In Pakistan, a challenge fund aimed at improving service delivery was effective because its managers worked closely with the government at every stage of its operations.


  • The Sub-National Governance programme is working to improve the quality of governance at the provincial and district levels in Pakistan. As part of the programme, the District Delivery Challenge Fund finances pilots that seek to reform the way public services in education and healthcare are delivered to communities. 
  • The fund has been successful in part because at every stage of its operations it worked collaboratively with the government.
  • First, funding opportunities were aligned with government priorities. Second, grantees were required to sign MOUs with government counterparts. Third, the fund empowered key government officials to lead reforms.

Punjab Girls in School Attribute to Department for International Development4

Background: Implementing a challenge fund to improve governance

The Sub-National Governance Programme (SNG) in Pakistan supports the provincial governments of Khyber Pakhtunkhwa and the Punjab to improve basic service delivery, to better meet the needs of citizens, especially the poor, women and girls. The District Delivery Challenge Fund (DDCF), a sub-component of the programme, supports this change through a combination of public sector support and the funding of innovative education and healthcare pilots. Successful pilots are to be scaled up within and across Khyber Pakhtunkhwa and Punjab provinces.

This process aims to develop a practical framework and tools that will enable all districts throughout Pakistan to identify, pilot and evolve bespoke public service solutions after the programme has finished.

The Sub-National Governance programme is funded by the UK government. The District Delivery Challenge Fund component is managed by Coffey.

How the District Delivery Challenge Fund worked with government

The success of the District Delivery Challenge Fund (DDCF) can be partly attributed to its close collaboration and engagement with the government at every stage of its operations. The DDCF worked with the government to: 

• identify themes for intervention,
• establish criteria for award,
• review and select ideas,
• award grants,
• implement and exercise oversight, and
• conduct evaluation.

Aligning funding opportunities with government priorities

While advertising the funding opportunities available and selecting grantees for the fund’s Round 1 and Round 2 pilots, the National DDCF Coordinator consistently collaborated with the government to ensure that the DDCF’s selection criteria and its work remained in sync with government priorities throughout the pilots’ implementation. In Round 1, the DDCF’s pilots focused on the theme of demonstrating new teacher training/governance models, a central government priority. In Round 2, the themes of emergency maternal and child healthcare services, vaccination, transparent and accountable management of medicine in Punjab, and control of communicable diseases and diabetes in Khyber Pakhtunkhwa were aligned with the provincial governments’ priorities. The provincial governments have expressed their interest in adopting the successful pilots because they are responsive to the governments’ needs.

MOUs between grantees and government

After collaborating with the government throughout the grantee selection process, the DDCF required every grantee to sign a Memorandum of Understanding (MOU) with its government counterparts. In Round 1, the grantees signed the MOU with the Directorate of Staff Development. In Round 2, the non-government grantees (two out of four grantees) signed similar MOUs with the Policy and Strategy Planning Unit, which is the government counterpart that will support grantees in testing the new service delivery models. Throughout the pilots’ implementation, the District Coordination Office held periodic meetings with the District Reforms Group to review the pilots’ progress and make mid-course correction where required.

The government’s participation in maintaining oversight throughout the pilots’ implementation phase inspired and nurtured a strong internal ownership by the Health Department and Punjab Information Technology Board. Additionally, the MOUs ensured that these new delivery models were supported within the government. Further, the MOUs generated and sustained momentum for immediate uptake after some pilots began demonstrating that they would be successful. The fact that two out of three Round 1 pilots are now being considered for provincial adoption highlights the effectiveness and impact of this collaborative approach.

Empowering government officials

Another central component to the DDCF’s success was its ability to identify and empower key government officials to lead reforms. In Round 2, the DDCF identified a number of people who hold important positions within government institutions and have the ability to act as change agents. As a result, four of the six pilots are led by these individuals. Already half-way through the implementation of these pilots, there were strong signs for their early uptake and provincial adoption.