Financing mechanisms are central to the operational efficacy of peace operations, yet current analysis of peacebuilding finance is atomistic, focusing on one domain, such as coordination or financing. To address the need for deeper understanding of how financing modalities affect peacebuilding outcomes, this paper identifies the trade-offs and opportunities of different financing schema across the lifespan of a peace operation. In order to parse the linkages between financing and outcomes, this paper examines: (1) control of donor funds within a transitional state; (2) budgeting for coordination and alignment; (3) promoting partnerships and participation through funding modalities; and (4) funding ‘quick impact’ projects to bridge the periods of immediate relief and long-term development. With reference to peacebuilding operations in Liberia after the 2003 Accra Comprehensive Peace Agreement, this analysis highlights numerous innovations and experiments in the financing of peace operations, examining the advantages and disadvantages inherent in different approaches.
* Lila Wade is a Foreign Service Officer. She holds a Masters Degree in Economic and Political Development from Columbia University. Lila has worked with UN-Habitat, UNICEF, the U.S. Department of State, and diverse NGOs in Myanmar, Peru, Tanzania, Mongolia, and the Dominican Republic. Her academic research has won accolades including the Leous Parry Award for Progressive Sustainability awarded by Columbia University for a paper on the politics and policy of land reform in Myanmar, as well as Departmental Honors from Lewis & Clark College for her thesis on the ratification of the Rome Treaty. Lila also contributed as a researcher to the book, Dark Logic: Transnational Criminal Tactics and Global Security (Stanford University Press: 2010). Professionally, Lila has received a Superior Honor award and a Meritorious Honor award from the U.S. Department of State, as well as being selected as a Thomas R. Pickering Graduate Foreign Affairs Fellow and inducted into the International Fellows Program at Columbia University. This article was written in a personal capacity, and the views expressed herein do not reflect those of the U.S. government or U.S. Department of State.
Peacebuilding finance receives scant attention1 aside from the constant refrain of budgetary shortfalls. These perpetual deficits underscore the need for greater operational efficiency. Beyond efficiency, financing is also integral to the efficacy of an operation. A well-conceived financing framework lays the groundwork for the success and sustainability of a UN mission by codifying accountability for outcomes, defining actors’ relationships, and enacting a system of incentives. A financial framework shapes actors’ decisions, making it central to the implementation of a range of best practices, including instilling national ownership, institution building, promoting participation, and linking relief to development.
With regard to peacebuilding’s track record, the need for improvement is evident. Data suggest that, on average, 50 percent of peace agreements relapse into conflict within five years of their conclusion.2 A lack of effective legitimacy,3 defined as success at upholding stated commitments to produce peace, is problematic in a system where donors demand results and governments rely on success stories to justify involvement in peace operations. This feedback effect between failure, waning legitimacy, and expanding resource gaps highlights the need to “identify and support structures that will tend to strengthen and solidify peace in order to avoid a relapse into conflict.”4 Reexamining financing frameworks is among the most effective way to reinvigorate peacekeeping operations, an argument this paper examines in greater detail.
II Defining Peacebuilding Amid Increasing Complexity
As this paper’s argument associates various operational modalities with successful peacebuilding, it is useful to establish what constitutes peacebuilding as well as defines it as ‘successful.’ These matters are by no means free of controversy. un officials, academics, and policy-makers debate operational requirements and definitions of success amid changing political circumstances. “UN peacekeeping is at a crossroads,” according to A New Partnership Agenda: Charting a New Horizon for UN Peacekeeping.5 “The scale and complexity of peacekeeping today are straining its personnel, administrative and support machinery. New political, military and financial challenges threaten to erode the unity of vision and purposes of the global peacekeeping partnership.”6 The unprecedented organizational complexity7 of peace operations calls for a focus on achieving self-sustaining results.
Recognition of the need to ‘build’ a sustainable peace is moored to international actors’ increasing “concern with the extent to which [results] can be maintained by national actors [rather than ensuring] a formal transitional period is concluded.”8 To address this concern, the focus of peace operations has shifted to the “establishment of effective public administrative bodies and practices and the training of local individuals [such that they are] capable of sustaining [reforms].”9 In other words, policymakers have reached a consensus that peacebuilding, not peacekeeping, should be the focus of UN missions. In addition to emphasizing capacity building, this shifting discourse has highlighted the importance of examining relationships between the international community, the domestic government, civil society, and local citizens in post-conflict reconstruction. Relatedly, practitioners are also reexamining donor coordination, participatory methods, and strategic partnerships as key elements of a successful peace operation.
To analyze these various approaches to peace operations, this paper proceeds by dissecting the relationship between funding modalities and peacebuilding outcomes, referencing the 2003 Accra Comprehensive Peace Agreement in Liberia. First, this paper describes Liberia’s accountability-ownership trade-off to illustrate how the transfer of authority impacts options for creating an effective financing mechanism. Second, it discusses how budgeting affects alignment of development strategies and donor harmonization, dissecting ‘on’ versus ‘off’ budget allocation. It also examines how various donor funds can be used as allocative tools to achieve desired results. Third, partnerships and participatory-methods are surveyed to highlight their contribution to a successful peace operation. The fourth and final section discusses the importance of linking relief, reconstruction, and development.
III Managing Donor Funds: Liberia’s Accountability-Ownership Trade-Off
Deciding who has prerogative to manage donor funds is pivotal as this decision shapes the balance-of-power between domestic and international actors. By influencing this dynamic, a financing framework shapes incentives for coordination and alignment of funds with national development priorities. It also drives prioritization of objectives, as well as affects how politics shape peacebuilding outcomes. To the extent that it institutionalizes fiscal responsibility, a financing framework has direct bearing on accountability and national ownership during the transitional phase. Liberia’s experience under the Accra Peace Accord illustrates the trade-off between national ownership and mechanisms of accountability.
At the outset of Liberia’s peace process, the 2003 Comprehensive Peace Accord established a framework for rebuilding the Liberian state that vested executive authority in an interim government. The tenure of the interim government was finite, which incentivized rent seeking. Installing a government that was ineligible for reelection further eliminated mechanisms for electoral accountability within the context of weak institutions. Unsurprisingly, government officials became besotted with enriching themselves.10 This example of institutionalizing perverse incentives illustrates the potential pitfalls of a poor structural design for managing finances in a post-conflict setting.
The international community’s response highlights the need for balance in addressing the accountability deficit. While addressing rampant corruption is important, sanctioning the domestic government too strongly can also undermine the operation’s efficacy. For example, in response to corruption, the international community imposed the Governance and Economic Management Assistance Program (GEMAP), an anti-corruption initiative. This program deployed international controllers to core state institutions such as the Central Bank, the Ministry of Finance, major revenue-gathering agencies, and state-owned enterprises, granting them authoritative oversight over Liberian affairs. Proponents of accountability measures cited the need to rein in corruption and lauded the GEMAP’s success in that regard. Detractors underscored its invasiveness, arguing that, irrespective of its effectiveness at curbing corruption, the international community’s incursion on Liberian sovereignty undermined nascent liberal norms by making “good governance and anti-corruption … a foreign responsibility and not a Liberian concern.”11
The Liberian experience highlights the tension between the need to “establish effective interim control over key sectors of the local economy” while ensuring national ownership and promoting civic participation in government.12 This agenda is extremely difficult to achieve against the backdrop of feeble governments, rampant corruption, and high levels of social fragmentation.13 Working in this context creates unique challenges for reformers keen on incorporating domestic actors but unsure about the ability or willingness of recipient countries to sustain improvements.14 The result is tension between the dual imperatives of granting inclusion to promote state-building and sheltering reforms from corrupt leaders or spoilers. There are, however, a number of approaches to address this tension.
The first strategy is simply to not grant fiscal authority without adequate institutional or political preparedness. However, without some form of host country involvement, institutions will likely remain weak. For example, GEMAP set a timeline of 3 years, and it also tied the program’s termination to the completion point under the World Bank’s Enhanced Highly Indebted Countries Initiative.15 This stipulation meant that, even after a democratically elected president took office, Monrovia had no opportunity to review this mechanism that was widely viewed as “turn[ing] Liberia into a quasi-trust territory with expatriate management.”16 The immediate result was continuation of a system in which institutions typically remain weak, as there are no incentives for accountability.
To address the need for accountability as well as the challenge of corruption, a joint-accountability program is ideal. It should include a results-based periodic review of a country’s readiness to regain sovereign control of its finances. This mechanism would lessen invasiveness while also conforming with indicator two of the Paris Declaration on Aid Effectiveness (from hereon the Paris Declaration), which requires that donors utilize a country’s Public Financial Management (PFM) and procurement systems if they are reliable. The Paris Declaration also provides objective third-party standards for assessing readiness for self-management. Instituting a periodic review alongside incorporating a greater degree of capacity building and institutional development aid would make a joint-accountability approach much more palatable and effective.
A second option to avoid turning a country into a de facto trusteeship is a multi-donor trust fund. A multi-donor trust fund allows donors to “navigate the pitfalls associated with other forms of assistance by creating a modality which could centralize planning, coordination, and oversight, while also matching the need for financial accountability and a desire to engage state institutions in a more comprehensive manner.”17 In Liberia, this approach would have meant placing donors in control of funding, while including the government in the planning or oversight functions until Liberian PFM mechanisms were deemed adequate.
IV Budgeting for Coordination and Alignment
Deciding which actors have prerogative for managing donor funds and budgeting is not simply a matter of resolving the accountability-ownership tradeoff. Enabling coordination and aligning outcomes with domestic priorities is also critical. Coordination and alignment, particularly in the realm of finance, have become near dogma in the development realm.18 Donor harmonization promotes efficiency19 by reducing project redundancies and enabling synergies in program planning and implementation. It also helps to ensure international actors’ peacebuilding strategies align20 with national strategies and priorities, a synergy absent in many aid-dependent conflict-affected countries. To illustrate, according to the Utstein study’s review of several hundred peacebuilding projects, approximately 55% were not linked to any larger country strategy.21 Disconnect between international and national objectives impairs effectiveness, reduces complementarity, and increases transaction costs, according the Paris Declaration.22 Beyond the potential gains to efficiency, alignment and donor coordination take on paramount importance in post-conflict countries given their impact on state-building—as demonstrated in Liberia.
Alignment with National Priorities
According to the Paris Declaration survey conducted in 2008, even years after the enactment of the peace agreement, Liberia lagged behind in alignment of donor funds and had only partially achieved harmonization.23 In ownership, producing results, and managing accountability, Liberia also scored poorly. The review outlined ‘priority action items,’ including the implementation of an integrated financial management system and aid tracking system as well as greater coordination of donor missions. These recommendations address the bifurcation of Liberia’s national revenues and receipt of aid, the ‘off’ budget system for administering aid, as well as weak integration of the budget process and national development strategies. These failings pose significant problems for Liberia’s ongoing state building and development and call for reform to promote ‘whole-of-government’ budgeting.
A collaborative process for budgeting or “whole-of-government coherence”24 helps to create national ownership by involving domestic actors. Through inclusion and direct responsibility for administering aid funds, alignment promotes ownership over the development process. Referencing the Organization for Economic Co-operation and Development (OECD), “ownership specifically concerns a country’s ability to carry out two, interlinked activities: exercise effective leadership over its development policies and strategies; and coordinate the efforts of various development actors working in the country.”25 Accordingly, allocation of donor funds should ensure that the international community’s objectives do not supersede those of the national government and promote inclusion of domestic actors in the planning and implementing phases when possible. Aligning priorities also minimizes duplicative projects. Further, when donors backstop domestic priorities instead of imposing their own, it facilitates transition from UN-led to country-led budgeting, service-delivery, and project implementation.
Programmatic changes to improve collaboration and alignment could be informal—increasing consultation or information sharing—or institutionalized through mechanisms for joint planning and budgeting. Both approaches reduce the likelihood of duplicating projects or contravening national objectives. But, strategies that aren’t institutionalized can be problematic if a change in leadership affects commitment. As a result, the international community has moved towards formalizing coordination in post-conflict and disaster management. The UN and international bodies have pursued a number of different methods for promoting alignment. Specific examples include the 1998 Strategic Framework process in Afghanistan, the 2005 Results Focused Transitional Framework in Liberia, the 2007 Strategic Framework for Peacebuilding in Burundi, and the 2007 Sierra Leone Peacebuilding Cooperation Framework. More broadly, approaches such as Common Country Assessments, Common Humanitarian Action Plans, the Consolidated Appeal Process, the United Nations Development Assistance Framework, and the Poverty Reduction Strategy (PRS) approach are all aimed at coordination to align the overall development strategy of the external actors and the host government.26 However, while these mechanisms set priorities and operationalize program strategies, they do not necessarily outline a framework for budgeting. Donors and the domestic actors must still make strategic decisions regarding ‘on’ or ‘off’ budget allocation or a hybrid of the two approaches.
‘On’ vs. ‘Off’ Budgeting
Alignment can be achieved through either ‘on’ or ‘off’ budget allocation, depending on if funds are channeled directly through the national budget versus through an external allocation mechanism. ‘Off’ budget allocation has the advantage of granting more flexibility and control to donors to respond to ground realities, manage corruption, and compensate for under-capacitated government ministries. Despite the potential drawbacks, to the extent that ‘on’ budget coordination can be achieved, it has the most potential to create ownership, align priorities, and build domestic capacity. In recognition of these benefits, there is a growing consensus that, where possible, ‘on’ budget allocation is a best practice. In general, ‘on’ budget allocation requires that the international community states multi-year commitments upfront, “[r]elies to the maximum extent possible on transparent partner government budget and accounting mechanisms,”27 and generally works “towards building institutions and establishing governance structures that deliver effective governance.”28 Striving to transfer responsibility to the domestic government enables the partner country to publish timely and reliable budgets and grow its capacity to manage resources.
Credible budgeting and service-delivery feeds into the government’s legitimacy, which is integral to post-conflict recovery. By instilling responsibility for these tasks in the new state, ‘on’ budget allocation creates opportunity for accountability mechanisms to develop within a semi-managed environment. While international officials retain some leverage over allocation and management—to prevent egregious corruption—civil society and citizens must take a role in holding their government accountable for using revenue to deliver results. This relationship is a touchstone of robust state-society relations; seeking to deepen the state-society nexus through ‘on’ budget allocation is crucial for effective state-building. Capacity building is another positive outcome deriving from a well-managed transition as ‘on’ budget allocation creates a window in which domestic civil servants can work under the tutelage of international technical advisers.29
While the benefits of this approach are substantive, the climate of post-conflict states is not always favorable for ‘on’ budget allocation given that “the application of sound fiduciary principles is very challenging in post-disaster situations, because the need for speed often overrides more conventional mechanisms for planning and implementation of budgets.”30 Thus, to manage fiduciary risk and allow for the strengthening of institutions, donors often initially opt for an ‘off’ budget modality, such as a trust fund or a hybrid approach, until the state apparatus is more fully developed.31 Although bypassing domestic budget and accounting mechanisms contravenes established best practices, in cases where ‘on’ budgeting is either not possible or preferable, attention to other aspects of financing can improve the efficacy of a peace operation, such as pursuing coordination of funding, promoting partnerships, and encouraging participation in the budgeting process.32
Coordinating Funds for Maximum Result—Harmonization in the Liberian Context
In Liberia, donors have pursued harmonization, also referred to as coordination, at both the national and sectoral levels. The keynote initiative is the multi-donor trust fund, established by the World Bank. Also, at the countrywide level, the United Nations system was fully aligned with the PRS process through the United Nations Development Assistance Framework (UDAF). Several other donor co-ordination mechanisms (such as Liberia Reconstruction and Development Committee, GEMAP and the UN Country Team) aimed to avoid duplication of efforts and promote coordinated responses among donors. At a sectoral level, other similar efforts include the Liberia Health Sector Pool Fund funded by the Department for International Development (DFID), Irish Aid, the United Nations Children’s Fund (UNICEF), and the United Nations High Commissioner for Refugees (UNHCR), as well as an education fund spearheaded by UNICEF. To finance the rehabilitation of infrastructure, particularly roads and waste management, the World Bank initiated formation of the Liberia Reconstruction Trust Fund.
These initiatives have not been perfectly implemented nor have they yielded incontrovertibly positive results. However, their successes in certain regards—namely promoting inclusion of stakeholders,33 financial effectiveness, flexibility, creating opportunities for capacity building, and use of domestic institutions—recommend the trust fund approach for future peacebuilding scenarios. Donor coordination, or harmonization, has the benefit of streamlining management of multiple donors’ financing schema.34 By reducing the administrative burden on the state, harmonization is considered, ipso facto, best practice. This consensus is reflected in the Paris Declaration, which calls on donors to “implement, where feasible, common arrangements at country level for planning, funding (e.g. joint financial arrangements), disbursement, monitoring, evaluating and reporting to government on donor activities and aid flows.”35
Harmonization addresses problems of fragmentary information and redundant budgeting and creates a structural imperative for information sharing and collaborative planning. This approach, however, only addresses the potential for collaboration. Promoting alignment of priorities and other desired outcomes requires decision-making beyond aggregating funds. When implementing a coordinated funding modality, the international community may opt for a country-level fund, which aggregates all incoming funds; a multi-donor trust fund, which targets a sector-specific objective; a social development fund, which devolves allocation decisions to communities; or a combination thereof. The different possibilities provide an array of comparative advantages and disadvantages.
Multi-Donor Trust Funds
Multi-donor trust funds, like a national fund, centralize funding for the implementation of large-scale programs. However, multi-donor trust funds do so on a sector-specific basis.36 The benefit of sector-based approaches is allowing actors with a degree of specialization to oversee an area of aid administration. This allocation of responsibility creates the possibility for economies of scale and/or synergistic project implementation in support of an overarching aim.37 Multi-donor trust funds also—at least theoretically—alleviate some of the short-termism that characterizes donor-driven planning in post-conflict settings.38 They do so by holding funds in perpetuity until the host government decides how to allocate the trust funds and has the capacity to do so. A caveat to this argument is that this holding period, in practice, often collapses under political pressure to spend the money quickly. This drawback could be managed by suspending donors’ policy of imposing timeframes for spending.
Within Liberia, sector specific funds, especially the HSPF, produced notable results by efficiently allocating resources, targeting capacity building and institutional strengthening, as well as partnering with NGOs to improve service delivery.39 Showcasing the potential of multi-donor trust funds, the HSPF relied on domestic auditors, used national procurement procedures, and disbursed funds directly into the Liberian Ministry of Health and Social Welfare (MOHSW) account. It also had a project management unit embedded in the MOHSW and used government monitoring systems to promote capacity building and institutional strengthening.40 While there is room for improvement, such as channeling the funds through the Ministry of Finance to increase accountability and alignment, the success of the fund is measurable: “the pooled fund contributed to the expansion of the network of public facilities by 24% and to increasing the percentage of facilities providing the MOHSW’s Basic Package of Health Services from 36% in 2008 to 82% by the end of 2010. Four years after implementation, over one-third of public health facilities in Liberia were financed through a multi-donor trust fund and contracted to local government and NGOs.”41
Social funds approach ownership through a participatory lens. Initiated in the 1980s,42 they “represent the first breakaway from donor-driven projects and single-sector programmes,” as they provide grant financing “for small-scale public investments identified and proposed by lower level stakeholders, generally civil society organizations or municipal authorities.”43 These approaches are effective in facilitating beneficiary participation and ownership over the projects44 as well as creating short-term employment.45 The small-scale application of this financing tool is both an advantage and drawback. Its responsiveness to local input makes it flexible as well as comparatively good at encouraging participation and fostering community inclusion in the reconstruction process. However, the lack of centralization can impede its broad functionality, especially in areas requiring scale, such as service delivery.46 These drawbacks and advantages of designing programs at various levels of governance highlight the necessity of designing intervention strategies, which promote partnerships at the international, national, and local level. Through robust strategic partnerships, an intervention benefits from each actor’s comparative advantage.
V Promoting Partnerships and Participation through Funding Modalities
At times the international community can seem like a discordant mélange of actors. The UN Secretary-General’s Note of Guidance on Integrated Missions notes that achieving efficiency in peace operations requires “a comprehensive operational approach, among the political, security, development, human rights, and, where appropriate humanitarian UN actors at country level.”47 This laundry list of actors highlights the complexity of coordination. This complexity is only heightened by the absence of effective decision-making mechanisms to achieve consensus about priorities or operational strategies. Budgeting, in light of these challenges, cannot be considered primarily a technical matter so much as a political one. As such, partnership and participatory approaches are especially important to ensure all stakeholders have a seat at the table. Both partnership and participatory modalities promote budgeting based on shared priorities and operationalize these aims through collaborative projects that play off each actor’s strengths. The modalities differ insofar as a partnership approach focuses on strategic alliances, whereas participatory approaches, building on the partnership framework, extend the processes of consultation and collaboration to the community and individual level.
The movement for partnerships in post-conflict peacebuilding has gained traction, with support coming from a wide range of camps. In the Agenda for Peace, Secretary-General Boutrous Boutrous-Ghali asserts, “non-governmental organizations, academic institutions, parliamentarians, business and professional communities, the media and the public at large must all be involved [in peace-making].” Andrew Nastsios, former administrator of USAID, expressed his similar conviction that “absent complete reorganization of the relief response structure, which is politically and administratively unfeasible, incremental reform through greater [reliance on] NGOs provides the best answer.”48 These views have been implemented widely through programmatic restructuring.49 For example, among UN agencies, the Department of Peacekeeping Operations and the Department of Field Support have called for the reinforcement and broadening of internal and external partnerships. Emily Paddon argues that this initiative is a response to the growing demands placed on peacekeeping forces and that failure to meet these emerging challenges will only enlarge the UN’s legitimacy gap.50 She frames internal and external partnerships as a way to shore up UN capacity and enhance the organization’s legitimacy.
Expanding internal partnerships by involving diverse actors bolsters the UN’s legitimacy in multiple senses. Inclusion increases the organization’s procedural legitimacy by creating opportunities for stakeholders to define the UN’s mission goals and operational protocols.51 To promote internal partnership, the New Horizon Agenda calls for dialogue through a consultative process, which triangulates the Security Council, the Secretariat, and countries contributing peacekeepers. This exchange is envisioned as a way to foster consensus, a more realistic appraisal of the mission, and clearer mandates. Additionally, the New Horizon Agenda calls for creation of mission-specific coalitions of ‘stakeholders,’ such as informal ‘friends groups’ to support the roll-out strategy and assist the Secretary-General in “securing and sustaining the necessary political and operational support.”52 This procedural legitimacy, which facilitates buy-in from key actors, is needed to maintain adequate financial and human resource contributions in “an overburdened and increasingly politically fragmented institution.”53
A similar logic applies to maintenance of external partnerships, which also expand the range and depth of UN capabilities. By creating a pool of human and physical resources, partnership with external actors can help multiply the impact of peacebuilding with minimal financial commitment. This approach further promotes efficiency by vesting responsibility for tasks in the actor or agency with the most specialization or regional experience, increasing the likelihood of success. The New Horizon Agenda promotes these external partnerships on the basis that it is not the number of “boots on the ground,” but rather the “skills, capacity, and willingness of personnel, as well as materiel, to deliver required results” that matters.54 The one limitation of the New Horizon Agenda is its bounded vision for external partnerships, which it confines to regional organizations, security alliances, and ‘ad hoc’ member-state coalitions. In an environment of political and economic constraints, looking towards civil society is also highly advisable.
External Partnerships & NGOS – The Role of Civil Society in Peacebuilding
Partnering with NGOs or other civil society groups has both operational and strategic benefits. ngos are most likely to have a nimble and accurate understanding of contextual country-specific factors when conflict or a crisis begins. Also, they are better suited towards specialization and serve as reservoir of knowledge and technical expertise upon which the UN can draw. Local partnerships also have the potential to create more robust linkages with the country’s citizens. Through their proximity to and credibility with civil society and citizens, NGOs can act as a transmission device for civil society to participate in the international system:55 “On a day-to-day basis it is the non-governmental organizations, through their emphasis on popular participation and inclusiveness, that best link democracy to peace.”56
As the rhetoric and practice behind incorporating NGOs into reconstruction has aligned, organizations have operationalized the partnership norm in a variety of ways. The World Bank, for example, has found that creating a clear legal and regulatory framework for NGO operations, serving as an interlocutor between the domestic governments and NGOs, and providing funding to NGOs are integral to expanding partnerships.57 The World Bank’s initiatives showcase how partnerships can significantly expand provision of services58 in conflict-affected countries, while reducing duplication of resources.59 Beyond these service-oriented improvements, pursuing development through NGOs provides a venue through which citizens and civil society can participate in budgetary and other policy decisions through community-based approaches.
Participation and Community-Driven Reconstruction
The inclusion of civil society builds democratic institutions from the ground up by strengthening social capital and re-forging the state-society relationship, which underpins robust democracy. These processes are key to rebuilding a state in which social capital is eroded, institutions of participation are enervated, and norms accountability and trust have dissipated. The revitalization of social capital and civic norms, as well as the reconstruction of participatory institutions, matters in two respects. The first reason is normative: citizen involvement is the basis for democracy. The second reason is functional, as participation underpins institutions of accountability, especially in environments with a corrupt, unaccountable state.
As discussed prior, in post-conflict settings, “[s]pending … significant financial resources well has been a key concern” given levels of corruption and weak institutions of accountability.60 While appropriate arrangements for Public Financial Management and Accountability (PFMA) are crucial to ensuring the integrity of reconstruction,61 the process for establishing and strengthening PFMA procedures can be protracted. Thus, in conflict-affected states, developing systems of accountability, specifically non-governmental mechanisms, is crucial to providing a check to the state’s exercise of authority. Explicit efforts must be taken to nurture citizen-driven accountability networks given that, at the beginning of the reconstruction process, “to the extent that accountability mechanisms are in place, they tend to be directed upwards and outwards to the institutions that are mandating or financing the intervention, not downwards and inwards to the people living in the target territory.”62 Thus, building institutions of downward accountability requires the purposeful involvement of civil society and citizens in the planning and budgeting processes through participatory methods.
Cultivating civic participation and community-driven mechanisms of accountability is best done through partnerships with organizations that operate within communities, have a longstanding credibility with the population, and understand the local context. Working with local NGOs and civil society groups or organizations using participatory modes of project management is referred to as community-driven reconstruction. Broadly speaking, participatory approaches focus on identifying community needs and articulating them to the local and national government. Through this process, the goal of participatory budgeting is to “expand accountability at the local level” by devolving and broadening decision-making prerogatives to act as a check against government authorities’ often sweeping power.63 Participatory approaches rest on “foster[ing] public learning and an active citizenry by engaging communities directly in governance processes.”64 A second advantage is providing “an outlet for tensions that emerge around the ‘winner-take-all’ politics of the national level”65 by fostering state-society dialogue and engagement between different political parties on functional matters. This process of ongoing engagement is healthy in a post-conflict setting, as it helps to reinvigorate democratic norms of political engagement and consensus building.
Creating a ‘Peace Dividend’ while Nurturing Development
Recognizing which factors drive conflict and sustain peace helps to ensure that post-conflict investments yield tangible and sustained impacts. Sustainable peace is inseparable from “promoting good governance, economic growth, and even changing the political culture of a country,” writes Jean Daudelin.66 As a result, there is a need to “bridge the gap between relief and reconstruction”67 in order to avert a return to violence and/or prolonged poverty. However, that is not to say that integrating humanitarian, peacekeeping, peacebuilding, and development agendas is a simple task. The aim of consolidating peace through development is both conceptually puzzling and logistically challenging.68
Conceptually, it is difficult to disentangle the “inseparable link between peace and development.”69 This interrelationship epitomizes the unique challenge of a post-conflict environment: how to initiate a virtuous cycle of stability, investment, and prosperity in a situation fraught by violence, deficient in infrastructure, and weakened by low social and human capital. Moreover, economic development is more than a piece in the development puzzle; it is a time-bounded imperative in a post-conflict state. This is the case for two reasons. First, the scarcity of resources within a volatile political context can inflame violence. Second, expectations of recovery and jobs or a ‘peace dividend’—if not met in a timely fashion—can contribute to the deterioration of peace. As a result, officials have become increasingly aware of the need to balance long-term development with service delivery and job creation in the short-term.
In Foreign Affairs, Boutros Boutros Ghali writes, “Political stability is not an end in itself; it is a condition of durable economic and social development and the fulfillment of the human potential. At the same time inseparable links between peace and development need to be acknowledged and understood.”70 The international community has attempted to fill this gap, albeit slowly, with different funding innovations to promote linkage between relief and development, such as funding for quick impact projects (QIPs), specialized reconstruction funds, community-development financing, and peacebuilding funds to channel and coordinate reconstruction resources to meet these challenges.
The World Bank, for one, has acted on “the need to balance short, high impact projects that consolidate peace with longer term projects that lay the foundation for growth and development.”71 The World Bank has done so by implementing a Post-conflict Fund, which supports planning, piloting and analysis of reconstruction activities with an emphasis on “speed and flexibility without sacrificing quality.”72 The Post Conflict Fund aims to improve the lives and livelihoods of war-affected populations73 by providing funding for development projects on a much smaller scale than traditional World Bank funding for infrastructure investment and debt relief.74 The World Bank’s other innovative financing schemes, a Community Development Fund and Transitional Support Strategies, likewise promote planning and development through small-scale pilot activities. These various initiatives reflect the World Bank’s growing awareness that ameliorating the effects of conflict through quick impactful projects is critical for economic development.
un peace operations have likewise shifted towards tailored financing schemes, reflecting recognition that the timing and targeting of funding is integral to a self-sustaining transition. This shift also reflects peacebuilding’s emphasis on managing change75 and its integrated mission approach. To operationalize this focus, the UN has been testing innovative financing mechanisms, such as QIPs and peacebuilding funds. These financing tools aim to initiate and sustain country-led momentum for institutional change across the relief-to-development continuum. A few examples of these mechanisms include QIPs implemented by United Nations High Committee for Refugees and a peacebuilding fund managed by the United Nation’s Development Programme (UNDP).
qips and the UNDP’s peacebuilding funds have similar purposes, to “address immediate needs in countries emerging from conflict at a time when sufficient resources are not available through other funding mechanisms.” They target any activity “of direct and immediate relevance to the peacebuilding process [to address] critical gaps.”76 Although different in their implementation, both initiatives specifically target projects that are “quick, focused and relatively simple to implement” with the goal of “producing rapid results and supporting area/community development.”77 This vision for providing funding incorporates many of the desirable features of a financing framework, including anchoring the development process in local communities through the ‘Development through Local Integration’ approach, as well as promoting partnership78 and coordination by bringing together humanitarian and development actors and funds.79
Explicitly acknowledging the need for continuity between short-term relief and long-term development results, the peacebuilding fund also finances ongoing development projects. This funding source especially targets countries that do not have multi-donor trust funds to finance the consolidation of peace. A relief-to-development approach, by ensuring that aid continues to flow after the flashpoint of the crisis, follows the premise that the absorptive capacity of conflict-affected countries is initially low and then grows.80 This finding belies the donors’ typical strategy of delivering a high volume of resources at the outset of the recovery process—exactly the point in which the capacity deficit is most severe—with interest waning over the course of the recovery period when funds are most needed.81 To address this timing issue, a variety of ventures are needed, such as a combination of community-development funds nestled in a larger PRS and multi-donor trust fund and/or the expansion of the peacebuilding fund to other countries. A range of financial approaches ensures that both the initial injection of aid, as well as ongoing support for developmental initiatives are consistently disbursed and targeted towards local communities.
Partnership, Participation and Community-Driven Reconstruction in Liberia
Liberia’s approach to disarmament, demobilization, rehabilitation, and reintegration (DDRR) showcases the potential for integrating the various recommendations advanced in this paper, especially with respect to coordination, partnerships, and programming for relief-to-development transitions. At the national level, Liberia developed the common Programme Strategic and Implementation Framework (PSIF) in October 2006, which was the UN’s first integrated DDDR framework.82 Under the framework, the UN including UNDP, UNMIL, and other agencies worked alongside the government to implement DDRR. This partnership took shape around the Joint Implementation Unit, comprised of the UNDP, the National Commission for DDRR (NCDDRR), UNMIL, the Ministry of Planning, other UN agencies (i.e. unicef and the ILO), and key donors including the EU commission and other European countries.83 Accordingly, this partnership approach illustrates a positive example of coordination to harmonize efforts and funds towards a common goal.
This coordination positively affected the operational level of implementation through UNMIL’s information collection initiative, the Hotspots Assessment and Action Plan. unmil shared information on potential problem areas for DDRR with partnering agencies, which they used to formulate a comprehensive plan. This plan, encompassing the conception, design, fundraising, and implementation of livelihood projects outlined how various actors would contribute to advance the goal of DDRR. Notably, the plan included NGOs, civil society groups, and civil institutions, such as the YMCA under Liberia’s Ministry of Transport, as implementing agencies. Building off the partnership approach, the action plan supported the training of motorcycle taxi drivers by the Liberian National Police and the Ministry of Transport. In addition to building capacity of both citizens and the Liberian civil service, this program promoted community relationship-building. It did so by promoting dialogue between the government, beneficiaries, and community members.84 Initial funding was provided through the Liberian Peacebuilding Fund.
This program highlights many of the recommendations advanced in the proceeding sections. First, the national-level joint planning and implementation mechanism through the PSIF shows the importance of coordination to harness the support and resources of multiple actors. Second, the Hotspots Assessment is an example of the usefulness of operationalizing coordination on multiple levels, including on a project or program basis. Further, this case study highlights the importance of including local governmental and non-governmental actors in the partnership equation, as—in this program—these actors were critical to ensuring both the substantive and operational integrity of the program design.
Using community-based livelihood projects and encouraging dialogue between the government, beneficiaries, and communities illustrates how national programs can be implemented in a way that reinvigorate local communities, encourage civic participation, and repair institutions and state-society relations. Operationally, reliance on NGOs, civil society, and local governmental actors is an example of how partnerships can create a strategic advantage. As Andrea Tamagnini and Teresa Krafft note, “[p]eacekeeping missions can provide the necessary infrastructure and outreach in remote areas while UN agencies have the advantage of already being present in the country.”85 This comparative advantage was manifest in the planning and implementation of this DDRR program. While the national-level strategic coalition was very effective at “marshal[ling] Liberia’s partners and donor institutions to mobilize additional resources” needed to carry out the project, at the ground-level local actors and NGOs were operationally crucial for providing access, capacity, and contextually-relevant knowledge. It was only through their contribution that the UN was able to scale up considerably when demand for the DDRR program considerably exceeded expectations.86
On the whole, this project was relatively successful. It was a success both in terms of producing results, as well as validating the potential for integrating various financing, planning, and budgeting modalities to enhance impact. In particular, the project’s implementation captures how specific funding mechanisms—in this case the UNDP’s Peacebuilding Fund—can be instrumental in ensuring needed projects get off the ground in a timely manner. However, this case is also useful at highlighting how the prima facie aspects of financing are only part of the picture. Ongoing institutional support also matters. For example, in the case of Liberia’s DDRR program, facing unexpectedly high demand, the project might have folded absent coordination to raise adequate funding. Instead, the consortium of actors, which had institutionalized collaborative procedures for project planning and oversight procedures, were able to act efficiently and quickly to address the funding gap. Furthermore, the project’s organization along the partnership model meant that the capacity to scale up was already in place. While difficult to establish absent a counterfactual, it seems clear that if the UN had been the sole implementing agency for the DDRR program, the transaction costs and barriers to responding to changing dynamics in the field would have likely have overwhelmed the institution’s capacity. Instead, the UN peacebuilding officials were able to harness support by relying on its network of partners to ensure continuity of operations.
These lessons learned are geared towards the financial side of conceptualizing and executing a peace operation. The rationale for this focus is the importance of funding in driving outcomes and, indeed, its centrality in any endeavor. As Robert A. Heinlein quipped, “If the question begins ‘Why don’t they …?’ the answer is money.” This paper, while accepting the decisive role that finances play in enabling and supporting an operation, attempts to go beyond a mere discussion of resource levels to probe the more fundamental, process-oriented ways in which financing, budgeting, and vesting fiscal authority can shape peace operations. Given the broad relevance of finance in shaping the prospects for a successful peace operation, the take-away from this paper, in addition to its substantive recommendations, should be the simple message that the specification of financing frameworks should be given close scrutiny in the peacebuilding process.
- 1. At the Outset of a Peace Operation, Design the Transition of Power so as to Optimally Balance Accountability and National Ownership.
This endeavor requires weighing the institutional capacity of the state and assessing how much donor control is necessary to ensure accountability for management of funds. In instances where corruption is a significant issue, capacity building to strengthen PFM alongside mechanisms for review of the joint-accountability mechanisms can minimize the incursion on a state’s sovereignty and increase the sense of national ownership.
- 2. Channel Funds Through the National Budget When Appropriate and Seek Coordination Through Joint Planning and Implementing Strategies When ‘on Budget’ Allocation is not Advisable.
This recommendation requires an assessment of institutional capacity with respect to how budgets will be resolved. In instances where there is sufficient national capacity and commitment, ‘on’ budget allocation promotes alignment and ownership. In cases where it is not desirable, multi-donor funds, country-level funds, and social development funds combined with joint planning and implementation strategies can optimize alignment, coordination, and inclusion in the budgeting process.
- 3. Prioritize Both Internal and External Partnerships in Financial Planning, Budgeting, and Project Implementation Processes.
This recommendation rests on coordinated planning and implementing frameworks, such as PRS, but further specifies that these initiatives should actively seek the participation of all stakeholders. This participation should include national and international actors, as well as local government and non-governmental players in order to strengthen state-society linkages, utilize actors’ respective comparative advantages, and ensure citizens have a voice in the reconstruction process.
- 4. Design Programs to Bridge Relief and Development at Both a Countrywide and Project-level.
This final point conveys the importance of timing in post-crisis response by highlighting the need to deliver quick tangible results alongside fostering long-term development. Ideally, projects should contribute to both aims, which is most likely if the program is conceptualized at the national-level with support from key actors, but implemented through community-based mechanisms. This dualistic approach is best suited for ensuring national support, equitable distribution of the benefits, as well as civic participation in the reconstruction process.
Jean Daudelin and Lee J.M. Seymour, ‘Peace Operations Finance and the Political Economy of a Way Out: Living Off the Land’, International Peacekeeping, vol. 9, no. 2, 2002, p. 100.
Paul Collier, Anke Hoeffler, and Måns Soderbom, ‘Post-conflict Risks’, Centre for the Study of African Economies, 2006.
Emilly Paddon, ‘Partnering for Peace: Implications and Dilemmas’, International Peacekeeping, vol.18, no. 5, p. 519.
Boutros Boutros-Ghali definition of peacebuilding in the UN Agenda for Peace (1992). See: Dorothea Hilhorst and Mathijs van Leeuwen, ‘Grounding local peace organisations: a case study of southern Sudan’, Journal of Modern African Studies, vol. 43, no. 4, 2005, p. 539.
‘A New Partnership Agenda: Chartering A New Horizon for UN Peacekeeping’, Department of Peacekeeping Operations and Department of Field Support, July 2009.
Louise Andersen, ‘Outsiders Inside the State. Post-Conflict Liberia between Trusteeship and Partnership’, Journal of Intervention and Statebuilding, vol. 4, no. 2, 2010, p. 135.
Richard Caplan, ‘Partner or patron? International civil administration and local capacity- building’, International Peacekeeping, vol. 11, no. 2, 2004, p. 230.
M. Bøa ̊s, ‘Making plans for Liberia’, Unpublished paper prepared for the British International Studies Association, 2007. Available from: <http://www.bisa.ac.uk/2007/pps/boas.pdf>. As cited in Louise Andersen, ‘Outsiders Inside the State. Post-Conflict Liberia between Trusteeship and Partnership’, Journal of Intervention and Statebuilding, vol. 4, no. 2, 2010, p. 130.
Jean Daudelin and Lee J.M. Seymour, ‘Peace Operations Finance and the Political Economy of a Way Out: Living Off the Land’, International Peacekeeping, vol. 9, no. 2, 2002, p. 107.
Timothy Donais, Peacebuilding and Local Ownership: Post-Conflict Consensus-Building (New York: Routledge, 2012), p. 9.
Sultan Barakat, ‘The failed promise of multi-donor trust funds: aid financing as an impediment to effective state-building in post-conflict contexts’, Policy Studies, vol. 30, no. 2, p. 110.
Wolfgang Fengler, Ahya Ihsan, and Kai Kaiser, ‘Managing Post-Disaster Reconstruction Finance: International Experience in Public Financial Management’, The World Bank, January 2008, p. 2.
Cedric De Coning, ‘Coherence and Coordination in United Nations Peacebuilding and Integrated Missions – A Norwegian Perspective’, Norsk Utenrikspolitisk Institutt, 2007, p. 2.
De Coning, ‘Coherence and Coordination in United Nations Peacebuilding and Integrated Missions – A Norwegian Perspective’, p. 2.
‘Liberia – 2008 Survey on Monitoring the Paris Declaration: Making Aid More Effective by 2010’, oecd (2008), p. 29–1. referenced December 12, 2012: <http://www.oecd.org/countries/liberia/42243397.pdf>
De Coning, ‘Coherence and Coordination in United Nations Peacebuilding and Integrated Missions – A Norwegian Perspective’.
De Coning, ‘Coherence and Coordination in United Nations Peacebuilding and Integrated Missions – A Norwegian Perspective’, p. 13.
Richard Caplan, ‘Partner or patron? International civil administration and local capacity- building’, International Peacekeeping, vol. 11, no. 2, 2004, p. 239.
Fengler, “Managing Post-Disaster Reconstruction Finance: International Experience in Public Financial Management,” p. 2.
Fengler, ‘Managing Post-Disaster Reconstruction Finance: International Experience in Public Financial Management’, p. 4.
The HSPF operates under the auspices of a Steering Committee, comprised of the MOHSW and all donors that are part of the Joint Financing Arrangement with the MOHSW (currently the World Health Organisation (WHO), the World Bank, the European Union and USAID as well as DFID), as well as the observer – representative of the NGOs (currently Médecins du Monde). See: ‘DFID in Liberia – Operational Plan 2011–2015’, dfid, May 2012, accessed December 12, 2012: <http://www.dfid.gov.uk/Documents/publications1/op/liberia-2011.pdf>.
Barakat, ‘The failed promise of multi-donor trust funds: aid financing as an impediment to effective state-building in post-conflict contexts’, p. 108.
Barakat, ‘The failed promise of multi-donor trust funds: aid financing as an impediment to effective state-building in post-conflict contexts’, p. 108.
Barakat, ‘The failed promise of multi-donor trust funds: aid financing as an impediment to effective state-building in post-conflict contexts’, p.111.
Erin Coppin, Marcus Manuel and Alastair McKechnie, ‘Fragile states: measuring what makes a good pooled fund’, Overseas Development Institute, No. 58, August 2011.
Jacob Hughes, Amanda Glassman, and Walter Gwenigale, ‘Innovative Financing in Early Recovery: The Liberia Health Sector Pool Fund’, Center for Global Development, February 2012.
Nicolas Leader and Peter Colenso, ‘Aid Instruments in Fragile States, Working Paper 5’, uk Department for International Development, March 2005.
Barakat, ‘The failed promise of multi-donor trust funds: aid financing as an impediment to effective state-building in post-conflict contexts’, p. 108.
Barakat, ‘The failed promise of multi-donor trust funds: aid financing as an impediment to effective state-building in post-conflict contexts’, p. 109.
Judith Tendler, ‘Why are social funds so popular?’ in: S. Yusus, W. Wu and S. Evenett (eds), Local Dynamics in the Era of Globalization (Oxford: Oxford University Press, 2000), pp. 114–129.
‘Integrated Missions Planning Process (IMPP) Guidelines endorsed by the Secretary-General’, United Nations, June 2006, p. 3.
Allan Gerson and Nat J. Colletta, Privatizing Peace: From Conflict to Security (New York: Transnational Publishers, 2002), p. 112.
In this project, a study found that providing support to local NGOs in Palestine resulted in almost 50 percent gain in the health care services provided. See: Gerson, Privatizing Peace: From Conflict to Security, p. 116.
Fengler, ‘Managing Post-Disaster Reconstruction Finance: International Experience in Public Financial Management’, p. 2.
Louise Andersen, ‘Outsiders Inside the State. Post-Conflict Liberia between Trusteeship and Partnership’, Journal of Intervention and Statebuilding, vol. 4, no. 2, 2010, p. 134.
Brian Wampler, ‘Expanding Accountability Through Participatory Institutions: Mayors, Cities, and Budgeting in Three Brazilian Municipalities’, Latin American Politics and Society, vol. 46, no. 2, p. 73.
Gary Bland, ‘Supporting Post-conflict Democratic Development? External Promotion of Participatory Budgeting in El Salvador’, World Development, vol. 39, no. 5, 2011, p. 863.
Bland, ‘Supporting Post-conflict Democratic Development? External Promotion of Participatory Budgeting in El Salvador’, p. 866.
Jean Daudelin and Lee J.M. Seymour, ‘Peace Operations Finance and the Political Economy of a Way Out: Living Off the Land’, International Peacekeeping, vol. 9, no. 2, 2002, p.108.
Fengler, ‘Managing Post-Disaster Reconstruction Finance: International Experience in Public Financial Management’, p. 4.
Daudelin, ‘Peace Operations Finance and the Political Economy of a Way Out: Living Off the Land’, p. 108.
Boutros Boutros-Ghali, ‘Empowering the United Nations’, Foreign Affairs, vol. 71, no. 5, 1992, p. 95.
Department of Peacekeeping Operations, United Nations Handbook on UN Multidimensional Peacekeeping Operations, p. 183.
‘Financing and Budgeting’, in Integrated Disarmament, Demobilization and Reintegration Standards
(United Nations, 2006), p. 12.
Department of Peacekeeping Operations, United Nations Handbook on UN Multidimensional Peacekeeping Operations, p. 192.
De Coning, ‘Coherence and Coordination in United Nations Peacebuilding and Integrated Missions – A Norwegian Perspective’, p. 2.
‘The Peacebuilding Fund,’ United Nations Peacebuilding Fund, accessed July 22, 2016: <http://www.unpbf.org/application-guidelines/the-peacebuilding-fund-pbf/>.
According to UNHCR, the QIP initiative “establishes clear linkages with the government, development actors such as UNDP, World Bank, UNICEF and WFP, the donor community and bilateral aid agencies, and supports the overall recovery process.” See: ‘Quick Impact Projects’, p. v.
Jos VanGennip, ‘Post-conflict Reconstruction and Development’, Development, vol. 48, no. 3, 2005, p. 60.
Barakat, ‘The failed promise of multi-donor trust funds: aid financing as an impediment to effective state-building in post-conflict contexts,’ p. 110.
Andrea Tamagnini and Teresa Krafft, ‘Strategic Approaches to Reintegration: Lessons Learned from Liberia’, Global Governance, vol. 16, no. 1, January 2010, p. 14.