The Work of the Independent Commission for Aid Impact - June 2012

Written evidence submitted by Saferworld

1. Saferworld welcomes the International Development Committee’s decision to conduct an inquiry into ICAI’s work. Saferworld has prepared this submission based on more than 20 years of work to prevent violent conflict, drawing on its presence in 15 conflict-affected and fragile states. It focuses on the areas of the International Commission on Aid Impact’s (ICAI) work on which Saferworld has expertise and experience and concentrates on ICAI’s approach to assessing DFID’s impact and value for money.

2. The International Development Committee has recent conducted two inquiries into UK aid in conflict affected and fragile states, and is in the process of conducting a third. [1] The first two reports rightly highlight that making aid effective in conflict contexts requires different factors to be taken into account as compared to stable contexts. Saferworld recommends that the Committee apply these insights when examining ICAI’s work, to help ensure that the scrutiny provided by ICAI takes full account of the Government’s conflict prevention agenda and the approach to development assistance it entails.

ICAI’s role and approach

3. Saferworld strongly welcomes ICAI’s role in ensuring accountability and effectiveness of UK aid both for the recipients of aid and the UK taxpayer. In particular, Saferworld recognises ICAI’s potential to generate a more evidence-based debate with the UK media, electorate and policy community on how the UK’s resources can be best used to achieve development and peacebuilding impacts over the long term.

4. The UK Government has committed to spending 30% of official development assistance in conflict-affected and fragile states, and the Secretary of State for International Development has named conflict prevention as one of his top two priorities for development spending. [1] Building on the recognition that fragile and conflict affected states are the furthest behind in progress towards achieving the Millennium Development Goals, it is particularly important that ICAI scrutinises aid spending in fragile contexts in order to ensure that long-term development and peacebuilding impacts are achieved.

5. Saferworld is in broad agreement with ICAI’s approach to analysing DFID’s impact and value for money. At the same time, we urge ICAI to allow more time and go to greater lengths to consult with civil society and the public in assessing the impact of DFID spending, and to deepen its focus on the impact of UK aid on conflict dynamics.

6. The UK Government recognises that preventing conflict can make an important contribution to poverty reduction. It is therefore vital that DFID should ensure that UK aid supports peacebuilding and does not inadvertently contribute to drivers of conflict, even in relatively stable environments. ICAI’s evaluations thus far have tended to focus on the effectiveness of DFID programming in terms of service delivery and direct impacts on poverty reduction, but could be strengthened through more routine consideration of the impact of UK aid on governance and conflict dynamics. As an illustration of how ICAI could integrate a focus on conflict and governance issues into its work, this submission sets out below a case study which offers a reading of ICAI’s report on the management of UK budgetary support operations from a conflict prevention perspective.

Case study: Comments on ICAI’s report on the management of UK budgetary support operations from a conflict prevention perspective

7. The injection of large amounts of resources into a conflict-affected country can have an impact on the political economy of conflict – both positive and negative. Thus a report on this issue area should duly highlight risks relating to conflict sensitivity. These risks include that of supporting states that lack legitimacy through general budget support, which could help to entrench autocratic regimes and contribute to future fragility, undermining development gains.

8. ICAI’s report on the management of UK budgetary support operations [1] is right to argue that "the amount of budget support should… be determined by reference to the policy and institutional environment". At the same time, the report could go further by elaborating on what kind of policy and institutional environments provide an appropriate context for budget support, and on the risks associated with providing budget support under the wrong circumstances – including the risks of fuelling conflict or supporting deteriorations in governance.

9. The ICAI report notes that DFID "needs clearer criteria for determining the amount of budget support to provide and a greater willingness to adjust the level in response to changes". It argues that "DFID should determine the amount of budget support to provide based on an assessment of how much poverty reduction can realistically be achieved through expanding public expenditure given the quality of national policies and institutions." Clearer criteria are indeed needed for making decisions on budget support, but the report could go further by pointing out that they should include criteria related to conflict prevention much more explicitly.

10. ICAI argues that DFID should increase its focus on public financial management, anti-corruption and managing fiduciary risk when delivering budget support. Managing financial risks is an important aspect of managing conflict risks, as corruption can be a driver of public disaffection and marginalisation that can lead to conflict. However, these are related but separate risks, and the report could have made this clearer by elaborating further on how to manage conflict-related risks with increased attention.

11. While the report touches on issues of good governance and accountability, particularly in the case of Tanzania, it does not consider the impact of budgetary support in conflict-affected and fragile states as directly as it could. It is Saferworld’s view that effects on governance and conflict dynamics are a prime consideration in at least half of the countries where DFID provided budget support in 2010-2011. ICAI notes that among the 14 recipients of UK budget support in that period, only Sierra Leone and Nepal are ‘fragile states’, however Saferworld would argue that impacts on governance and conflict dynamics would also be a central issue in Rwanda, Moldova, Ethiopia, Pakistan and Uganda.

12. From a conflict prevention perspective, it would have been particularly useful for ICAI to include a case study of Ethiopia (the second largest recipient of UK aid in 2009-2010) in its report on budget support. The Human Rights Watch report Development without Freedom: How Aid Underwrites Repression in Ethiopia underscores the direct links between budget support and conflict dynamics in that context. [2] ICAI does note that, "In 2005, the then Secretary of State for International Development terminated general budget support to Ethiopia following large scale violence during an election campaign. This was, however, replaced shortly afterwards with a sector budget support programme supporting local service delivery but without channelling funds through central government." However, the discussion on this in ICAI’s report could go further, since even sectoral budget support can be misused or free up resources for expenditure that is not in line with DFID’s approach to development, human rights and conflict prevention.

13. As ICAI notes, DFID does have policy criteria designed to avoid reinforcing actors who are not committed to good governance, peacebuilding and human rights fulfilment: "budget support should only be provided to a government that demonstrates a credible commitment" to "respecting human rights and other international obligations". DFID also takes into account "whether the budget seeks to address inequalities between different regions or social groups". Both of these are important commitments that could help ensure that DFID supports actors who are committed to addressing drivers of conflict. Thus it is useful for ICAI to point out that "no minimum standard for compliance with international human rights obligations is specified" by DFID. However, again, ICAI’s analysis on this point could go further: its finding is that "DFID is now well informed about the human rights situation in its partner countries, both through its periodic Country Governance Analysis and through more regular monitoring". However it remains to be assessed how being better informed about the human rights situation will inform DFID’s decision-making on budget support at country level in practice. ICAI could go further in analysing what the "credible commitments" by governments that qualify them to receive UK budget support could look like across different issue areas, to help the UK ensure that it supports the efforts of only those governments who themselves are committed to making progress on human rights and peacebuilding.

14. ICAI rightly encourages DFID to "capture the transformational effects of UK budget support" as part of its lesson learning in this area. Considering that budget support is likely to impact on the political economy of conflict affected states where it is used, Saferworld would suggest that ICAI should support DFID in further analysing the intended and unintended impacts on conflict and governance dynamics of budget support. Initial efforts by Saferworld to consider a broad range of views among civil society on these issues have provided some interesting findings which illustrate some of the perspectives that need to be taken further into account. [3]

Conclusion

15. The case study above provides one illustration of how ICAI could better ensure that its inquiries take into account the impacts of DFID programming on conflict dynamics. Given the Government’s commitment to reducing poverty by seeking to prevent violent conflict through its aid spending, this is a crucial element of ensuring that UK aid is effective. Saferworld therefore recommends that a conflict prevention perspective should be incorporated into all of ICAI’s inquiries in order that it can better support DFID in achieving value for money and meeting its objectives.

June 2012


[1] International Development Committee, Working effectively in fragile and conflict-affected states: DRC and Rwanda (2012) and South Sudan: prospects for peace and development (2012).

[1] Andrew Mitchell, ‘International development in our national interest’ speech to Conservative Party Conference, 2 October 2011, http://www.conservatives.com/News/Speeches/2011/10/Mitchell_International_development_in_our_national_interest.aspx

[1] ICAI, The Management of UK Budget Support Operations (2012), http://icai.independent.gov.uk/wp-content/uploads/2012/05/ICAI-Budget-Support-Final-Report-32.pdf

[2] http://www.hrw.org/sites/default/files/reports/ethiopia1010webwcover.pdf

[3] Saferworld, Local views on international aid in situations of conflict and fragility (2011), b ackground paper for the International Dialogue on Peacebuilding and Statebuilding , http://www.saferworld.org.uk/Saferworld%20background%20paper%20-%20local%20views%20on%20aid%20in%20situations%20of%20conflict%20and%20fragility.pdf

Prepared 9th July 2012