Policy Paper

October 2011

Aid Effectiveness in Fragile and Conflict-Affected States

InterAction welcomes this fourth in a series of roundtable meetings to discuss key issues for the Fourth High Level Forum (HLF-4) in Busan. This paper presents InterActions views and recommendations for strengthening the effectiveness of aid in fragile i and conflict-affected states , with recommendations for U.S. positions in Busan and actions at home. The Busan HLF-4 represents a critical moment to bring fragile and conflict-affected states and the more than one and a half billion people who live in them more directly into the aid effectiveness discussion. This is particularly important given that up to 30% ii of Official Development Assistance (ODA) is directed to these countries . In the case of the U.S., close to 60% of State and USAIDs foreign assistance goes to 50 countries iii that are in the midst of, recovering from, or trying to prevent conflict or state failure . The global aid effectiveness agenda must be relevant to fragile states if it is to be truly comprehensive. There is a clear need to review how aid effectiveness principles can be applied meaningfully in fragile states, and how aid can help support the transition away from fragility most effectively. When practiced well, the principles of aid effectiveness depend on legitimate governance and societal participation. These are often weak or lacking in fragile states. Furthermore, there is an inherent tension in the role of aid in fragile states aid that seeks to complement gaps in institutional capacity often risks displacing the growth of those same capacities. At a minimum we need a more dynamic definition of aid effectiveness and a more coherent response to fragility and conflict. The good news is that fragile states, and CSOs from them, are involved in promoting frameworks to lessen their fragility (c.f. the Monrovia Roadmap and Dili Declaration). The HLF-4 in Busan presents an opportunity to increase the sensitivity of aid to fragile and conflict-affected states and to endorse peace- and state-building goals that can inform and guide international community engagement in societies affected by conflict and fragility. To this end, we put forward the recommendations that follow. Support and encourage whole of society inclusion for fragile states in the laniv guage and subsequent processes of the New Deal and Busan Outcome Document Even in fragile states, aid effectiveness still depends on local ownership, country-driven development and use of country systems. In fragile states, these principles need to enable more explicitly the participation of civil society organizations, citizens and other key stakeholders to participate as full-fledged actors. How this is done needs to take into account the particular challenges that fragile states

For more information, please contact: Carolyn Long Director Global Partnerships InterAction clong@interaction.org

www.InterAction.org 1400 16th Street, NW Suite 210 Washington, DC 20036 202.667.8227

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face such as the weaknesses and limitations of institutions and the disabling environment that civil society actors often face due to government hostility or outright repression. Because the playing field is not level, donors need to find creative ways to ensure that citizen voices are taken into account. To support and encourage whole of society inclusion in the Busan Outcome Document and the New Deal, we ask the U.S. government to: Support principles whereby constructive relations between state and society are at the heart of sucv cessful peacebuilding and statebuilding ; Support an inclusive approach whereby commitments to use nationally-led assessments or national planning are not narrowly interpreted as state-led assessments or state-owned solutions and in which civil society has a role to play; Refrain from support for blanket commitments that would mandate a certain percentage of aid to flow through country systems before they are ready and able to program it effectively; and Refrain from support for a focus that is mainly or exclusively on improved aid flows to the 15 countries in the G7+, or reporting that is limited to them. Ensure that state-building is clearly distinguished from peace- and community-building in the Busan Outcome Document While important, state-building alone will not reduce fragility. The specific contexts and vulnerabilities associated with fragility mean that aid effectiveness principles need to be adapted and practiced in ways that are inclusive of peace- and community-building. Sustainable peace and improved governance require an explicit recognition of and support for the role of civil society and the rights of citizens. This is especially true after conflict. To support and ensure the explicit inclusion of peaceand community-building, we ask the U.S. government to: Support aid programs that foster demand for democratic governance by facilitating the delivery of services and community-building by local, state and civil society actors rather than the top-down, center-to-periphery model; Support aid programs that build constituencies for and legitimacy of reconstruction, development

and good governance by prioritizing consultation and community participation, including of those affected by disaster or conflict; and Support aid programs that include verifiable mechanisms for civil society involvement in all phases of peace negotiations, reconciliation efforts, reconstruction and recovery.

Utilize aid strategies that respond most effectively to challenges in fragile states A central lesson learned in fragile states is the need for a long-term approach to state- and peace-building. It is now widely accepted that a sustainable transition out of fragility takes 20 40 years so pushing for quick results can be counterproductive. Therefore, proper pace, sequencing and predictability are critical to aids success in fragile states. In practice, support to local institutions is often secondary to short-term results. Donors also must be tolerant of risk taking in their initiatives in fragile states, but USAID in particular is becoming more and more risk averse. As regards sequencing and predictability, it has long been acknowledged that relief and development are inherently intertwined there is no neat continuum yet official processes delineate between them in ways that too often result in gaps and sudden changes in aid levels or instruments. These shifts can undermine delicate transition processes and the capacity of state, private sector and civil society actors to support development and peace-building effectively. To more effectively engage in state- and peacebuilding, the U.S. government should: Insist that humanitarian actors be allowed to fulfill their mandate under international humanitarian law to address humanitarian vulnerabilities, even as the focus shifts to development; Allow for support that includes emergency response, recovery, transition and development by linking strategies and funding streams; Encourage and provide aid to fragile states that more effectively supports conflict transformation by linking civil society, inclusive of women, with peace negotiations, disarmament, demobilization and reintegration, and transitional justice and revi conciliation ; Improve aid predictability and reduce gaps in funding by working assiduously both the Administration and Congress to shape aid instruments and coordinate with other donors, even while

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working with governing authorities and civil society on transition strategies; Set benchmarks for transition plans that allow for the possibility that even if achieved, there may subsequently be setbacks i.e. allow for the possibility that some initiatives may fail; Make arms-length relationships available for U.S.based and/or local civil society organizations democracy and governance and other sectors when autonomy from the official U.S. agenda best serves long-term development; and Recognize that cooperative agreements may be best for the promotion of local ownership, legitimacy and flexibility in fragile and conflict environments.

Explicitly adopt a human security framework as the basis for the approach to fragile states Fragile and conflict affected states are often the focus of the U.S. and other donor governments strategic and security objectives because of their potential threat to regional and global stability. Implicit in this recommendation is the concern that militarization and politicization of aid based on narrow security interests reduces the effectiveness of aid to fragile states and undermines long-term human development efforts. The prioritization of politically-oriented stability operations as the organizing principle for aid programs can place security objectives in conflict with aid effectiveness principles. It can also damage and distort how aid is viewed in these contexts, something that is only mentioned in passing in the new USAID Policy on Countering Violent Extremism and Insurgency. When working to restore stability in a fragile or postconflict environment, the U.S. government and other actors should aim to enhance peoples security and make sure they have a say in how security and justice is provided to them. Strengthening of peoples trust in their own authorities can, in turn, help build sustainable and legitimate state institutions. Unfortunately U.S. and other donor government policies too often inadvertently undermine recovery and development processes and compromise the effectiveness of aidfunded local or international CSOs. This is especially true in countries marked by inconsistent or misaligned policies, for instance those that are the focus of counvii ter-insurgency or the Global War on Terror . Finally, there are other significant international drivers of fragility and conflict that fall under a human security

framework as well. While not comprehensive, these driver and steps the U.S. and other governments can take include: Review of arms sales and trade in legal and illegal goods to address war and conflict economies in their local, regional and international dimenviii sions ; Access to international markets to spur economic recovery; Transparency of internationally traded natural resources, land purchase, food and tax regimes, ix among others to address resource governance ; Adept and responsive diplomacy alongside longterm efforts to build local capacity and promote disaster risk reduction to address more effectively flare-ups due to conflict and political or natural shocks by involving local and relevant regional acx tors and institutions ; and Protection of human rights and fundamental freedoms, including protection of civil society activities and watchdog groups.
Throughout this paper, even when only the term fragile is used it should be understood that fragile and conflict-affected states is the intended meaning. ii Percentage referenced from A New Deal for International Engagement in Fragile States. An earlier reference is the Organization for Economic Co-operation and Development, which states in Ensuring Fragile States Are Not Left Behind. Summary Report March 2009 that in 2007 USD 37.2 billion of ODA went to fragile and conflict-affected states, i.e. 38.4% of total ODA. The Summary Report later notes that of that amount, half went to just five countries in 2007.
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Full Report Quadrennial Diplomacy and Development Review. Chapter 4, p. 122. iv New Deal refers to A New Deal for International Engagement in Fragile States, as put forward by the International Dialogue on Peacebuilding and Statebuilding. v This is the first cross-cutting issue highlighted in The Monrovia Roadmap: Final Draft (07/2011). vi The Dili Declaration states that one of the Challenges to Achieving Peacebuilding and Statebuilding Goals is, Insufficient attention to the protection of women and children from armed conflict and to the participation of women in peacebuilding and statebuilding. vii See for example Oxfam Americas Smart Development in Practice. Field Report from Afghanistan. March 2009. viii For example, the Global Partnerships Act of 2011 drafted by Representative Berman integrates aid, arms exports and human rights dimensions of assistance. ix The U.S. has shown good leadership on some of these points, including addressing the role of local and international private sector in hindering or helping to promote good resource governance. x While increasingly responsive and pro-active, U.S. diplomacy has also been late or inadequate over the past decade to the task of addressing some of the deadliest and enduring conflict situations (e.g. Democratic Republic of Congo and Somalia).
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