DAC Guidelines and Reference Series D A C International Support to Post-Conflict Transition G u DAC Guidelines and Reference Series id RETHINKING POLICY, CHANGING PRACTICE e lin e International Support 1.5 billion people live in countries affected by repeated cycles of violence and insecurity. s These countries face tremendous challenges as they transition from conflict to peace. a n International support can play a crucial role in these contexts, but has so far struggled to d to Post-Conflict Transition R deliver transformative results. This volume presents clear policy recommendations for better e practice in order to improve the speed, flexibility, predictability and risk management of fe r international support during post-conflict transition. e RETHINKING POLICY, CHANGING PRACTICE n c Contents e S Chapter 1. The need for change in a context of risk e r What are the challenges during transition? ie s Why is the international community not meeting these challenges? What are the risks for donors in transition contexts? Recommendations: Strategies for dealing with risk Chapter 2. Coherent planning and prioritisation What are the priorities for transition support? What is limiting effective planning and clear prioritisation? In Recommendations: Helping governments prioritise their development t e Chapter 3. Getting the mix of aid instruments right rn a Why is a mix of aid instruments required? t io What categories of aid instruments are available? n a Guiding principles for choosing the right mix l S Recommendations: Putting together an effective financing strategy u p Chapter 4. A way forward: Transition compacts p Can mutual accountability work in transition? o r t The four elements of a transition compact t o Lessons from recent experiences with compacts P Recommendations: Making transition compacts happen o s t - C o n fl ic Please cite this publication as: t T OECD (2012), International Support to Post-Conflict Transition: Rethinking Policy, Changing ra Practice, DAC Guidelines and Reference Series, OECD Publishing. n s http://dx.doi.org/10.1787/9789264168336-en it io This work is published on the OECD iLibrary, which gathers all OECD books, periodicals and n statistical databases. Visit www.oecd-ilibrary.org, and do not hesitate to contact us for more information. ISBN 978-92-64-16831-2 -:HSTCQE=V[]XVW: 43 2012 04 1 P 432012041Cov.indd 1 13-Mar-2012 10:16:43 AM DAC Guidelines and Reference Series International Support to Post-Conflict Transition RETHINKING POLICY, CHANGING PRACTICE This work is published on the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Organisation or of the governments of its member countries. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. Please cite this publication as: OECD (2012), International Support to Post-Conflict Transition: Rethinking Policy, Changing Practice, DAC Guidelines and Reference Series, OECD Publishing. http://dx.doi.org/10.1787/9789264168336-en ISBN 978-92-64-16831-2 (print) ISBN 978-92-64-16833-6 (PDF) Series: DAC Guidelines and Reference Series ISSN 1990-0996 (print) ISSN 1990-0988 (online) Photo credits: Cover © Konstantin Inozemtsev/istockphoto.com. Corrigenda to OECD publications may be found on line at: www.oecd.org/publishing/corrigenda. © OECD 2012 You can copy, download or print OECD content for your own use, and you can include excerpts from OECD publications, databases and multimedia products in your own documents, presentations, blogs, websites and teaching materials, provided that suitable acknowledgement of OECD as source and copyright owner is given. All requests for public or commercial use and translation rights should be submitted to [email protected]. Requests for permission to photocopy portions of this material for public or commercial use shall be addressed directly to the Copyright Clearance Center (CCC) at [email protected] or the Centre français d’exploitation du droit de copie (CFC) at [email protected]. FOREWORD Foreword O ECD member countries provided USD 46.7 billion in offi cial development assistance to fragile states in 2009. This is a signifi cant investment, but we still struggle to work with our partners in ways that support transformative results in fragile states. The fact that no low-income fragile state has yet achieved a single Millennium Development Goal (MDG) is a stark reminder both of the needs that drive all sides to focus on fragility, and of the daunting challenges that remain. Evidence shows that effective support to transition requires collective and parallel engagement by different policy communities. Despite decades of experience, we have still not been able to build a response that effectively links humanitarian and development assistance, and that reconciles different principles and operational modalities in a way that supports transitions from confl ict to peace. A change in both policy and practice is needed. From Afghanistan to Haiti, and most recently in the Horn of Africa, we have witnessed the results of development approaches that are not designed to meet the challenges of fragile states in a timely and fl exible manner. We know that in many of these countries, unrealistic expectations about capacities and ownership frequently cause delays in development assistance. In the absence of better development funding, humanitarian actors have been left to fi ll the void; yet humanitarian instruments are neither designed nor well-equipped to promote peacebuilding and statebuilding. This, in turn, has a negative impact on the prospects of a successful transition. If we know all this, why has so little changed? Some of the problem might have to do with current approaches to managing risks. Transitions are high-risk environments for development investments and action, yet more often than not, the risks of not engaging in these contexts — both for the countries themselves and for the international community — outweigh the risks of engaging in the fi rst place. The question, therefore, is not whether to engage, but how to engage in ways that are context-specifi c and do not come at an unacceptable cost. The Fourth High-Level Forum on Aid Effectiveness in Busan (2011) was a watershed moment for international development co-operation. More than 40 fragile states and development partners came together to endorse a New INTERNATIONAL SUPPORT TO POST-CONFLICT TRANSITION: RETHINKING POLICY, CHANGING PRACTICE © OECD 2012 3 DDAACC TTrraannssiittiioonn FFiinnaanncciinngg GGuuiiddaannccee..iinndddd SSeecc11::33 0022--MMaarr--22001122 1177::3344::4499 FOREWORD Deal for Engagement in Fragile States, which gives clarity on priorities in these diffi cult contexts by setting out a roadmap for better use of both international and domestic resources. Built on a set of agreed peacebuilding and statebuild- ing objectives, the New Deal also recognises the need for focussed approaches that support country-led transitions out of fragility, and for accepting the risks of engagement with fragile countries. Developed by the DAC International Network on Confl ict and Fragility (INCAF), International Support to Post-Confl ict Transition provides the guidance that development partners need to make good on the commitments they made at Busan. To ensure that development resources are used to support the essential objectives of peacebuilding and statebuilding, we need to bridge the divide be- tween policy and practice to deliver more rapid, fl exible and risk-tolerant sup- port. And because the vastly diverse contexts from one country to another can turn blueprint approaches into recipes for disaster, we cannot afford to take a “one-size-fi ts-all” approach. With these challenges in mind, this guidance calls for support focussed on peacebuilding and statebuilding to enable donors to deliver better results to those who need it most. The suggestions raised in this important publication merit in-depth discussion by all concerned devel- opment partners and will no doubt contribute to shaping the discussion about how to improve delivery in post-confl ict transitions. Brian Atwood Gunilla Carlsson Chair, OECD Development Minister for International Assistance Committee Development Co-operation, Ministry for Foreign Affairs, Sweden 4 INTERNATIONAL SUPPORT TO POST-CONFLICT TRANSITION: RETHINKING POLICY, CHANGING PRACTICE © OECD 2012 DDAACC TTrraannssiittiioonn FFiinnaanncciinngg GGuuiiddaannccee..iinndddd SSeecc11::44 0022--MMaarr--22001122 1177::3344::5599 ACKNOWLEDGEMENTS Acknowledgements T his publication has been prepared at the request of the OECD Development Assistance Committee (DAC) and the UN Secretary-General. The process of developing and preparing the guidance was led by Asbjorn Wee (OECD-DAC Secretariat) under the overall guidance of Henrik Hammargren (Sweden, Chair of the DAC International Network on Confl ict and Fragility Task Team on Financing and Aid Architecture) and Alexandra Trzeciak-Duval (OECD- DAC Secretariat). Rahul Chandran, Sarah Cliffe, James Darcy, Christian Lotz, Stephan Massing, Leigh Mitchell, Nicola Pontara, Sanjana Quazi, Nigel Roberts, Rachel Scott, Jake Sherman, Mariska van Beijnum, Brian J. Williams, Ronald Wormgoor, Vanessa Wyeth and Georgina Yates contributed to the analysis and key policy recommendations. The publication has come as the result of a collaborative effort between members of the DAC International Network on Confl ict and Fragility (INCAF). The INCAF Co-chairs, Koen Davidse (Netherlands), Tobias Nussbaum (Canada) and Jordan Ryan (United Nations Development Programme, UNDP) facilitated the process by organising high-level consultations with multilateral actors in New York, and were instrumental in getting the document approved. Col- leagues and Task Team members from the following countries and organisa- tions provided valuable comments and contributions throughout the prepa- ration process, including: Australia (Jane Chandler, Mat Kimberley, Lyndal Manson, Arthi Pathel, Natasha Smith), Belgium (Martinus Desmet, Xavier Rou- ha), Canada (Michael Koros, He Xiang), Denmark (Mette Strand Gjerløff, Tania Schimmell), Finland (Satu Lassila), France (Francois Gaulme, Valerie Maugy, Mathieu Robin), Germany (Sabine Brickenkamp, Sophie Kraume, Henning Plate, Christine Toetzke), Ireland (Ciara O’Brien), Japan (Ai Imai, Motoyuki Ishize, Ryutaro Murotani), Netherlands (Koen Davidse, Ronald Wormgoor), Norway (Tom Edvard Eriksen, Elisabeth Schwabe Hansen), Portugal (Manuela Ferreira), Sweden (Karin Andersson, Johan Frisell, Ulrica Reuterwall), Switzerland (Sego- lene Adam), United Kingdom (Marcus Lenzen, Rebecca Dale, Georgina Yates, Bella Bird, Sue Lane, Kate Whyte), United States (Nance Kyloh, Neil Levine, Rachel Locke, Gary Winter), European Commission (Federico Birocchi, Oliver Blake, Bronte Flecker, Agata Nieboj, Corrado Scognamillo, Dorothee Starck), In- ternational Monetary Fund (Dominique Desruelle, Bhaswar Mukhopadhyay), INTERNATIONAL SUPPORT TO POST-CONFLICT TRANSITION: RETHINKING POLICY, CHANGING PRACTICE © OECD 2012 5 DDAACC TTrraannssiittiioonn FFiinnaanncciinngg GGuuiiddaannccee..iinndddd SSeecc11::55 0022--MMaarr--22001122 1177::3344::5599 ACKNOWLEDGEMENTS OECD (Sara Fyson, Donata Garrasi, Erwin van Veen), UNDP (Peter Batchelor, Bruno Lemarquis, Christian Lotz, Stan Nkwain Jennifer Worrell), UN Offi ce for the Co-ordination of Humanitarian Affairs (OCHA) (Michael Jensen, Steve O’Malley, Sanjana Quazi), UN Peacebuilding Support Offi ce (PBSO) (Brian J. Wil- liams, Kristina Koch-Avan, Calum Gardner) and the World Bank (Alastair Mck- echnie, Nicola Pontara, Greg Ellis, Steve Ndegwa, Faris Hadad-Zervos). In addition, the development of this guidance benefi tted from frequent in- teraction and feedback from members of the UN Development Group (UNDG) Executive Committee on Humanitarian Affairs (ECHA) Working Group on Transition, including: Sandra Aviles, Anja Bille Bahncke, Denise Brown, Isabel Candela, Sofi a Carrondo, Lisa Doughten, Henriette Keijzers and Nalinee Nip- pita, Rachel Dore Weeks, Bettina Woll and George Zachariah. Several rounds of consultations were also organised to solicit feedback and further sharpen the recommendations, including a high-level consultation with heads of UN agen- cies and programmes, with the World Bank, with members the Inter-agency Steering Committee, and with the European Commission. Valuable feedback on the operational aspects of the guidance was provided by Giovanni Bosco, Jeanne Briggs, Nick Crawford, Fiona Davies, Philip Dive, Stef Deutekom, Lise Grande, Mathew Leslie, Daniel Lopez-Acuna, James C. Lovelace, Jonas Mfoua- tie, Adrian Morris, Joanna Nickolls and Oliver Ulich. James Eberlein and Fiona Hall provided invaluable editorial assistance and Stephanie Coïc and Isabel Huber contributed to the preparation of this publication. 6 INTERNATIONAL SUPPORT TO POST-CONFLICT TRANSITION: RETHINKING POLICY, CHANGING PRACTICE © OECD 2012 DDAACC TTrraannssiittiioonn FFiinnaanncciinngg GGuuiiddaannccee..iinndddd SSeecc11::66 0022--MMaarr--22001122 1177::3344::5599 TABLE OF CONTENTS Table of Contents Abbreviations and acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Executive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 1. The need for change in a context of risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 What are the challenges during transition?. . . . . . . . . . . . . . . . . . . . . . . . . 18 Why is the international community not meeting these challenges? . . 19 What are the risks for donors in transition contexts?. . . . . . . . . . . . . . . . 22 Recommendations: Strategies for dealing with risk. . . . . . . . . . . . . . . . . . . . 27 2. Coherent planning and prioritisation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 What are the priorities for transition support?. . . . . . . . . . . . . . . . . . . . . . 32 What is limiting effective planning and clear prioritisation? . . . . . . . . . 35 Recommendations: Helping governments prioritise their development . . . 39 3. Getting the mix of aid instruments right . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Why is a mix of aid instruments required? . . . . . . . . . . . . . . . . . . . . . . . . . 46 What categories of aid and associated instruments are available? . . . . 46 Guiding principles for choosing the right mix. . . . . . . . . . . . . . . . . . . . . . . 51 Recommendations: Putting together an effective fi nancing strategy. . . . . 57 4. A way forward: transition compacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Can mutual accountability work in transition?. . . . . . . . . . . . . . . . . . . . . . 66 The four elements of a transition compact . . . . . . . . . . . . . . . . . . . . . . . . . 67 Lessons from recent experiences with compacts. . . . . . . . . . . . . . . . . . . . 71 Recommendations: Making transition compacts happen. . . . . . . . . . . . . . . 75 Annex A. Key elements of a reform agenda to implement the DAC Guidance on Transition Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 INTERNATIONAL SUPPORT TO POST-CONFLICT TRANSITION: RETHINKING POLICY, CHANGING PRACTICE © OECD 2012 7 DDAACC TTrraannssiittiioonn FFiinnaanncciinngg GGuuiiddaannccee..iinndddd SSeecc11::77 0022--MMaarr--22001122 1177::3344::5599 TABLE OF CONTENTS Tables 3.1. Effectiveness criteria for choosing aid instruments during transition . 54 3.2. Options for a more effi cient division of labour across different global transition funding mechanisms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 4.1 Transition compacts: roles, benefi ts, contributions and actions. . . . . . . 79 Figures 1.1. Conceptual framework for understanding risks. . . . . . . . . . . . . . . . . . . . . 25 2.1. Broad categories of transition priorities. . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 4.1. Elements of transition compacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Boxes 1.1. What do we mean by transition and transition fi nancing? . . . . . . . . . . . 18 1.2. Challenges and opportunities of different principles for engagement. . 23 1.3. Pooled funds, fi duciary risks and the limits of effectiveness. . . . . . . . . . 29 2.1. International agreements on transition objectives and priorities . . . . . 33 2.2. International planning tools and their usefulness during transition. . . 37 2.3. Transition planning in Timor-Leste, 2008-11. . . . . . . . . . . . . . . . . . . . . . . . 41 2.4. Sierra Leone: Donor alignment with the Agenda for Change. . . . . . . . . . 42 3.1. Using pooled funds in transition situations: Secrets of success . . . . . . . 49 3.2. Understanding budget aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 3.3. Dual accountability: GEMAP in Liberia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 3.4. Case study: Sequencing aid in Afghanistan. . . . . . . . . . . . . . . . . . . . . . . . . 56 3.5. Practical options to improve UN-World Bank relationships. . . . . . . . . . . 62 4.1. Aid information management systems in transition. . . . . . . . . . . . . . . . . 69 4.2 Learning from the “fi rst generation” of compacts. . . . . . . . . . . . . . . . . . . . 74 4.3. Managing transition compacts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 8 INTERNATIONAL SUPPORT TO POST-CONFLICT TRANSITION: RETHINKING POLICY, CHANGING PRACTICE © OECD 2012 DDAACC TTrraannssiittiioonn FFiinnaanncciinngg GGuuiiddaannccee..iinndddd SSeecc11::88 0022--MMaarr--22001122 1177::3344::5599