From Finance to Outcomes: Using Contribution Analysis to Examine Results-Based Blended Finance in Education

• In Event: Financing Education for Social Cohesion: Blended Finance Approaches in Emerging Economies

Proposal

Considering persistent funding gaps in education, the global community has increasingly called for a diversification of financing sources to meet SDG4. Recent international policy fora such as the 2024 UNESCO Education Meeting and the Fourth International Conference on Financing for Development have actively promoted the use of blended finance—which increasingly incorporates results-based financing—to unlock new and additional funding (UNESCO, 2025; United Nations, 2025). Blended finance instruments – usually defined as the utilisation of concessional capital from government and philanthropic funds to attract private investment – are often justified by their potential to foster innovation in service delivery, improve social outcomes, and add to the overall financing through additionality (Edmiston & Nicholls, 2018). At the same time, the introduction of private sector incentives and quasi-market mechanisms into the public education sector has raised concerns about the implications for equity, quality, and democratic accountability (Author, 2021).

Against this background, research on the ways in which blended finance mechanisms are designed and implemented, and how the intended outcomes are expected to be achieved, remains limited. Furthermore, each blended finance initiative has its own internal logic, shaped by the actors involved, the specific financing structure adopted (e.g., concessional loans, guarantees, returns-based incentives), the type of educational outcomes targeted, and the context of project implementation. Understanding this internal logic is essential for assessing whether and how the financing method enhances additionality in both financing and outcomes.

This presentation introduces a methodological approach for analysing blended finance, particularly results-based financing, in education using Contribution Analysis (Mayne, 2020). Contribution Analysis offers a structured method for developing a financial theory of change—beginning with the mechanism's design—and assessing whether the intended causal pathways manifested in practice. This includes examining the assumptions about how financial arrangements (e.g., results-based incentives, provision of operational capital) are expected to influence education providers and how these lead to measurable improvements in educational outcomes. The approach explicitly considers how other influencing factors may have also contributed to or constrained the observed results.

Drawing on research on the Impact-Linked Fund for Education (ILF-E), the presentation shows how this approach can help unpack the internal logic of various blended finance instruments. The ILF-E, a results-based financial initiative, merges concessional capital with outcome-linked incentives, serving as a useful example of whether and how diverse financial structures produce both financial and educational additionality. The ILF-E offers three results-based financing instruments – Social Impact Incentives (SIINC), Impact-Linked Payments (ILP) and Impact-Linked Loans (ILL) – to incentivise market-based education providers serving marginalised populations in Sub-Saharan Africa and the MENA region. Using Contribution Analysis, our research examines how these instruments are intended to align financial incentives with the achievement of educational outcomes, and to what extent this has materialised in three supported enterprises.

By presenting both the analytical framework and emerging insights from the ILF-E case, we aim to contribute to a more nuanced understanding of blended finance in education and to inform ongoing debates about the promises and limits of results-based financing for achieving SDG4.

Authors

• Arushi Terway, NORRAG

• Archana Mahesh Mehendale