Mobile Salary Payments in Afghanistan

CEGA researchers helped foster a landmark policy reform in Afghanistan.

In 2018, CEGA researchers helped foster a landmark policy reform in Afghanistan, in partnership with the Ministry of Education.

Afghanistan remains one of the world’s poorest and most fragile states, largely supported by foreign aid. The US alone has spent $133 billion on civilian reconstruction and is committed to continue support for the foreseeable future.

In 2015–in the face of public sector corruption and inefficiencies–the President of Afghanistan announced the transition to Mobile Salary Payments (MSP) for payment of civil servants’ wages. CEGA researchers Joshua Blumenstock and Michael Callen, along with collaborator Tarek Ghani, worked closely with the government to design and study the reform. The team evaluated the costs and benefits of mobile payments, and helped to streamline the registration process, all while developing insights for scale-ups in other countries.

With CEGA’s support, MSPs have been implemented for approximately 4,000 Afghan government workers to date, with the goal of expanding to 30,000 Ministry of Education employees by the end of 2018.

We’ve discovered an immediate benefit of MSPs is a reduction in the disappearance of worker salary due to corruption (“leakage”). Indirect benefits include ensuring workers receive their salaries in full and on time, helping workers automatically save for their retirement, and expanding opportunities for financial inclusion in Afghanistan more broadly.