Are the g7+ and Donors Heading for a Clash?

g7+ donors foreign aidThe g7+ group of 18 fragile and conflict-affected states has joined together to share experiences and promote a new development framework in what are the most difficult of circumstances. Supported by the International Dialogue on Peacebuilding and Statebuilding, the group achieved a major breakthrough at the Busan High Level Forum on Aid Effectiveness in November 2011—an agreement on a New Deal for Engagement in Fragile States. A major part of this is a new orientation to the relationship with donors.

The New Deal priorities what fragile states themselves think are the most important issues to building peaceful and prosperous societies by identifying five Peacebuilding and Statebuilding Goals (PSGs):

  1. Legitimate politics – Foster inclusive political settlements and conflict resolution
  2. Security – Establish and strengthen people’s security
  3. Justice – Address injustices and increase people’s access to justice
  4. Economic foundations – Generate employment and improve livelihoods
  5. Revenues and services – Manage revenue and build capacity for accountable and fair service delivery

These are meant to frame a country-led, inclusive way of setting national goals and establishing a national development plan. This, in turn, is meant to increase country-donor harmonization and donor co-ordination.

More than 40 countries and institutions have endorsed the New Deal, committing themselves to investing the required resources and political capital in more equal partnerships that will be more heavily driven by local needs and processes.

The substance of what the g7+ is articulating is not necessarily new. After all, many of the same issues have come up before, such as in the World Bank’s 2011 World Development Report. It has long been recognized that fragile states have unique structural problems—caused by their sectarian divisions, weak governments, and histories of conflict—that require special attention. And at least since the Paris Declaration on Aid Effectiveness, donors have committed—at least in theory—to many of the changes that the g7+ is advocating. Almost every report on improving the effectiveness of foreign aid nowadays calls on donors to customize their approaches to local context.

What is new is that it is the recipient countries themselves who are arguing for these things. The g7+ is, in essence, asking for a much stronger role in ensuring that the goals that they think are important are prioritized in a way that meets their needs. This would be a dramatic break from how things are done now despite all the rhetoric concerning country ownership and so on.

Donor achievements in fragile states have been so modest because their approaches have not been sufficiently attuned to local needs. Not only do they prioritize the wrong things, but also they often implement programs in ways that do not provide a mechanism for local leaders to adapt projects to meet what are complex, difficult, and context specific problems. The g7+ is not going to be a panacea—the problems are structural in nature and not easy to solve whoever is driving the process—but by providing a stronger role for local problem solving it does offer a better roadmap going forward.

There are, however, three main risks with this whole endeavor:

1) Business will continue as usual, with resources still being allocated based on donor needs and not the priorities established by the g7+ countries. Donors are, for instance, likely to continue to prioritize security issues—which matter most to them—over everything else even though the g7+ clearly believes investments that energize local economies need to be given at least even billing (on the belief that it contributes to better security, etc.). They are also likely to emphasize bringing terrorists and international criminals to justice even when local leaders think reconciliation may matter more in some cases and expanding citizen access to justice is more essential.

2) Instead of focusing on improving processes—which is, in essence, what the g7+ principles call for and what the difficult and highly context specific problems that exist in fragile states require—donors will continue to emphasize outcomes primarily determined by themselves. This plays to the growing emphasis on results across the development field. But, history shows that locally driven political settlements and locally established institutional frameworks have a much better chance of success. Donor led efforts are, however, likely to bias political and institutional frameworks that they are comfortable with even if they do not meet local needs, as has happened in places such as Afghanistan, Somalia, the DRC, and so on. As Dominik Balthasar recently wrote in African Arguments, “the international community’s eagerness to maintain significant political leverage . . . reveals the complexities and caution around reducing foreign political influence.”

3) On the other hand, the g7+ countries may end up not delivering on their end of the bargain. Individual governments may not present a coherent plan for the future, may prefer to avoid setting benchmarks, or may not work hard enough on improving their own capacity to govern. They may continue as business as usual and lose the fragile trust on which a stronger partnership depends.

Fears over the last risk drive donor behavior. These are legitimate concerns. After all, donors cannot give the g7+ a blank check. Many of the countries involved have a less than stellar (to say the least) reputation regarding their governance. But unless adequate space is provided for local problem solving and institution building, fragile states will not solve their structural difficulties. That is why the whole g7+ initiative matters—the best hope for the least developed countries in the world is that they themselves find an appropriate path forward based on their better knowledge of local conditions and their ongoing need to work out their own political problems. The key is how to develop a framework that satisfies donor concerns regarding the use of their funds in a way that does not suffocate a legitimate locally driven political process.

Donors noticeably lack a framework for fixing fragile states. The OECD, for instance, shows little inclination in its policy papers to confront the society-society conflicts that is at the root of the fragile states conundrum. The World Bank does not understand what holds back businesses there and often provides data that offers a misleading reading of their problems. As such, they need to be extra sensitive that their own efforts do not undermine the New Deal in the countries that are prepared to deal with legitimate donor concerns about the use of aid money.

The international community should see itself as facilitators, conveners, technical advisers, and so on, but not as deciders of priorities and processes. They should be working on enhancing environments, capabilities, and resources available locally such that countries can work out their own solutions. The New Deal offers a path towards this goal, but it will only work if donors are sensitive enough and countries willing enough to each play their roles well. Otherwise, a clash between the two or a breakup is likely.

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Seth Kaplan

About Seth Kaplan

Seth Kaplan is a Professorial Lecturer in the Paul H. Nitze School of Advanced International Studies (SAIS) at Johns Hopkins University. He teaches, writes, and consults on issues related to fragile states, governance, and development. He is the author of Fixing Fragile States: A New Paradigm for Development (Praeger Security International, 2008) and Betrayed: Politics, Power, and Prosperity (Palgrave Macmillan, 2013). A Wharton MBA and Palmer scholar, Seth has worked for several large multinationals and founded four companies. He speaks fluent Mandarin Chinese and Japanese.