The Collective Learning Initiative (CLI) on outcomes-based financing for early childhood care and education was launched through the Education Outcomes Fund (EOF) in 2024 to strengthen collaboration among stakeholders working at the intersection of outcomes-based financing (OBF) and Early Childhood Care and Education (ECCE). Led by the GO Lab and NORRAG, the initiative aims to foster peer learning and knowledge exchange between stakeholders, contributing to a growing global knowledge base.
Over the past year, the CLI has continued to bring together diverse voices through workshops, interviews, and shared reflections, helping to deepen collective understanding of how OBF approaches can enhance the quality and sustainability of ECCE financing. Our various knowledge products, including a detailed synthesis of the 4th and 5th Knowledge Exchange session can be found here.
The sixth and final Knowledge Exchange Session of 2025 marked an important milestone for the CLI on outcomes-based financing in early childhood care and education. After nearly two years of shared learning, the community shifted its focus from experimentation to institutionalisation, by closely examining the question what does it take to move from pilots to sustainable practices embedded in the education systems? The session combined rapid updates from the field with two in-depth technical discussions on adapting measurement tools and costing, alongside a collaborative exercise to map practical resources for governments and practitioners. This document synthesises the key insights that emerged.
Summary of Key Insights from Knowledge Exchange Session
Cross-Cutting Themes
Across the discussions, several cross-cutting themes underscored the broader shift from experimentation to institutionalisation in outcomes-based financing for ECCE:
These cross-cutting reflections set the stage for two deeper technical discussions that explored how institutionalisation plays out in practice. While the broader themes highlighted shifts in mindset and system design, participants also examined the operational foundations required to sustain OBF in ECCE systems.
The following technical spotlights draw on concrete experience with measurement adaptation and costing, illustrating how these system-level considerations translate into practical tools and decisions:
A core operational challenge in OBF for ECCE is ensuring that measurement tools are credible, feasible, and appropriately aligned with incentives. Experience across multiple contexts shows that successful adaptation begins with alignment to national systems: tools must reflect national curricula, standards, and policy priorities to ensure legitimacy and long-term sustainability. Structured stakeholder consultation plays a critical role in strengthening ownership, with item-by-item reviews involving policymakers, practitioners, and technical experts helping to identify cultural, linguistic, and feasibility issues early in the process. Piloting and statistical validation are equally essential to protect psychometric integrity and ensure that adapted tools remain robust. At the same time, incentive effects must be carefully managed. Transparent scoring frameworks, the use of alternate item banks, and the inclusion of non-scoring contextual questions can help mitigate risks such as “teaching to the test” or other distortions. Participants emphasised that adaptation is inherently time-intensive, often requiring multi-stage processes over several months; attempts to shortcut this work can undermine both fairness and credibility. Importantly, even in fragmented policy environments, consensus can be built through deliberate stakeholder engagement and reference to widely accepted developmental constructs.
Costing underpins nearly every decision in outcomes-based financing. In a context of shrinking aid budgets and heightened scrutiny of public spending, rigorous and transparent cost analysis is indispensable. Participants emphasised that even relatively simple cost-per-child calculations can generate valuable insight, particularly when grounded in a clear theory of change that links inputs to outputs and intended outcomes. Such analysis helps distinguish between cost economy and cost effectiveness, underscoring that the least expensive option is not necessarily the most impactful. Importantly, costing must extend beyond direct service delivery to include system-change investments, such as data infrastructure, procurement reform, and workforce development, which are central to OBF’s long-term value and sustainability. A recurring challenge is the absence of clear comparators against which to benchmark performance. In these situations, transparent modelling of alternative approaches can still support informed decision-making, provided underlying assumptions are made explicit and open to scrutiny.
Two years of collective learning suggest that outcomes-based financing in early childhood care and education is moving from experimentation toward institutionalisation. Yet the transition from pilots to embedded practice is neither automatic nor simple. It requires careful adaptation of measurement tools, transparent and realistic costing, explicit design for equity, strong alignment with national systems, and sustained investment in local capacity.
OBF is not simply a financing mechanism. At its best, it provides a framework for clarifying priorities, aligning fragmented actors around shared outcomes, strengthening accountability, and fostering continuous improvement across early childhood systems.
Ultimately, long-term success will depend less on technical design alone and more on institutional ownership, collaboration, and a shared commitment to improving outcomes for young children.