Shifts in development policy in fragile and conflict-affected settings

Over the last decade, development actors have scaled-up their engagement significantly, both financial and non-financial, in fragile and crisis-affected contexts. Building on commitments to improve aid effectiveness initiated in 2005 at the OECD DAC^[1] and those incorporating peacebuilding and state-building goals in development,^[2] the New Deal for Engagement in Fragile States in 2011^[3] was a milestone agreement between development partners, developing country governments and civil society on the principles and goals for effective development cooperation in fragile states.^[4] The New Deal endorses the central aid effectiveness principle of aligning development support with nationally owned and led development strategies, including a commitment to move towards ‘the use of country systems’ for delivery (i.e. budget support through public financial management systems), to invest in institutional capacity building, and to harmonise and reduce the fragmentation of aid through multiple channels.

In subsequent years, many development partners increased their spending commitments in fragile states^[5] and reviewed the implications of deeper engagement in fragile and conflict-affected contexts for their policies, programmes and operations. Nonetheless, the process to translate the New Deal’s high-level principles into practice has been slow, reflecting the disconnect with both political realities and the existing set-up of the aid architecture. Multiple reviews between 2015 and 2017 highlighted a lack of progress in increasing the volume of aid channelled through public institutions in fragile states and differing expectations between donors and recipient governments on the timeframe and process for this.^[6] In addition, reviews highlighted the challenges of adapting standard development finance instruments, operational models and risk management approaches to fragile contexts.^[7] Donors also invested in conflict, political economy and risk analysis capacity and tools;^[8] however, internalising context analysis and using it to develop responses that are genuinely tailored to the context has remained a challenge.^[9]

Alongside this, donor governments also made new commitments to improve the overall coherence of their political, security and development cooperation in fragile states. For example, the EU committed to ensure its development, peace and security objectives were mutually reinforcing and argued for a comprehensive approach to conflict that coherently uses various EU instruments in the Agenda for Change (2012) and the EU’s Comprehensive Approach to Conflicts and Crises (2013). Similarly, in 2015, the UK government published development and security strategies asserting the need for stronger cross-government coherence to address global security challenges and creating or expanding the focus of several cross-government funds to support its global security, crisis response and resilience objectives.^[10]

In recent years, the World Bank has also dramatically scaled up its engagement in fragile states. Its approach has evolved from an initial focus on post-conflict reconstruction to addressing ‘the full spectrum of fragility’, and in 2018 it allocated US$14 billion to fragile states, double its previous allocation.^[11] In 2020, the World Bank launched a strategy for fragility, conflict and violence, which commits to a greater focus on prevention and to remaining engaged during crises. Reflecting this commitment, it has set up allocation mechanisms tailored to addressing specific financing needs of countries facing acute risks of fragility, conflict and violence, creating a new envelope for this purpose in 2019. It has also established a crisis response window to assist poor countries to respond to natural disasters, public health crises and severe economic crises and a window that supports countries that host large refugee populations to support development that benefits both refugees and host communities. However, depending on the country, much of the financing is provided as loans rather than grants, representing an important shift in the types of financing now being supplied to fragile countries. Furthermore, challenges in absorption capacities for the types of financing being supplied have seen the World Bank experiencing problems in actually disbursing this financing proportionate to the increase.

Other MDBs have also evolved from a focus on post-conflict reconstruction to engaging across the full spectrum of fragility. With this, they have also strengthened approaches to assessing and engaging directly to address conflict and fragility and dramatically scaled-up contingent financing facilities to ensure they are able to disburse funds quickly in sudden crisis situations, such as AfDB’s Transition Support Facility.^[12]

There has also been growing international consensus on the need for sustainable solutions to forced displacement and refugee situations, as reflected in the Comprehensive Refugee Response Framework and the adoption of the Global Compact for Refugees in 2018.^[13] Key donors have further reinforced this with policy and funding commitments to prevent forced displacement from becoming protracted and to work in a coherent way to increase support for host countries/communities, promote the self-reliance of displaced people and address the root causes of displacement. For example, in 2016 the European Commission adopted the Lives in Dignity policy framework,^[14] which articulates a clear agenda for cooperation between political, development and humanitarian actors to address protracted displacement, including coordinated, predictable and flexible funding and stronger links at the programmatic level. In 2018, seven MDBs launched a platform to enhance their collaboration on economic migration and forced displacement.^[15]

Within the UN system, the UN Secretary-General António Guterres introduced a series of reforms aimed at strengthening coherence across the UN system to have a greater impact on the ground. These are implemented across three areas: 1) repositioning the UN Development System to deliver on Agenda 2030, 2) restructuring the peace and security pillar, and 3) shifting the management paradigm.^[16] To enhance the UN’s contribution to sustainable development, the reforms have sought to better coordinate action across the UN system at country, regional and global levels; to introduce UN systemwide instruments for measuring, monitoring and reporting on collective results; and to develop effective funding mechanisms to underpin these efforts. To increase the effectiveness and coherence of UN action under the peace and security pillar, measures taken have focused on building capacities to prevent conflict and sustain peace and aligning the peace and security pillar more closely with the UN’s development and human rights pillars.

At the country level, one of the most significant changes is to the resident coordinator system, ensuring that resident coordinators are empowered, independent and impartial. By delinking resident coordinators from UNDP administration and giving them a direct reporting line to the Secretary-General, resident coordinators are expected to play a stronger, more strategic coordination role across the HDP nexus. Members of the UN country team now have a reporting line to the resident coordinators, as well as their own agency hierarchy. The resident coordinator’s office has been given greater capacity and responsibility for coordinating country-level sustainable development cooperation frameworks. These changes are supported by the wider reforms to the management system, which include decentralising decision-making to bring it closer to the point of delivery.