The Kabul model

The Ministry of Labour Social Affairs Martyrs & Disabled (MoLSAMD) in Afghanistan (the equivalent of DWP in the UK or DEEWR in Australia), with technical assistance from the World Bank, are about to begin the contracting of two pilot employment programmes. One aims to open up a formal migration channel for thousands of Afghanistan workers into the Gulf countries. The other is targeting thousands of young, unemployed school leavers in Kabul. Both will be contracted using outcome-based models. Around 80% of the payments to contractors will be conditional on job entries and sustained employment. (The notices inviting Prequalification will be published at the end of June.)

Back in the mid 90s, like many countries with similar economies, the UK had a large number of people trapped in very long-term unemployment (as a result of all sorts of personal, social and geographical challenges), as well as around one million young people struggling to find work and at risk of becoming trapped themselves. The context could surely not be more different, but the characteristics of these hardest hit groups are echoed loudly in Afghanistan (and other such fragile states) right now. Are there lessons in the way the UK responded that could be applicable in Kabul and beyond?

The UK at that time had, arguably, the most sophisticated and well-resourced public employment service in the world. It held the largest database of job vacancies in Europe, posted on little white cards on the walls of Jobcentres in every town across the country. A key feature of the system was (and still is) its level of intervention: anyone registered as unemployed and in receipt of benefit (or ‘social assistance’) was obliged to report to their local Jobcentre on a fortnightly basis. This compares, for example, with the French system, which requires jobseekers to report once every six months.

Alongside this access to opportunities and this intensity of contact, there was a wide-range of programmes to help the jobseekers who needed additional support. This primarily focused on addressing the skills gaps that employers (around the world) report. These might be ‘soft’ interpersonal skills or they might be ‘hard’ vocational skills. Nearly every country does the same thing: investing in such ‘supply-side’ programmes. The most common response to unemployment (encouraged by global institutions and development donors) is investment in vocational skills training.

Back in the UK, many of the long-term unemployed and the youth just seemed impervious to the logic of this response – these training programmes failed them. Indeed, looking round the world it is evident that one of the single biggest constraints on higher employment is the persistent gulf that exists between vocational training and work.

Every country seeks to fix the problem and bridge the gulf. They engage with employers and establish high-level working groups. They undertake innumerable labour market studies, predicting in detail the future demand for every possible kind of job. They take all this data and they use it to rewrite, over and over, the curricula in their classrooms. But, still, the resulting training doesn’t transform the employment chances of their learners.

On the other hand, an outcome-based employment programme does not attempt to define, and pay for, delivery of prescribed content. Under this model, the service provider or contractor is paid if, and only if, the participant gets a job and stays in (or ‘sustains’) that job. The precise way they get there is left open.

Traditional vocational training is top-down and starts with a fixed ‘solution’. It is process driven, and rigid in terms of content and timing. An outcome-based programme is bottom-up, starting with the participant and adapted in response to their needs and situation.

It could be that an outcome-based programme is not only applicable in a Kabul context, but that it is inherently better suited to such a fragile environment as a contracting model. It is better suited precisely because it starts with the individual, not the Westminster or Washington or Brussels view of what should be delivered. It is not importing a contextually, culturally inappropriate solution. Its design demands that delivery must be flexed and localised.

Attaching money to outcomes, rather than multiple inputs (as in training contracts), is potentially very attractive to government and to donors. It reduces the opportunity for corruption because the multiple payment points are done away with. It also demonstrates greater accountability with payments tied direct to impact.

These new contracts in Afghanistan will not be competed on price. The contractors will not be blindly selected on the basis of who offers to do it cheapest (and then cannot afford to deliver at that price). The unit prices (for each enrolment, job and sustained outcome) will be set in advance. The pricing is based on a ‘shadow’ costed operating model, so it is uniquely informed by a commercial analysis of exactly what such a programme costs to deliver. The contractors will be chosen based on the strength of their technical experience and proposals.

The global development community, and the governments they partner with, constantly strive to find the right solutions. Over and over they review and revise, trying to address things like the crippling consequences of unemployment. But maybe the answer lies (at least in part) not in what they are doing/buying but in how they are buying it. These Afghanistan pilots will be watched closely and could have wide-ranging implications.

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