Managing revenues and building capacity for accountable and fair service delivery are key areas of statebuilding and peacebuilding reforms. The literature makes a distinction between two types of public administration activities: basic activities, and service delivery activities (UNDP, 2013a).
Public financial management (PFM)
Public financial management (PFM) is considered a ‘basic’ public administration activity (also called ‘core’ or ‘upstream activities’). It includes reforms to budgeting, the treasury, accounting, financial reporting, or audit. PFM reforms are considered key to statebuilding and peacebuilding as they can: improve the social contract between state and citizen; improve the transparency of public finances; pay essential public salaries and services; and process and allocate resources to reconstruction priorities (World Bank, 2012b).
Public administration activities – including PFM reforms – are often considered a precursor to policy implementation: a government can contract out some service delivery activities, but not budgeting or policy planning. Better PFM data can inform the design of more realistic policies and priorities (Agborsangaya-Fiteu, 2009). There are debates about preferable sequences of the different PFM reforms – with World Bank (2012b) analysis arguing there is not one sequence or best practice.
Developing the state’s capacity for taxation is considered vital for the development of state capacity and to underpin the formation of the social contract (Fritz & Rocha Menocal, 2007; Whaites, 2008). A widely argued point is that revenues raised through taxation, rather than through aid, arguably better support state accountability to its citizens and, in turn, state legitimacy.
Taxation and public expenditure are also important redistributive mechanisms. They can allow the state to correct horizontal and vertical inequalities – issues that may have contributed to conflict. A paper synthesising the findings from ten years of DFID-funded research on governance and FCAS (from 2001 to 2010), finds that wars are more likely in countries where cultural or ethnic groups feel there is economic, political and social inequality (DFID, 2010c).
Key challenges, trade-offs and relationship with other state functions
A UNDP (2013a) report based on seven FCAS case studies and a literature review argues that the inclusiveness of public administration – including PFM – can deepen the political settlement and reduce risks of conflict. It posits functioning ‘basic’ public administration activities as key mechanisms to ensure national ownership of statebuilding and peacebuilding processes (UNDP, 2013a).
The early stages of post-conflict reconstruction present windows of opportunity to introduce reforms that may be contested at other times (e.g. in areas like tax reform, and transparency). However, trade-offs identified include: pushing a reform agenda that could potentially destabilise the political settlement; initiating reforms that are not locally appropriate; and focusing on policy reform to the detriment of other urgent needs (e.g. relief activities) (Meagher, 2011). There is little evidence or guidance on how to prioritise or sequence reforms, or how to take advantage of these windows of opportunity (World Bank, 2012b). UNDP (2013a) criticises donors for pushing for systemic reforms too quickly in post-conflict countries, before supporting basic functionality.
Service delivery
Service delivery typically refers to the provision of water, health, education and sanitation services. Although often considered an expected function, providing services is critical in FCAS as people need basic services for survival, and also as it is considered a way to demonstrate quick and visible results to populations. It can do harm to delay investing in services.
Key challenges, trade-offs and relationship with other state functions
The relationship between service delivery and state legitimacy is a key emerging area of focus in the literature. A state’s service delivery performance had been thought to have a direct relationship with state legitimacy. However, recent research suggests that this is a non-linear relationship and state legitimacy is ‘conditioned by expectations of what the state should provide, subjective assessments of impartiality and distributive justice, the relational aspects of provision, how easy it is to attribute (credit or blame) performance to the state, and the characteristics of the service’ (Mcloughlin, 2014, p. 1; Parks, Colletta & Oppenheim, 2013).
There are ongoing debates about how to ensure that non-state provision of services supports rather than undermines the development of state capacity and legitimacy. In states with weak capacity it may not be possible or efficient to deliver services through state structures, and there may be limited state capacity in certain geographic areas. Donors may decide to set up parallel mechanisms to deliver services. There are many examples of donors not doing this effectively, and parallel systems risk undermining the state’s long-term capacity. However, there are also examples that indicate that if managed well, non-state provision of services can both fill a capacity gap and develop state capacity – see Box 8 (OECD, 2010a).
Box 8: Case study – Contracting out customs operations and reform in Mozambique
In the 1990s, as part of wide-ranging reforms, post-conflict Mozambique contracted an international firm to manage its customs operations. The firm was also responsible for training new national customs officers, and for a gradual transfer of responsibilities back to the government. The contract had three phases with clear targets for transferring responsibilities, combining external management services with internal capacity building.
Source: OECD (2010a, p. 79)
Another key trade-off is pursuing short-term, visible impacts versus long-term change. This dilemma is found across different thematic areas, but is particularly relevant to service delivery due to its relationship with societal expectations (see Box 9). The inclusivity of services is considered important for preventing conflict and managing expectations. Services provided inequitably can aggravate horizontal inequalities and risk undermining stability (McLean Hilker, Garrasi & Griffith, 2008).
Box 9: Case study – Speed of delivery versus capacity building in Timor-Leste
In a World Bank working paper, Rohland and Cliffe (2002) examine state-(re)building activities in Timor-Leste post-1999 and highlight as a key lesson the trade-off between speed of delivery and capacity building.
The first set of activities under the Trust Fund for East Timor in 2000 primarily used community, NGO and private sector implementation mechanisms – facilitating rapid local reconstruction, with visible results on the ground (including providing community-based irrigation, and lines of credit for the private sector) (Rohland & Cliffe, 2002). The successful provision of services, and the community-driven reconstruction programme, are credited as key to maintaining early support and confidence in reconstruction efforts. The activities also ‘instilled from the beginning a sense of the importance of participatory reconstruction planning and democratic local institutions’ (p.15).
However, as international efforts were reduced, extensive capacity gaps emerged in domestic technical and management systems and skills. Subsequently it was identified that capacity-building should have been prioritised earlier in the reconstruction process (Rohland & Cliffe, 2002; Lewarne & Snelbecker, 2004).
Sources: Rohland and Cliffe (2002); Lewarne and Snelbecker, 2004, p. 79-88
- Other ‘basic’ public administration activities include: policy formulation; managing the centre of government; civil service management; local governance; and aid coordination (UNDP, 2013a).
- As summarised in a blog by ODI’s Philip Krause.
- Agborsangaya-Fiteu, O. (2009). Governance, fragility, and conflict. Reviewing international governance reform experiences in fragile and conflict?affected countries. Washington, DC: World Bank
See document online - DFID. (2010c). Politics of Poverty: Elites, Citizens and States (10 years of DFID funded research 2001-2010). London: DFID.
See document online - Fritz, V & Rocha Menocal, A. (2007). Understanding Statebuilding from a Political Economy Perspective. An Analytical and Conceptual Paper on Processes, Embedded Tensions and Lessons for International Engagement (Report for DFID’s Effective and Fragile States Team). London: ODI.
See document online - Lewarne, S. & Snelbecker, D. (2004). Economic Governance in War Torn Economies: Lessons Learned from the Marshall Plan to the Reconstruction of Iraq (Long Report Prepared for USAID). Arlington: TSG.
See document online - McLean Hilker, L., Garrasi, D. & Griffith, L. with Purdekova, A. & Clarke, J. (2008). Scoping a long-term research programme on conflict, state fragility and social cohesion (Report prepared for DFID).
See document online - Mcloughlin, C. (2014). When Does Service Delivery Improve the Legitimacy of a Fragile or Conflict-Affected State? Governance.
See document online - Meagher, P. (2011). Statebuilding in fragile and post-conflict situations: a literature review. The Urban Institute and the World Bank/PRMPS. Unpublished.
- OECD. (2010a). Handbook on Contracting Out Government Functions and Services in Post-Conflict and Fragile Situations. Paris: OECD.
See document online - Parks, T. Colletta, N. & Oppenheim, B. (2013). The Contested Corners of Asia: Subnational Conflict and International Development Assistance. San Fransisco: The Asia Foundation.
See document online - Rohland, K. & Cliffe, S. (2002). The East Timor Reconstruction Program: Successes, Problems and Tradeoffs. World Bank.
See document online - UNDP. (2013a). Lessons Learned Review of UN Support to Core Public Administration Functions in the Immediate Aftermath of Conflict. UNDP. (Via email).
See summary online - Whaites, A. (2008). States in development: understanding state-building (DFID Working Paper). London: DFID.
See document online - World Bank. (2012b). Public Financial Management Reforms in Post-Conflict Countries: Synthesis Report. Washington, DC: World Bank.
See document online
