Donor Policy and Accountability

1. DonorPolicyandAccountability

2. Topics Last Week • Demining • Any questions about the lectures from the last few weeks?

3. Topics • Housekeeping: • Several people asked for case studies. We will discuss two: • UNHCR Kosovo Evaluation, which is not a real case-study, but a real-life case • Mile 91 Case-Study • Advice: be on top of the literature • Potluck

4. UNHCR • Appendices and chapter on military are not required reading • Compare with literature for the whole class (Cuny, UNHCR Handbook) • prepare questions or remarks on each chapter (assign chapters to people). • UNHCR Kosovo case-study will be used in the exam

5. Donors • What do you think of the way donors set policies and provide funding? • Overview of donor-policies and trends • The Reality of Aid • Global Humanitarian Assistance 2000 • These are important reference books! If you know about financing, you can learn about power and differentiate rhetoric from reality. Think of last week’s executing modalities. • Operational Impact • Aid Chain, Practical Problems and Financial Accountability

6. Reality of Aid • 0.7 target, instead it is 0.23 • ODA is in decline. Is 1998 a statistical blip? Depends on the Asia crisis. • Multilateral share is in decline (except WB, IMF) • This reflects changes from after the Cold War • budget deficit reduction in rich countries • lesser political relevance of developing world and multilateralism • immoral, if not just short-sighted behavior • Net private capital inflows rose spectacularly, but to the happy few & volatile. So, much depends on economic climate (stock markets, economic crises)

7. Donor trends For overall development trends: • Free market is only partially implemented. No comprehensive anti-poverty approach: • globalization brings winners and losers. What about globalized rights and responsibilities • unequal access to markets reflects unequal power relationship. This also works in partnerships. • economic inequality can sustain itself (aggravation of poverty & unequal income distribution. Yet, social indicators have improved!) • US does not play a leadership role (#20)? Why? (Contrast with “there should be as much market as possible and as much state as necessary)

8. Donor trends in Activities • The agenda of meeting basic needs is making progress • Gender is increasingly integrated • Ownership, partnership, and participation are too often just nominal (some sectoral partnerships to increase capacity) • Still a great reliance on (outside) experts

9. Donor trends in overall Policy • Poverty reduction is more often rhetoric and than reality: • lack of attention to structural causes: An effective anti-poverty approach -- as opposed to and effective aid approach -- demand that poverty be addressed even in the most difficult situations, e.g., supporting local agents. Aid can be a catalyst but its role is always going to be subsidiary to the major influences on poverty, which include government policy, economic and social stability, global trade and financial conditions as well as the efforts of the people themselves

10. Donor trends in overall Policy • no strong focus on poorest countries (Kosovo instead of Africa) • integration of issues (poverty, environment, gender, human rights) without additional resources • tied aid, often focus on former colonies or countries closeby. • insufficient debt relief • insufficient access to markets (subsidies and tariffs) • continuation of arms trade • abetting corrupt regimes

11. Conclusion • Lack of overall anti-poverty approach (broader than aid) and decline in ODA in the 90’s can contribute to economic and political instability and increase insecurity. Question: why would such a broader anti-poverty approach be more effective? • Hence we ‘re back in Humanitarian Affairs

12. Trends in HA • In the 90s, H Aid got bigger part of ODA. This goes in plateaus. (Compare war budget in developed countries). Is this a good thing? Political neglect, H Aid as containment or H Aid as excuse. • In any case, at least part of the H Aid growth has been sustained.

13. Trends in HA • Differences are in the details: • Shift in H Aid from Africa to Europe does not reflect numbers of refugees and IDP. • Food and nutrition are major spending categories (some food aid is in kind) • Other sector fluctuate. Reconstruction is up (this is a form of LRD). • More H Aid is now managed by bilateral donors. As a result, management of resources has become fragmented. • Also, increase in earmarked/tied assistance

14. Trends in HA • CAP is an important instrument for fundraising and coordination. (I forgot to mention this in our coordination class. Oops!). Yet, contributions to CAP are going down. With that there is a sharp decline of funding for UNHCR and WFP. • Bilateral contribution to NGOs have increased • There has been increased attention in funding prevention, preparedness, post conflict, and rapid response facilities. Yet, donors are reluctant to fund overhead.

15. Trends in HA: The Rise of ECHO • European Commission’s Humanitarian Office has become the largest HA donor. They rarely to never execute, so they generally work through EU NGOs. • ECHO is not allowed to do development work. Does that make sense? • The text explains the functioning of cooperation with NGOs, e.g., with Framework Partnership Agreements: FPA consists of a general contract with an organization, general clasues that apply to all projects submitted by the agency, and the operational contract, which covers individual project proposals as well as reporting: (speed up!)

16. Trends in HA: The Rise of NGOs • After the Cold War “NGO triumphalism”. • Now increasing criticism, e.g., for donor dependence, fragmentation (many NGOs), lack of impact, lack of knowledge, competition with Southern NGOs. • NGOs have taken on more tasks, not just relief (as a subcontractor), but also protection & HR. • NGO response has been quality improvement effort: • Humanitarian Charter; • Sphere • Ombudsman

17. Actual problems in the field • Aid Chain: It is rarely the donor govt that executes directly, normally it goes through several org’s, that all need funding for their own activities. This reduces the actual amount of H Aid. • UNHCR for examples suffers from late and inadequate donor contributions, and as funding organization its own funding is then often late and inadequate this then reverberates down the aid chain. • Hence, it is important that you have good accounting skills: • to keep donors happy, to focus on the main tasks, to deal with excessive or difficult donor demands

18. Actual problems in the field: Bosnia (1996-2000). Donor organizations: • should be more careful and much more responsible in their assessment of NGOs (one year old NGOs with budgets larger than a million) • must extend the time-frames of their agreements, or find ways to provide longer-term assurances of funding • must make their payments on time; NGOs have no liquidity of their own; delays cause great hardship and lead to inappropriate financial management

19. Actual problems in the field: Bosnia (1996-2000) Donor organizations: • organizations supporting NGOS must pay a reasonable proportion of the NGO’s full overheads; • international NGOs, especially relief agencies, should resist the temptation to set up local NGOs that will take over their projects, unless they put in serious work & sufficient funding (capacity building takes time) • should consider ways of reducing the paper requirements of NGOs • more responsive funding over time is needed

20. Actual problems in the field: Bosnia 1996-2000 Donor organizations: • did provide too many outside experts (tied aid?) • pushed their own favorite topics (psycho-social, infrastructure, micro credit linearly). Yet, rebuilding in not linear (LRD). • Did insufficiently address local initiatives and broader awareness, legal and tax problems • After four/five the situation only improved a little. Donors were not critical of themselves, they did not use their evaluations, but were ready to move on to Kosove and Yugoslav Republic (where they are bound to repeat their mistakes).

21. Actual problems in the field: Bosnia 1996-2000 As a result, donors pushed immediate service delivery of their goals within one or two years, but did far too little on broader and longer term capacity building. Can you see this as another form of political neglect or lack of local understanding?

22. Conclusions • There is no overall anti-poverty approach. This contributes to instability. • ODA and H Aid also reflect political neglect. • Most UN organizations and NGOs are bound to cater to the needs of the donors. What about the local population? • Increasing bilateralization leads to fragmention • LRD is a problem • So, are earmarking & tying • Donor actions (or lack of) reverberate down the aid chain.