Context matters in NGO-government contracting for health service delivery: a case study from Pakistan.

Contracting non-governmental organizations (NGOs) for health service provision is gaining increasing importance in low- and middle-income countries. However, the role of the wider context in influencing the effectiveness of contracting is not well studied and is of relevance given that contracting has produced mixed results so far. This paper applies a policy analysis approach to examine the influence of policy and political factors on contracting origin, design and implementation. Evidence is drawn from a country case study of Pakistan involving extensive NGO contracting for human immunodeficiency virus (HIV) prevention services supported by international donor agencies. A multilevel study was conducted using 84 in-depth interviews, 22 semi-structured interviews, document review and direct observation to examine the national policy design, provincial management of contracting and local contract implementation. There were three main findings. First, contracting origin and implementation was an inherently political process affected by the wider policy context. Although in Pakistan a combination of situational events successfully managed to introduce extensive and sophisticated contracting, it ran into difficulties during implementation due to ownership and capacity issues within government. Second, wide-scale contracting was mis-matched with the capacity of local NGOs, which resulted in sub-optimal contract implementation challenging the reliance on market simulation through contracting. Third, we found that contracting can have unintended knock-on effects on both providers and purchasers. As a result of public sector contracts, NGOs became more distanced from their grounded attributes. Effects on government purchasers were more unpredictable, with greater identification with contracting in supportive governance contexts and further distancing in unsupportive contexts. A careful approach is needed in government contracting of NGOs, taking into account acceptance of contracting NGOs, local NGO capacities and potential distancing of NGOs from their traditional attributes under contracts. Political factors and knock-on effects are likely to be heightened in the sudden and aggressive use of contracting in unprepared settings.