3 Delivering aid in fragile states |
37. Working in fragile states carries risks: that
DFID's funds will be siphoned off or used for the wrong purpose,
and that staff operating there will be the victims of violence.
The latter is particularly acute in theatres of war, but is nevertheless
a real threat in countries such as the DRC, which are recovering
from conflict and where outbreaks of violence continue.
38. DFID recognises that choosing to operate in fragile
and conflict-affected states is a risky strategy and that these
risks need to be managed. DFID says:
Our increased focus on fragile and conflict affected
states will be accompanied by a willingness to take well-judged
and calculated risks and to innovate to allow us to deliver transformative
results. Fragile and conflict-affected states present inherently
risky environments for development assistance. However the risks
of inaction in these contexts are also high. We need to find ways
to engage that can deliver both short term results on the ground,
and potentially transformative longer term results, but which
do not cause harm or come at too high a cost. Our programmes therefore
need to be accompanied by a robust approach to risk management.
The Permanent Secretary told us recently that DFID's
approach was "to look at proposed investment, to identify
all the ways in which it could go wrong and then to design it
in such a way that those things are mitigated away."
FRAUD AND CORRUPTION
39. The National Audit Office (NAO) has highlighted
risks from fraud and corruption to DFID's programmes in fragile
states. It expressed concern that many of the fragile countries
where DFID was increasing its funding achieved an extremely low
score on the Transparency International Perception of Corruption
Index. According to the NAO "all eleven countries where the
Department intends to increase spending by more than 50% over
the next four years have a score of lower than 3.0 in the Transparency
The NAO further considered that DFID greatly underestimated the
extent of fraud within its own programmes.
The Independent Commission for Aid Impact (ICAI) has also found
that DFID has a fragmented approach to managing corruption and
has recommended that it develop an explicit anti-corruption strategy.
40. DFID says it has a "zero tolerance"
approach to corruption in its programmes.
We asked DFID how it could ensure its programmes were immune from
the widespread corruption prevalent in some places, especially
where DFID uses third parties to deliver its programmes. The Permanent
I accept that we need to get better at thinking forward
and being proactive. I think that is especially true in the anti
corruption work we do, which is not about safeguarding our own
resources but is about overall corruption in the environmentstrengthening
accountability, media, parliaments, public accounts committees,
auditors general. It is also about working with other donors
in a more effective way. It is also about using capacity in the
UK, as we have done with the Met Police and the City of London
Police, to track down stolen resources and to go after the people
who have stolen them. There is a whole load of things we can
do that are more proactive and front foot. I completely accept
we should do more of that and we intend to.
CHOICE OF PARTNERS
41. One of the ways in which DFID manages risk is
through careful choice of its delivery partners. In countries
where "government legitimacy and commitment to poverty reduction
is in question" DFID does not fund the government directly
but instead seeks to "ensure shadow alignment with state
systems and support for key reformers in government."
DFID also identifies NGOs and other non-state actors through which
it can deliver services in particular sectors where government
systems are too weak.
42. In the DRC we spent a day with the International
Rescue Committee (IRC) which received funding from DFID for increasing
access to healthcare. Health care provision in the DRC is inadequate:
one in seven children dies before their fifth birthday and 100
women per day die in childbirth.
DRC will not meet MDG 4 (reducing child mortality) or MDG 5 (improved
maternal health). The project will be implemented in 20 zones
across four provinces in the country. It is targeting 2.1 million
people. It will cost
£60 million over a five year period from 2008 to 2013. One
of the key benefits of the programme is the provision of free
health care for vulnerable groups such as pregnant women and children
43. IRC told us that as a result of the provision
of free treatment there had been improved health outcomes: a 40%
increase in the use of services and a 25% reduction in maternal
mortality in the last six months. IRC also provided obstetric
care, HIV/AIDS services focusing on reducing transmissions from
mother to child; sexual assault services and family planning.
It trained service providers and provided inputs.
44. IRC's work was closely aligned to government
health services at provincial level. It helped to rehabilitate
health facilities including providing essential medical and non-medical
equipment, furniture and supplies. The Government did not pay
salaries regularly so IRC had also started to provide incentive
paymentsbased on performanceto encourage staff.
These could amount to an extra $500 per month for a doctor and
$150 per month for a nurse. 70% of this was linked to performance
and 30% to improved health indicators. IRC also told us that one
result of the programme was to build confidence in government
systems: "the approach that has been taken has built the
confidence a little bit more in the Government structures. [...]People
just believe a little bit more in the system and working through
the Ministry of Health."
We were impressed with the commitment and professionalism of many
of DFID's NGO partners in the DRC.
45. In contrast, in countries where government systems
have greater capacity, DFID aims to work through the state. In
Rwanda, DFID has greater confidence in the Government's ability
to deliver services and has consequently put a significant portion
of its funding as general and sector budget support. Budget support
is likely to represent 65% of the UK's total programme in Rwanda
with 45% provided through general budget support and 20% through
sector budget support.
The UK has been providing budget support (both sector
and general) in Rwanda for over a decade. Budget support has proven
to be both effective and good value for money. It strengthens
governance and public financial management systems and builds
capacity through ownership while reducing transaction costs. And
it has allowed us to build a strong relationship with the Government
of Rwanda and other budget support providers. In 2010-2011[...]we
are providing £35.75 million in budget support.
The Secretary of State told us: "If you can
trust Governments, there is no doubt at all that budget support
is the best way of doing development because it ensures that the
ownership of systems rests with the country itself."
46. It should be noted that budget support is only
one, often controversial, method of delivering assistance to governments.
DFID often has a number of programmes which feed into government
systems but which may not be classed as budget support per se.
In Ethiopia it has a social protection programmethe Protection
of Basic Serviceswhich is administered by an independent
government organisation and which supports about 7.5 million people.
The programme uses aspects of local government, but it does not
go through the central government in Addis Ababa and it relies
on regional implementation to deliver it.
This method of delivery was adopted in response to specific actions
by the Government of Ethiopia in 2005. The Secretary of State
explained "when the Meles Government shot a number of students
who were demonstrating on the street. Everyone was clearly horrified
by that and quite rightly people said that some action must be
taken." He explained
that it was important to be able to continue to help poor people
in Ethiopia by finding new ways of delivering aid.
WORKING WITH OTHER DONORS
47. The UK recognises that no single donor or multilateral
organisation can adequately address conflict and fragility on
its own. DFID makes choices in each country about whether to spend
its aid through multilateral organisations such as the World Bank
or UN agencies, bilaterally or jointly with other bilateral donors.
It may work with the other donors to carry out joint conflict
needs assessments or agree national strategies such as Poverty
Reduction Strategy Papers.
48. Additionally, Multi Donor Trust Funds, where
donors pool development assistance are often used in fragile and
conflict-affected states to provide a higher level of reliability
for donors and reduced fragmentation of aid for developing country
governments. DFID is supportive of these as:
an effective way of improving coordination, reducing
transaction costs and making funding more predictable particularly
in conditions where other development instruments cannot come
online yet, or when budget support is a limited option. They can
promote alignment by creating a joint forum between government
and donors for decision-making and policy dialogue and provide
a means for disbursing straight into the national budget on a
reimbursement basis, even in very weak fiduciary environments.
49. It not clear how DFID makes choices about whether
to use multilateral or bilateral channels. DFID says that its
2010 Multilateral Aid Review (MAR) placed an emphasis on multilaterals'
performance in fragile and conflict-affected countries and found
that, outside the humanitarian system and the European Commission,
"many of the multilaterals would benefit from considerable
strengthening of their work in fragile contexts."
Nevertheless DFID spent 29% of its budget in DRC and 49% in Rwanda
through multilateral organisations.
50. DFID informed us that 17 donors collectively
participated in the DRC Country Assistance Framework, which is
the main instrument for donor coordination.
In Burundi, DFID has been delivering a programme on behalf of
the Swedish development agency, and has persuaded other bilateral
and multilateral donors to take over some of its programmes when
DFID closes its bilateral aid programme there. In the three countries
we visited, DFID demonstrated a commitment to working with other
donors. Where effective, this can add value for the developing
country, by reducing the costs of managing multiple and competing
aid programmes, and decrease risks for the donor. However, as
we note in chapter four, coordination between donors in security
sector reform in the DRC, which is the responsibility of the UN
peacekeeping force, has been poor.
51. DFID has
a range of options to choose from in terms of how it delivers
aid in fragile and conflict-affected states and whether it does
this in cooperation with other donors or not. This helps DFID
to opt for ways of delivering assistance which are context specific,
which we support. However, DFID should be clearer about how it
makes these choices. In relation to budget support for Ethiopia,
we agree that poor people should not suffer as a result of the
actions of their government. DFID should set out specific governance
conditions under which it will provide budget support, and any
under which it will be withdrawn. It should also, as a matter
of course, set out clearly how its aid budget for each country
is distributed between multilateral and bilateral spending and
the reasons for this pattern and distribution.
COSTS OF DELIVERY, ACHIEVING RESULTS
52. DFID has acknowledged that it is more costly
to deliver aid in fragile states. These increased costs relate
to increased security for staff as well as the need to have more
staff on the ground to deliver and monitor programmes. The Secretary
of State argued:
"if we look at the cost of getting a girl into
school and take two of the states that you visitedRwanda
and the DRCthe cost of educating a girl in the DRC may
be three times higher than it is in Rwanda because the DRC is
so dysfunctional, but it may actually be better value for money
because it is so much more difficult to educate children in the
DRC. So it is much more difficult and, of course, the risks are
DFID sets out some of the reasons why costs may be
higher in the DRC than other comparable countries in its operational
plan, for example due to poor transport linkages.
It is nevertheless difficult to ascertain whether these increased
costs are justified, or whether they could be lower, if DFID chose
different partners or relied less on national systems and more
on community-led initiatives.
53. DFID assured us it placed a high value on monitoring
its programmes. It said it was now "buying results rather
than delivering budgets".
In the DRC DFID had "dedicated the equivalent of one full
time person to results, increased measuring and evaluation capacity
in programme teams and allocates up to 10% of the programme budget
to measuring and evaluation."
DFID was confident that its structures were such that it
could "follow the money".
Saferworld expressed some concerns:
It is important to ensure the way DFID measures impact
is realistic and avoids falling between the twin traps of the
"unattributable" and the limited realm of the easily
quantifiable (counting the number of workshops held or training
programmes delivered). Policies and programmes aimed at promoting
changes in institutional and individual policies, attitudes and
behaviour are often difficult to quantify meaningfully and require
qualitative indicators to accurately assess, as much as quantitative
Developing ways of assessing impact is widely and
rightly recognised as challenging. Saferworld believes that a
key part of such evaluation could be the measuring of public perceptions
of safety and security in fragile and conflict-affected states,
undertaken through a range of activities such as surveys, interviews
and in-depth assessments at a local level.
The World Development Report 2011 also recommended more use of
opinion polls and surveys on whether welfare is increasing as
an indicator to demonstrate progress in the aftermath of conflict.
54. It is more
risky and more costly to deliver programmes in fragile and conflict-affected
states. DFID must be open about these risks and open about the
costs. However, we want to see evidence that DFID is working to
bring down the cost of delivery of its programmes in these states.
55. DFID's focus
on monitoring results is welcome, and can be used to demonstrate
that DFID is achieving beneficial impacts from its expenditure.
However, we caution that achieving results in fragile and conflict-affected
states is more complicated than in stable or peaceful countries
and there is always the risk that they will not be achieved because
of the lack of security, and because fragile and conflict-affected
states are often also places where fraud and corruption can thrive.
We do not accept that in a context where fraud and corruption
are rife that DFID can always mitigate against this adequately,
especially where it sub-contracts delivery of these programmes
to third parties. This means it may not be able to guarantee value
for money for every pound it spends. DFID should be open about
this so that expectations of results are realistic, without being
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The range of possible scores is from 0 to 10 with 0 being highly
corrupt and 10 being highly clean Back
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