Health Sector Development Program

The program tested a new fund flow mechanism for the health sector. Based on the successful trial the government has increased funding for health at the provincial level, resulting in expanded health services coverage, particularly for maternal, newborn, and child health care (MNCH) services and the provision of free health care for the poor. The framework engendered the provinces to allocate additional funds for non-wage recurrent costs to support the additional services, and demonstrates that block- grant transfers based on sound fiscal planning can be an effective mechanism to reduce transaction costs and expand social services.