Government mobile salary payments in Afghanistan (Project Expansion)

Project Active from to State, Political Economy and Mobile money

  • In this project, researchers evaluated the introduction of mobile salary payments (MSPs) for employees in the Afghan Ministry of Labour, Martyrs, Social Affairs and Disabled (MoLMSAD).
  • MSPs have the potential to decrease the amount spent on ‘ghost’ workers and increase satisfaction amongst bureaucrats by paying them more accurately and on time, and in turn, increase the effectiveness of the civil service.
  • Results show that a switch to mobile-based payments is popular and effective amongst trialled employees, with a significant savings potential if fully scaled up.
  • This study has now fed in to a scale up of MSPs to other ministries in the Afghan government, including the Ministry of Education.

Afghanistan’s route out of the fragility trap will rely on it having a motivated, effective civil service that spends efficiently. This starts with its payroll. Motivated civil servants need to be paid regularly and accurately, but too often, frequent delays and shortfalls in government salaries undermine this, and in turn dampen the effectiveness of the state. Furthermore, government payrolls are too often populated by ‘ghosts’ – those who receive a salary but do not work – potentially wasting significant amounts of government cash. In this project, researchers, in collaboration with the government of Afghanistan, conducted a study evaluating a trial of a new, mobile phone-based electronic payment system for salaries (MSPs) that seeks to solve these issues.

Researchers evaluated the introduction of MSPs for selection of employees in the Ministry of Labour, Martyrs, Social Affairs & Disabled (MoLMSAD). Researchers collected baseline and endline survey data on salary experience, transaction costs, satisfaction, and related outcomes from approximately 1,150 employees, and complemented this with administrative records and mobile transaction data from all participating employees. From this data, they also estimated the potential cost savings for the ministry from a transition to MSPs.

Results indicated that in MoLMSAD, there was a high-level of employee satisfaction, and significantly less was spent by the ministry on salaries overall. With the money saved, the ministry could more than cover the transaction fees associated with MSPs. Based on these promising findings, MoLMSAD decided to scale up MSPs to all employees in the ministry in February 2017.

Since the original work carried out with MoLMSAD, the Afghan government has received nearly £1 million in funding to scale up MSPs to other government departments. In March 2018, plans were announced for MSPs to be rolled out in the Ministry of Education, potentially covering over 250,000 employees across Afghanistan.