This paper presents evidence, analysis and evaluation of the use of aid instruments in fragile states, based on a literature review and questionnaire responses from members of the OECD International Dialogue on Peacebuilding and Statebuilding Working Group on Aid Instruments. It highlights the importance of factors including: a mix of aid instruments (based on context); aid that is speedy, flexible and predictable; longer-term capacity-building; use of government systems; and aligning aid with the budget. It reflects the state of the literature and the international discussion as of June 2011.
Donors use a multiplicity of aid instruments in fragile states, with varying characteristics and levels of success. There are six categories of aid instruments in common use: general budget support; sector budget support; government-managed pooled funds; jointly managed trust funds; project support; and support to and through non-state actors. The following recommendations emerged from the study. They focus in particular on the factors that have been shown to have a determining impact on the success of aid instruments.
- Recognise that a mix of instruments is required to deliver better results in fragile states
- Make a ‘new deal’ with fragile states: identify a group of fragile states where the risks of the return to conflict are so high and the needs for rapid development are so great that a set of standard changes or exemptions to normal aid regulations/practices should be applied
- Increase speed and flexibility of aid in fragile states
- Recognise the g7+ has both a clear preference for more aid through government systems and a clear willingness to accept more safeguards to manage the risks involved
- Align all support in fragile states – including project aid, humanitarian aid and security support – to the country’s budget and ensure all support prioritises peacebuilding and statebuilding objectives
- Provide more predictable, sustained financing in fragile states
- Ensure aid delivery also supports development of long-term capacity
- Strengthen transparency, results, accountability and value for money in fragile states.
