Strengthening the Relationship between Challenge Fund Models and key Aid Effectiveness Indicators

March 2010 to May 2010

Global Funds and Partnerships are an increasingly significant part of the global aid architecture. GFPs have, in varying ways, adopted a challenge fund model. While this model has advantages – including encouraging a focus on results – there is an inherent tension between the challenge fund approach and aspects of the Aid Effectiveness agenda.

To further understand these challenges, as well as the way forward, DfID has commissioned a paper that aims to:

  • Set out the key rationale, and strengths and weaknesses of operating a challenge fund model
  • Make recommendations on how the model can be potentially strengthened further through closer alignment to key aid effectiveness descriptors
  • Consider the implications for the international division of labour