engage in government-led initiatives due to concerns about financial risk and regulatory uncertainty. Trust-building efforts, such as clearly defined governance structures and stakeholder engagement, have proven effective in addressing these concerns. Rwanda’s Village Enterprise programme exemplifies this approach by fostering collaboration between the government and social enterprises to implement poverty reduction initiatives.
Long term strategies to boost outcomes partnerships in government
To scale outcomes partnerships, governments must shift the narrative from cost savings to policy innovation and systemic change. These models should be framed as tools for improving service effectiveness rather than mere financial instruments.
Flexibility in implementation is also essential. Rather than waiting for dedicated regulatory frameworks, governments can adapt existing contracting and budgeting mechanisms to accommodate outcomes-based funding. This reduces delays and facilitates faster adoption.
Building ecosystem readiness is another critical factor. Governments should invest in capacity-building initiatives for political leaders and technical staff to enhance their understanding of outcomes-based financing. Open-access data and cross-learning initiatives between experienced and emerging markets can further support this transition.