This is the output from DFID-commissioned research into the use of pooled funding to support service delivery in fragile and conflict-affected states (FCAS). The aim was to distil practical knowledge from existing studies and, in particular, to capture practitioner experience on the design and implementation of pooled funds, in order to produce:
- an updated summary of current knowledge and knowledge gaps (from a policy perspective) in a policy briefing note;
- more detailed practical guidance for those working on establishing/managing pooled funds for service delivery in FCAS.
The research team reviewed existing literature and selected for detailed review 16 pooled funds which covered a variety of countries, fund managers, and approaches to service delivery. The team’s review of case-study documentation was supported by extensive interviews with people involved in the case-study funds, and sought to learn equally from successes and failures.
Key themes identified included:
- Trade-offs, which make it necessary to be clear and selective in setting pooled fund objectives. Examples of potential trade-offs to consider when designing a pooled fund include:
- Speed of service delivery versus capacity building of government systems.
- Fiduciary risk versus capacity development.
- Donor attribution versus ownership, alignment and use of country systems. (Donors wish to know what their money will fund, but granting the partner government freedom to manage the money is part of capacity building.)
- Short term, visible impacts for political goals versus investing in what may be slower, long term (sustainable) change.
- The importance of context analysis, and the need for continual review of changing contexts, linked to feedback on pooled fund performance and flexibility to adapt in response to experience.
- The need to manage expectations is relevant for initial design and for subsequent monitoring, evaluation and communications.
- Country ownership and engagement with the government is a consistent theme which is relevant at virtually every stage of assessing, designing, managing and phasing out a pooled fund, or transitioning to other aid instruments. In some cases a government’s lack of capacity, or of legitimacy, limits the role it can be given, but sustainability depends on engaging with the government to the extent possible.
- A pooled fund’s relationship with the government is one aspect of risk management. Pooled fund donors should work together to reflect the International Network on Conflict and Fragility (INCAF) objective of moving from risk avoidance to wards better risk management. Individual contributors’ efforts to limit their own perceived fiduciary, political and reputational risks may be inconsistent with achieving an effective balance between risk and opportunity in pursuing objectives.
