This blog is part of the series Learning from Fragility that aims to inform discussions at the upcoming Fragility Forum by exploring lessons from past support for development in fragile and conflict settings.
A decade ago, the 2011 World Development Report (WDR) on Conflict, Security and Development put forth a tripartite plan for helping countries move beyond conflict and fragility and secure development. The WDR argued that institutional legitimacy is the key to stability, that investing in citizen security, justice, and jobs is essential to reducing violence, and that to achieve these aims, international agencies must become more fit for purpose– by adjusting their procedures and by adopting longer-term approaches, with greater staying power.
Since then, a host of evaluations have assessed the adequacy of our institutions and the performance of operations in conflict situations. This blog seeks to stimulate a discussion, ahead of the Fragility Forum, about what we know, and don’t know, about what works to secure development gains in fragile and conflict-affected areas.
Are we fit for purpose?
IEG’s recent evaluation of the World Bank’s Engagement in Situations of Conflict found that the World Bank, and its shareholders, have adapted in critical ways to secure development gains in fragile, conflict-affected, and violent (FCV) contexts. The World Bank Group has launched an ambitious new FCV strategy; introduced a new methodology for classifying conflict-affected countries on its list of fragile and conflict-affected situations; updated its conflict analysis methodology and operational policies based on lessons from experience; deepened and formalized its partnerships with the UN and humanitarian agencies; and increased the availability of finance tailored to various phases of conflict and fragility.
However, the same evaluation found that while the identification and analysis of fragility factors and conflict drivers, relevant for achieving development effectiveness, have improved over time, the client-facing nature and the potentially broad distribution of conflict analyses have prevented frank assessments of fragility and conflict drivers, limiting the transmission of conflict considerations into country engagement decisions. The analyses and redress of conflict drivers have proven difficult when the root causes of conflict are overtly political. As the report recommended, there is a need to ensure that politically sensitive, confidential analysis is generated, retained, and managed so that it can be used by select future staff working in that country.
In the World Bank, investment projects in conflict-affected areas increasingly identify and address fragility factors and conflict drivers; include adaptive, design, and implementation mechanisms; and mitigate exposure risks. However, key institutional and operational issues discourage staff from engaging effectively in conflict situations. There are disincentives to effectively engaging in conflict situations that stem from disbursement pressures and higher costs of supervision (in a context of limited resources for project implementation).
At the same time, while the World Bank is often able to help reduce the negative developmental consequences of political instability by restoring critical financing and leveraging donor funding, in working with de facto governments that are also a party to conflict, to mitigate significant slippage in development gains, the World Bank has had to wrestle with reputational risks. These complex engagements– that are at the core of the FCV strategy agenda of staying engaged– should be an integral part of the discussion at the Forum.
Going beyond “business-as-usual” to support private businesses
Supporting private investment in FCV settings, as a sustainable source of growth and jobs, remains highly challenging, and effective approaches are only just emerging. IEG ‘s recent evaluation of early experiences with the Private Sector Window (PSW) launched by IDA, the World Bank’s fund for the poorest countries, found that the use of blended finance has helped to address the risks and unpredictability that typically deter private sector investment in fragile and conflict-affected countries. The PSW uses non-commercial, development funds to de-risk an investment or to limit the exposure of the World Bank Group’s private sector arms, the International Finance Corporation (IFC), and Multilateral Investment Guarantee Agency (MIGA) to project risks.
Yet, IEG’s evaluation found that the financial risk mitigation offered by the PSW addresses only one of the factors deterring private investments in fragile and conflict-affected countries. There are other, non-financial risks, such as the poor quality of the business environment and underdeveloped institutions, that often pose as big a constraint for private sector investments as financial risks. Addressing non-financial risks will require a reflection on the trade-offs involved in potential solutions. For instance, greater concessionality may be needed to overcome nonfinancial risks but this runs the risks of distorting the economic playing field and discouraging other market participants. IEG will soon disclose an evaluation that looks at how effectively IFC and MIGA have adapted to support sustainable private investment in FCV settings and to identify lessons from experience to contribute to ongoing learning and adapting.
How do we know we are doing the right things, well?
In highlighting the importance of regular monitoring and evaluation and identifying meaningful metrics to track progress in FCV settings, the report issued last year by the Special Inspector General for Afghanistan referred to the risk of ‘doing the wrong thing perfectly.’ This is the risk inherent in focusing on a narrow set of objectives, that are neither informed by conflict analysis nor linked to an overarching objective, even if perfectly aligned with best practice. In a fragile setting, this approach will not only fail to help a country exit fragility but run the real risk of exacerbating the drivers of instability.
Helping countries emerge from fragility requires a focus on complex objectives, such as creating more inclusive institutions or promoting social cohesion. These objectives can be hard to define, let alone measure, but they can be at the core of fragility. The 2011 WDR called for a focus on these higher-level outcomes, with indicators that offer a realistic picture of the progress toward them, as vital for understanding a country’s progress out of fragility. IEG’s evaluation of World Bank Engagement in Situations of Conflict found that, at the country level, results frameworks do not capture the World Bank’s contribution to conflict-related country outcomes well. This reflects the absence of both a clear conflict narrative and integration of conflict-related issues into country objectives. Few Country Partnership Framework results frameworks are adaptive and capture conflict-reduction aims; the World Bank’s reliance on quantitative metrics, attribution, and short time frames may not suit the nature of country programs in conflict-affected countries and their contribution to higher-order outcomes. Strategies for countries that have received allocations from IDA funds targeting various stages of fragility do present coherent narratives and demonstrate the possibility of frank discussions on the drivers of conflict. The Turnaround Allocation requires governments to commit to a reform agenda, developed in coordination with the World Bank and based on conflict analysis, and for the World Bank to formalize how its portfolio will support the government actively addressing the drivers of fragility.
Coherent strategies are also needed for the partnerships the World Bank has leveraged to work in areas that are usually inaccessible. Addressing the multiple facets of fragility are beyond the capacities of any single institution, and the 2020 FCV strategy commits to stepping up partnerships with humanitarian, development, peacebuilding, security, and private sector actors. A coherent strategy is needed to leverage the comparative advantage of each, as well as to ensure a shared agreement on a common goal. The timelines for challenging objectives such as rebuilding state institutions are necessarily long, but regular measuring of progress at the project, portfolio and partnership levels are needed to determine if collective actions continue to contribute to the achievement of clear and shared outcomes and to change course if needed.
Through our evaluative work, IEG seeks to cover critical aspects of the World Bank Group’s FCV strategy, to inform its implementation and promote learning on effective approaches in fragile contexts.
We invite you to join us at the 2022 Fragility Forum to revisit together the lessons learned at the session A Decade after the World Development Report (WDR) 2011: What Have We Learned?
The webinar will take place on March 7th, 9:30 AM Washington, D.C. / 2:30 PM Abidjan / 3:30 PM Brussels / 5:30 PM Nairobi. Register for the Fragility Forum here.
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