Elite Incentives and Power Dynamics in Fragile States

By Sarah Rose PRISM Vol. 8, No. 4

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Sarah Rose is a Policy Fellow at the Center for Global Development. This article draws on the report of the Center for Global Development’s working group on the future of US government development assistance to fragile states: Rose, Sarah. 2019. “Focusing on Fragility: The Future of US Assistance to Fragile States.” Center for Global Development.

Syrian refugees protest at the platform of Budapest Keleti railway station. Budapest, Hungary, Central Europe, 4 September 2015. (Mstyslav Chernov) Refugee flows from fragile states are overwhelming the capacity of destination states worldwide.
Syrian refugees protest at the platform of Budapest Keleti railway station. Budapest, Hungary, Central Europe, 4 September 2015. (Mstyslav Chernov) Refugee flows from fragile states are overwhelming the capacity of destination states worldwide.
Syrian refugees protest at the platform of Budapest Keleti railway station. Budapest, Hungary, Central Europe, 4 September 2015. (Mstyslav Chernov) Refugee flows from fragile states are overwhelming the capacity of destination states worldwide.
Syrian refugees protest at the platform of Budapest Keleti railway station. Budapest, Hungary, Central Europe, 4 September 2015. (Mstyslav Chernov) Refugee flows from fragile states are overwhelming the capacity of destination states worldwide.
Syrian refugees protest at the platform of Budapest Keleti railway station. Budapest, Hungary, Central Europe, 4 September 2015. (Mstyslav Chernov) Refugee flows from fragile states are overwhelming the capacity of destination states worldwide.
Photo By: NDU
VIRIN: 200612-D-BD104-020

By 2030, it is estimated that half of the world’s poor will be concentrated in fragile states. These are countries where the social contract between the government and its people is weak or absent—a breakdown which both creates a heightened risk of shocks from conflict, violence, pandemic illness, and/or natural disasters, and limits the country’s resilience to them. The increasing interlinkage between global development and state fragility, the potential cross-border nature of some of the risks, and the deeply mixed track record of successful international intervention to date, have prompted many donor organizations—including the United States—to reorient their policies and approaches to better support fragile states’ pathways to peace, stability, and resilience. Getting this right—or at a minimum doing no harm—is imperative. And perhaps nowhere is this more true than in the United States, which—with nearly a third of its development assistance going to fragile states—is the world’s top donor to fragile states.1

In the United States, several new initiatives and proposed reforms seek to learn from lessons of the past and address shortcomings in how the U.S. government delivers aid to confront fragility. The 2018 Stabilization Assistance Review (SAR), developed jointly by the State Department, the United States Agency for International Development (USAID), and the Department of Defense (DOD) seeks to improve how governmental actors and agencies pursue stabilization goals. USAID has begun a bureaucratic transformation process that will, in part, elevate and harmonize the agency’s prevention, stabilization, and crisis response efforts. And the State Department, in partnership with USAID, recently released the Strategic Prevention Project, an assessment of how to target aid better to reduce the risk and severity of violence.2 Congress is paying attention to fragility, too. The 2019 Global Fragility Act sets out expectations for agencies to develop a more coordinated and more strategic approach to tackle the root causes of state fragility and violence. Congress was also the driving force behind the United States Institute of Peace’s 2019 task force report on preventing extremism in fragile states.3

Central to the success of these new policies and reforms will be acting on the often recognized—but rarely systematically acted upon—principle that fragility is fundamentally a political problem. Often donors, including the United States, have sought to treat the symptoms of fragility with narrow, short-term programming. While this may relieve urgent needs or deliver quick, visible dividends, it is unlikely to produce sustained results in the absence of efforts to address the complex political dynamics at the root of the problem.

Understanding the Incentives of National Actors

Fragility is often, at least in part, rooted in intentional choices by powerful elites to maximize their own interests at the expense of others. Incumbents recognize that strengthened institutions may weaken their political power and see limited electoral reward for confronting fragility, especially where geographic or ethnic fractionalization both contribute to fragility and determine voting patterns.4 This can significantly limit what development assistance can accomplish. For predatory or exclusionary elites, the incentive of an aid package pales in comparison to the gains they stand to get from preserving the status quo—especially when aid comes with the goal of strengthening institutions or improving outcomes for groups outside of their support networks.

In some cases, the incentives donor aid can create are perverse. Fragile-state elites can be savvy about monetizing fragility, including with aid dollars, using them to entrench the coalitions that keep them in power.5 Elites also understand well that significant donor resources are sometimes made available to them because of the security risks associated with their fragility, creating an unintended (on the part of the donor) vicious cycle.6 Donors should be wary of appealing to the enlightened self-interest of leaders and officials without paying attention to the spoiler role they can play.

Unifying the U.S. Government Response

It is well understood that the United States’ ability to alter incentives and leverage change is compromised when other major sources of funding—notably China, or in some places the Gulf States—are positioned as well-resourced and willing alternatives. But the U.S. government can also work against itself in how it approaches malign elites.

Essentially, diplomatic, development, and military actors do not always uniformly agree that addressing fragility is critical for achieving their near-term objectives. Even when they do share the same broad goal of confronting fragility, the State Department, USAID, and DOD each tend to view the problems of a particular fragile state—and define a strategy for how to address them—through the lens of their own mission and mandate.7 But these visions do not always align toward the pursuit of a collective goal and may work at cross purposes with one another.8

Because of the political imperative to couch foreign aid as tied to U.S. self-interest, security objectives have often led, affecting the prioritization of other objectives that might be equally or more relevant to helping countries address fragility. Yet tolerating or supporting malign elites in pursuit of near-term objectives can end up exacerbating fragility and compromise the long-term interests of the United States.

Seeking to address the weak, predatory, and unaccountable governance that is often at the root of state fragility has not always been sufficiently elevated or integrated into U.S. strategies.9 Instead, governance tends to exist as a stand-alone policy priority, siloed within agencies, with a relatively small cadre of staff in charge of relatively limited funds supporting narrow programmatic solutions to particular governance challenges.10

Even within the segments of the interagency that do focus on governance, the sector has often gotten short shrift. For instance, until very recently, USAID’s Democracy, Human Rights, and Governance (DRG) unit sat within the Bureau of Democracy, Conflict, and Humanitarian Assistance (DCHA). Because DCHA also included USAID’s high profile, resource intensive disaster assistance and political transition/stabilization teams, DRG often ended up sidelined within its own bureau.11 USAID’s response has been to move governance to the new Bureau for Development, Democracy, and Innovation (DDI). Its new bureau-mates (economic growth, education, the Global Development Lab, among others) are probably less likely to overshadow DRG with their urgency. But DRG will become one of nine subunits, so questions about its ability to command resources and leadership attention are likely to remain. Furthermore, while the change seeks to establish a resource center for cross-cutting governance support that can better reach throughout the Agency and its missions, it also structurally removes governance from the Agency’s work on violence prevention, stabilization, countering violent extremism, and political transition—all areas where governance is central—which are all located in the new Bureau for Conflict Prevention and Stabilization. USAID acknowledges the need for strong linkages between the Bureau for Conflict Prevention and Stabilization and the governance unit within DDI. This will be critical, though what it will look like in practice remains unclear.

The State Department can also play a key role in elevating governance as part of a U.S. strategy in particular fragile states. Diplomatic engagement can provide support and legitimacy to reformers during narrow windows of opening and encourage elites to pursue a more inclusive agenda. Preventive diplomacy using mediation or other approaches can help keep disputes from escalating or limit their effect when they occur.

When done well, foreign assistance and diplomatic engagement can and should reinforce one another to influence elite incentives and support inclusive governance objectives.12 But the degree to which the two efforts are well coordinated has varied. For example, targeted diplomatic efforts combined with an increase in aid in advance of Kenya’s 2013 elections contributed to their relatively peaceful conduct.13 On the other hand, in Ethiopia—a key ally and top recipient of U.S. foreign aid—the kind of high-level diplomatic support that could reinforce the still-nascent major democratic political transition has been limited.14

At the heart of the U.S. government’s new fragility focused policies and reforms is a recognition that breakdowns in interagency alignment can be costly. The SAR and the Global Fragility Act, in particular, seek to address this by delineating roles for key agencies, with the State Department as the overall lead, USAID as the lead implementing agency for non-security assistance, and DOD as a supporting security actor (with civilian concurrence).15 The bipartisan support (in the case of the Global Fragility Act) and cross agency buy-in (in the case of the SAR) suggest that U.S. actors are serious about better alignment and will be held accountable for making progress toward that goal. But it does not promise to be easy. Addressing the question of who should lead is different from answering the question of what leadership will look like in practice. Who will have budgetary, policy, and legal leverage? When agencies disagree, how will disputes be resolved? And how can coordination surmount the challenges posed by different agency cultures, timelines, planning processes, even terminology?16

Fragility-Focused Political Economy Assessments

Even with a well-coordinated strategy, an external push for change will only succeed when it bolsters internal support.17 It is critical for donors to be able to recognize and move quickly to support key windows of opening and to understand how will and capacity are uneven across sectors, domains within sectors, and geographic space. Even within weak or kleptocratic governments, there can be islands of good governance with strong service delivery.

Donors working in fragile states often have high expectations for reforms that are not well grounded in an understanding of the political economy and the incentives of elites to pursue or block change.18 While the United States has invested significantly in understanding the political economy of several of the fragile states it engages, analysis has been less robust in others.19

An iterative, intelligence-informed examination of the political system in which a donor intervention will take (or is taking) place—including analysis of the formal and informal networks, alliances, and rent flows that support the status quo—should be central to any fragile state strategy. Fragility-focused political economy assessments are critical for understanding opportunities to engage with elites, more precisely target programs, avoid unintended consequences, and understand where aid tools are more or less likely to be effective.20

Getting these assessments right requires local knowledge from diverse and extensive local networks that go well beyond standard bilateral interlocutors. Assessments must also account for the heterogeneity of political will and legitimacy within fragile-state governments. Donors may be able to build upon and strengthen pockets of relative will and functionality—but need to understand how these fit within the broader power system. For instance, to maintain aid flows, kleptocratic governments sometimes comply selectively with donor objectives, particularly in sectors that do not threaten their power preservation structures and are more insulated from their rent-seeking behavior.21

Paktia provincial Deputy Governor Abdal Rahma Mangal, left, talks with tribal leaders in the Jani Khel district during a visit to a remote village Feb. 15, 2009. (DoD photo by Fred W. Baker III)
Paktia provincial Deputy Governor Abdal Rahma Mangal, left, talks with tribal leaders in the Jani Khel district during a visit to a remote village Feb. 15, 2009. (DoD photo by Fred W. Baker III)
Paktia provincial Deputy Governor Abdal Rahma Mangal, left, talks with tribal leaders in the Jani Khel district during a visit to a remote village Feb. 15, 2009. (DoD photo by Fred W. Baker III)
Paktia provincial Deputy Governor Abdal Rahma Mangal, left, talks with tribal leaders in the Jani Khel district during a visit to a remote village Feb. 15, 2009. (DoD photo by Fred W. Baker III)
Paktia provincial Deputy Governor Abdal Rahma Mangal, left, talks with tribal leaders in the Jani Khel district during a visit to a remote village Feb. 15, 2009. (DoD photo by Fred W. Baker III)
Photo By: Fred W. Baker III
VIRIN: 200612-D-BD104-021

Different parts of the U.S. government have always done various sorts of political economy analyses—many of very high quality—but they are rarely rolled up into one place in a way that enables all interagency actors to “sing from the same hymn sheet.” In particular, while intelligence on the corrupt, criminal, and kleptocratic elements in a fragile state is often seen as integral to setting the agenda for political and diplomatic engagement, it has not always been brought to bear in development policymaking in an intentional, systematic way, despite its relevance for aid effectiveness. Furthermore, assessments are often conducted too infrequently to maximize their utility. A single point-in-time snapshot—often undertaken at the beginning of strategy or program development—has limited value to inform a multi-year effort since it fails to account for how various developments, including the aid strategy or program itself, change the ecosystem during program implementation.22 Key political economy questions must be tracked on an ongoing basis.

Donors are increasingly aware of the need for regular, shared, multi-stakeholder, political economy assessments.23 Still, it takes time for the practice to become institutionalized and meaningfully incorporated.24 For example, USAID has good guidance on applied political economy analysis for “thinking politically,” which focuses on the very issues described above. But it also acknowledges that it is a work in progress, saying “[t]his work is not simply about a particular analytical product; perhaps more importantly, it’s also about a mindset.”25 Building a common mindset across agencies is more challenging still.

Furthermore, regular, high quality analysis is only useful if agencies can pivot easily to respond to its findings. This implies an accompanying need for more flexible, adaptable programming.26 Structuring programs for adaptive management builds in feedback loops that allow agencies and implementing partners to regularly and iteratively adjust their approaches in response to new information about program performance and/or changes in—or a better understanding of—the context in which the program is being implemented. In the less predictable, more fluid environments that characterize many fragile states, the ability to adapt programming to new (or newly understood) challenges is particularly important and is associated with better programmatic outcomes.27

Donors have recognized the importance of adaptive approaches for some time. Within the U.S. government, USAID has been advancing these ideas for years through its emphasis on collaborating, learning, and adapting (CLA). However, widespread implementation has been slow to take hold since it requires shifts in well-established bureaucratic culture, practices, and accountability processes. Low tolerance for risk and the prescriptive nature of the Agency’s traditional approach to designing projects and managing awards has slowed the uptake of adaptive management practices.

There are promising signs of a shift. The Global Fragility Act gives adaptive management new impetus calling for programs that are flexible, adaptable, and responsive to changes in local context. And USAID’s 2018 Acquisitions and Assistance Strategy promises to structure more procurements to facilitate adaptive management.28 Still, both the culture of risk aversion and time pressure on staff that contribute to a preference for “tried-and-true” tools will remain countervailing pressures.

Capitalizing on Pockets of Political Will

Where there has been a recent democratic transition or where high-level leadership is honestly seeking to address fragility, development assistance and other aspects of development policy can be powerful tools to support reformers in the face of resistance from vested interests.

Aid Conditions

Conditioning aid on policy reforms or other actions is one approach donors often use to try to drive governance, institutional, or policy change. It has a fraught history, however. Indeed, many country governments have successfully evaded outside pressure for changes while maintaining aid flows.29 Nevertheless, almost all development agencies understand that the success and sustainability of most aid-financed interventions require some degree of policy or governance contribution by the country partner.30 Where political leadership is uncommitted to a development strategy or where they place little value on cultivating or maintaining a relationship with Western donors—whether for a “stamp of approval” as a reformer, a means of accessing aid, a pathway to particular investment opportunities, or other reasons—conditions are unlikely to alter elites’ incentives, especially if unconditioned aid is available from other donors. But research suggests that where political leadership is truly committed to a development strategy, conditions can help support reform efforts in the face of resistance from domestic vested interests.31

How conditions are applied matters. Conditionality is a more effective strategy when donors are less prescriptive and more flexible and focus more on desired policy outcomes rather than the specific form the reform takes.32 Giving partner-country stakeholders leadership over the design and implementation of conditions is also important to secure buy-in.33 When conditions are seen as externally imposed or preempt local buy-in, elites that feel threatened are likely to undermine them. And since the promise of aid is unlikely to be the primary impetus for a government’s decision to pursue reform, donors must understand the internal dynamics that could reinforce—or impede—a government’s embrace of a policy condition. Observing how governments generate domestic political dividends can help donors initiate conversations about positive, mutually reinforcing conditions.

Conditions are also unhelpful—and indeed can backfire—where the withdrawal of funding for failure to meet an agreed-upon benchmark is not a credible option or threat. Donor agencies face significant bureaucratic pressure to spend planned funds, stemming either from an internal need to spend down current funds in order to defend future budget requests, and/or from other interagency actors that want to shore up certain bilateral relationships in pursuit of other (e.g., foreign policy, security) objectives. Failure to respond to a fissure in the established accountability framework, however, both undermines the impact of the aid investment and creates moral hazard for future engagements.34

Though the Millennium Challenge Corporation (MCC) invests only in relatively well-governed countries—a minority of which are considered fragile—its experience with policy conditionality can provide an illustrative example. Policy conditions are a core element in all MCC compacts. To date, MCC has not systematically collected or reported information about countries’ completion of these conditions, but anecdotal evidence suggest that they have sometimes empowered reformist elements within a government to push for difficult changes. For example, when MCC was developing a compact with Lesotho, its Basotho counterparts identified the legal status of married women—who were viewed as minors under the law—as an important impediment to the success of a program focused on private sector activity. MCC’s inclusion of a condition around this change provided the leverage that helped empower the domestic supporters of reform to push it through.35

Not all conditions have been equally effective, however, highlighting the importance of local buy-in. MCC’s compact with Mozambique contained a condition for the government to undertake reforms to improve the efficiency, transparency, and security of transferring and acquiring land rights. This was a deeply politically charged issue and the government was ultimately unwilling to tackle the major issues.36

Comparative Rankings

Cross-country indices or other benchmarking efforts that publicly rank countries’ governance or policy performance over time can be influential for some reform-minded governments and help unify support for their efforts.37 For instance, when Ellen Johnson Sirleaf was elected as Liberia’s president, she championed reforms that would improve Liberia’s standing on the International Finance Corporation’s Doing Business Index. And MCC—which only funds countries that perform relatively well on its “scorecard” of policy indicators—has spurred reform conversations (of varying degrees of seriousness) in countries seeking funding and/or the good governance “stamp of approval” MCC eligibility provides.38

But even though indicator-based assessments may play a role in shaping policies, resulting reforms often respond more to the indicator itself—or donor demands around the kinds of things the indicator measures—which may or may not address the underlying issues necessary to achieve meaningful reform. This is particularly true of governance-focused assessments. Perhaps unsurprisingly, they are not shown to be effective at persuading government leaders to address issues related to power and corruption.39

Inclusivity and Social Cohesion

In fragile states where there has been political conflict, crafting a political settlement among elites is often an important early step in placating parties to the conflict, shifting their incentives away from continuing violence, and tempering the potential spoiler role they can play. Broader than peace agreements, political settlements encompass “the formal and informal processes, agreements, and practices that help consolidate politics, rather than violence, as a means for dealing with disagreements about interests, ideas and the distribution and use of power.”40 And they are important for creating stability coming out of conflict.

But even as they are important for ending violence, political settlements are also inherently exclusionary and predatory; they do not create a foundation for lasting peace, resilience, and broad-based economic growth.41 Indeed, when exclusionary settlements turn into entrenched power dynamics, they can set the stage for a return to violence. Persistent political exclusion, especially when compounded by job scarcity and insecurity, is a central factor behind peace breakdowns.42 In Afghanistan, for example, elite bargains that attempted to “buy off” local insurgents and give regional leaders autonomy to preserve traditional power balances enabled the continuation of exclusionary practices against women and allowed criminal enterprises to thrive, which, among other factors, has undermined the potential for an inclusive, resilient state.43

Inclusive settlements, on the other hand, can ensure effective mediation of contests for resources and give space to various actors with distinct interests. They also confer legitimacy upon and restore confidence in institutions that are essential for developing a more resilient state.44 Inclusive governing coalitions are more likely to facilitate productive discussion about reforms with a broader set of stakeholders, seek to implement those changes in collaboration with them, and design policies and institutions that reflect that inclusive approach. These can all contribute toward legitimacy and stability over the longer term.45 Indeed, the presence of “inclusive enough” political settlements has been an important characteristic of states that have emerged from fragility.46

Colombia provides a good example of the failure of an exclusionary elite bargain to control violence over the long term. The political settlement reached after the civil war in the 1940s and 1950s created parties controlled by elites, with little representation of poor, rural, Afro-Caribbean, or indigenous Colombians—the majority of the population. While the agreement ended the fighting, its lack of inclusivity allowed extremists to emerge and gain power as excluded populations turned to them to help challenge the status quo. It was not until overwhelming popular demand for a constitutional referendum (in 1991) broke the narrow elite bargain and paved the way for a new, more inclusive state-society relationship that violence began to abate. While violence continued for the next two decades, it never returned to its pre-1991 levels.47 The real shift to greater inclusivity made Colombia’s peace process one of the more successful—if still somewhat fraught—accords in recent history.48

Despite their importance, however, promoting more inclusive political systems and fostering social cohesion have rarely been significant U.S. priorities.49 Often, the U.S. government’s approach has reflected a position that political settlements—and then getting to elections—matter most, rather than fully considering these steps as part of a broader and longer-term governance strengthening process.

Part of the U.S. government’s limited motivation to shift from elite deals to inclusive political processes stems from the narrow and discrete timeframes that typically govern its decisions and actions. First, there is often pressure to deliver demonstrable quick wins. Even when taking a longer-term view, concrete planning and accompanying commitments rarely extend beyond a couple of years. But progress toward fostering inclusion and building state-society relations takes a generation or more (and is rarely linear)—far longer than a budgeting or planning cycle, or even the lifespan of a single administration. It is also hard to measure, especially on quarterly or annual reporting cycle timelines, and it is difficult to attribute changes to discrete interventions. In a bureaucratic culture that emphasizes measurability as accountability, these longer-term, uneven, often-unattributable pursuits are less appealing to those keen to demonstrate results.50

Young women in a community meeting. Inclusive settlements confer legitimacy on institutions that are essential to state resilience. Aurangabad, India. World Bank (Simone D. McCourtie)
Young women in a community meeting. Inclusive settlements confer legitimacy on institutions that are essential to state resilience. Aurangabad, India. World Bank (Simone D. McCourtie)
Young women in a community meeting. Inclusive settlements confer legitimacy on institutions that are essential to state resilience. Aurangabad, India. World Bank (Simone D. McCourtie)
Young women in a community meeting. Inclusive settlements confer legitimacy on institutions that are essential to state resilience. Aurangabad, India. World Bank (Simone D. McCourtie)
Young women in a community meeting. Inclusive settlements confer legitimacy on institutions that are essential to state resilience. Aurangabad, India. World Bank (Simone D. McCourtie)
Photo By: Simone D. McCourtie
VIRIN: 200612-D-BD104-022

Channeling aid through multilateral institutions and funds can help individual donor governments pursue critical longer-term goals in a more consistent way. While bi-lateral donors often have more leeway than multilaterals to seek to directly influence elites’ incentives (the World Bank’s articles of agreement, for instance, prohibit interference in the political affairs of any member), multi-lateral donors are typically less subject to short-term changes in political priorities or shifting geostrategic needs. This allows for the longer-term, more consistent investment patterns in areas that can help foster inclusion.

But even within the U.S. government, the need for longer-term commitments to longer-term problems is increasingly recognized. The Global Fragility Act requires that the State Department lead other agencies in developing a 10-year strategy that incorporates a focus on building inclusivity. In addition, the State Department-led Strategic Prevention Project recognizes the need for more focus on inclusivity and social cohesion, and the SAR highlights the need to support broader, inclusive processes. The next step is to operationalize these recommendations; it does not promise to be easy or straightforward.

Supporting the shift from elite deals to inclusive government is a fine line for donors to walk—with little in the way of a map to guide them.51 While inclusivity is important for longer-term legitimacy and political resilience, change only happens if elites agree to it; too much external (or internal) pressure can lead to crackdowns on groups seen to be applying pressure, or even provoke a fracture that contributes to renewed violence.52

Still, there are known modalities of donor influence: Supporting and advocating for the inclusion of legitimate actors contesting political space; applying diplomatic pressure to bring elites to the negotiating table; mediating between parties; applying political and economic pressure to encourage elites to dismantle systems of exclusion; helping address perceptions of injustice by supporting inclusive service delivery; and investing in social capital—strengthening connections among like-minded communities (“bonding”), forging connections across communities with fewer shared interests (“bridging”), and connecting communities to formal institutions (“linking”).53 All of these require the type of regular political economy monitoring described above to gauge the risk of backlash and adapt—or stop—interventions as necessary.

Evaluating interventions to test theories of change is also important. While donors sometimes fund programs intended to foster social cohesion, it is not clear whether they are effective at achieving that objective. Community-driven development programs, for example—in which communities identify, implement, and maintain externally funded development projects—often carry social cohesion objectives.54 But almost across the board, they have been found to have little or no impact on this desired outcome.55

Recommendations

There is no clear set of solutions for a donor seeking to grapple better with elite incentives and power dynamics in fragile states. Predatory and exclusionary governments present intractable problems that bureaucratic solutions will not fix on their own. We have moved toward nearly universal acknowledgement that politics and power are central to the development and security trajectory of fragile states, but efforts to reorient aid tools to influence these driving forces are incomplete. The recommendations below are a partial set of ideas that reinforce and build upon recent efforts to frame a new U.S. approach to fragile states and offer practical steps that can help achieve that vision.

The White House should develop a government-wide fragile-state strategy to elevate fragility as a national policy priority. Agencies have individual fragility strategies but they are not well unified and each on its own does not sufficiently elevate fragility as a national priority. A White House-led strategy should bring together interagency actors around common principles, including how to reconcile and unify U.S. government response to democratic declines and closing civic space.

The State Department and USAID should ensure that diplomacy and foreign assistance reinforce one another in pursuit of governance objectives. Each tool is stronger in combination with the other. Diplomacy is often a prominent tool to encourage—or react to—free and fair elections, but the roots and repercussions of governance quality extend far beyond elections. The State Department should actively seek opportunities to use diplomacy to reinforce foreign assistance goals associated with institution strengthening, civil society participation, and reformist transition.

Interagency actors should conduct frequent, high quality, intelligence-informed political economy analyses that are actionable and systematically shared among agencies. Frequent, iterative political economy analyses should identify political risks, pinpoint capacities and assets for adapting to those risks, and discuss how political risks interact with economic, social, environmental, and security risks. Analyses should—either through written products or the exchange of analysts—be shared among agencies so the entire U.S. government is operating with the same set of assumptions. Analyses should also draw out key operational advice for missions or operational teams. While analyses are often helpfully descriptive, they have rarely taken the next step to describe the implications of the analysis for the actions or approaches different actors might pursue. Though the State Department would likely be well-placed to lead this effort, analyses should capitalize on the relevant expertise among different agencies, including the intelligence community.

USAID and the State Department should ensure more awards allow for adaptive management. For regular, fragility-focused political economy analysis to inform programming, implementing agencies should implement their policy commitment to manage programs more adaptively. Adaptive management also allows programs to respond to the changes in context that are common in the fluid environments of fragile states and revisit the (almost always at least partially flawed) assumptions accompanying program theories of change.

USAID should use assistance to support social cohesion objectives carefully, building on evidence of failure and adding to the body of evidence about what works. Helping societies build social capital may be a way for donors to support a transition from a closed elite political deal to more inclusive forms of governance. However, evidence suggests that many interventions with social cohesion objectives have failed to achieve them. U.S. foreign assistance investments in social capital building should be based on a keen understanding of the existing evidence and informed by political and social analyses. Social capital investments require a long-term, adaptive approach and a level of comfort with a drawn-out, nonlinear path to change.56 Investments should also be accompanied by robust evaluation to draw lessons that can be applied to future programming.

USAID should ensure strong linkages between its governance unit and the new Bureau for Conflict Prevention and Stabilization. Now that USAID’s Democracy, Rights, and Governance Office is bureaucratically divorced from the Agency’s work on fragility, violence prevention, counterterrorism, and stabilization, creating strong institutional linkages between the two units will be critical to ensure coherent, governance-focused support to missions in fragile states.

The administration should make greater use of multi-lateral systems. Less than 10 percent of U.S. foreign aid goes to multi-lateral funds and institutions. But because multilaterals are less subject than bi-lateral donors to shifts in political and geostrategic priorities, they are particularly well suited for the longer-term, more consistent investment patterns that strengthening governance and fostering inclusion require.

Congress—with support from members of the development community—should develop more realistic, longer-term expectations for assistance to fragile states. The Global Fragility Act recognizes that U.S. government efforts in fragile states have too often operated on short time frames, focusing on delivering quick and visible wins, and underprioritizing longer-term development. In asking agencies to take a long-term, 10-year strategic view, Congress allows them to focus on efforts like supporting inclusive governance, whose results may be slower to materialize but are foundational to addressing the underlying drivers of fragility. This is an important way forward, but a dose of realism is still warranted. Building institutions and social capital are generational pursuits. Though it is fair to expect headway within a decade, implementing agencies and their congressional overseers should still be wary of saddling long-term plans with even longer-term goals.

Congress will also need to shift its oversight focus. Tying accountability closely to targets risks orienting programs too much toward that which is easily measured and overlooking (or at least underreporting on) real outcomes. If Congress sees its oversight role principally as a monitor of targets and metrics, it may—perhaps inadvertently—redirect agency behavior toward meeting shorter-term (i.e., more measurable, more attributable) targets rather than focusing on longer-term goals. It should ask agencies to report more on the context around reported indicators and seek to understand the processes the State Department and USAID used for monitoring, evaluation, and learning, including how they collected local, conflict sensitive information and used it to adapt program implementation.57 PRISM

Notes

1 Rose, Sarah. 2019. “Focusing on Fragility: The Future of US Assistance to Fragile States.” Center for Global Development. https://www.cgdev.org/reader/focusing-fragility-future-us-assistance-fragile-states?page=0.

2 US Department of State. 2019. “The Strategic Prevention Project: Assessing the Role of Foreign Assistance in Preventing Violent Conflict in Fragile States.” https://www.state.gov/wp-content/uploads/2019/07/Strategic-Prevention-Project.pdf.

3 Task Force on Extremism in Fragile States. 2019. “Preventing Extremism in Fragile States: A New Approach.” United States Institute for Peace. https://www.usip.org/publications/2019/02/preventing-extremism-fragile-states-new-approach.

4 World Bank Group. 2017. “World Development Report 2017: Governance and the Law.” World Bank Group. https://www.worldbank.org/en/publication/wdr2017; Carothers, Thomas. 2002. “The End of the Transition Paradigm.” Journal of Democracy 13 (1): 5–21.

5 de Waal, 2015.

6 Task Force on Extremism in Fragile States. 2018. “Beyond the Homeland: Protecting America from Extremism in Fragile States – An Interim Report.” United States Institute of Peace. https://www.usip.org/publications/2018/09/beyond-homeland-protecting-america-extremism-fragile-states; de Waal, Alex. 2014. “The Political Marketplace: Analyzing Political Entrepreneurs and Political Bargaining with a Business Lens.” World Peace Foundation. October 17, 2014. https://sites.tufts.edu/reinventingpeace/2014/10/17/the-political-marketplace-analyzing-political-entrepreneurs-and-political-bargaining-with-a-business-lens/; de Waal, Alex. 2015. The Real Politics of the Horn of Africa: Money, War, and the Business of Power. Polity. In addition, the threat of transnational terrorism typically occupies a fairly low rank on the list of domestic security priorities, giving partner country leaders even less incentive to break that cycle (Watts, Stephen. 2015. “Identifying and Mitigating Risks in Security Sector Assistance for Africa’s Fragile States.” RAND Corporation. https://www.rand.org/content/dam/rand/pubs/research_reports/RR800/RR808/RAND_RR808.pdf).

7 Burns, Flournoy, and Lindborg, 2016; Task Force on Extremism in Fragile States, 2018.

8 Task Force on Extremism in Fragile States, 2018.

9 Chayes, Sarah. 2016. “Corruption and State Fragility.” September 2016. https://www.usip.org/sites/default/files/Fragility-Report-Policy-Brief-Corruption-and-State-Fragility.pdf; Carothers, 2002.

10 Between 2013 and 2017, 15 percent of USAID’s obligated funds went toward governance purposes (Foreign Aid Explorer).

11 The Office of Transition Initiatives and Office of Foreign Disaster Assistance are also under DCHA.

12 US Department of State, 2019.

13 US Department of State, 2019.

14 Gavin, Michelle. 2019. “U.S. Should Acknowledge Critical Challenges for Ethiopia’s Transition.” Council on Foreign Relations. June 18, 2019. https://www.cfr.org/blog/us-should-acknowledge-critical-challenges-ethiopias-transition. The last time an American president visited Ethiopia was nearly two decades ago (Devermont, Judd and Jon Temin. 2019. “Africa’s Democratic Moment? The Five Leaders Who Could Transform the Region.” Foreign Affairs 98 (4): 131-143. https://www.foreignaffairs.com/articles/africa/2019-06-11/africas-democratic-moment).

15 US Department of State, US Department of Defense, and US Agency for International Development, 2018.

16 Rose, Sarah. 2019. “A Promising US Fragile States Strategy is Taking Shape, but Key Questions Remain.” Center for Global Development. https://www.cgdev.org/blog/promising-us-fragile-states-strategy-taking-shape-key-questions-remain.

17 Burns, William, Michelle Flournoy, and Nancy Lindborg. 2016. “US Leadership and the Challenge of State Fragility.” United States Institute for Peace. https://www.usip.org/sites/default/files/US-Leadership-and-the-Challenge-of-State-Fragility.pdf; Englebert, Pierre, and Denis M. Tull. 2008. “Postconflict Reconstruction in Africa: Flawed Ideas about Failed States.” International Security 32 (4): 106–39; The Commission on Post-Conflict Reconstruction. 2003. “Play to Win: Final Report of the Bipartisan Commission on Post-Conflict Reconstruction.” Center for Strategic and International Studies. https://csis-prod.s3.amazonaws.com/s3fs-public/legacy_files/files/media/csis/pubs/
playtowin.pdf
.

18 Commission on State Fragility, Growth and Development. 2018. “Escaping the Fragility Trap.” International Growth Centre (IGC), London School of Economics and Political Science, and the University of Oxford’s Blavatnik School of Government. https://www.theigc.org/wp-content/uploads/2017/06/Escaping-the-fragility-trap_Aug-2018.pdf.

19 Commission on State Fragility, Growth and Development. 2018. “Escaping the Fragility Trap.” International Growth Centre (IGC), London School of Economics and Political Science, and the University of Oxford’s Blavatnik School of Government. https://www.theigc.org/wp-content/uploads/2017/06/Escaping-the-fragility-trap_Aug-2018.pdf.

20 Burns, Flournoy, and Lindborg, 2016.

21 Dietrich, Simone. 2011. “The Politics of Public Health Aid: Why Corrupt Governments Have Incentives to Implement Aid Effectively.” World Development 39 (1): 55–63. https://doi.org/10.1016/j.worlddev.2010.06.011.

22 Most of the fragility assessments conducted as part of the New Deal for Fragile States pilots were one-off exercises that did not contribute to sustained dialogue about resilience and the causes of fragility (Hughes, Jacob, Ted Hooley, Siafa Hage, and George Ingram. 2014. “Implementing the New Deal for Fragile States.” Brookings Institution. https://www.brookings.edu/wp-content/uploads/2014/07/global_20160811_new_deal_fragile_states.pdf).

23 World Bank Group, 2017; Cheng, Christine, Jonathan Goodhand, and Patrick Meehan. 2018. “Securing and Sustaining Elite Bargains That Reduce Violent Conflict.” UK Stabilisation Unit. https://reliefweb.int/sites/reliefweb.int/files/resources/Elite%20Bargains%20and%20Political%20Deals%20Project%20-%20Synthesis%20Paper.pdf. The EU, World Bank and others are also working to create politically smart fragility assessments but are also in early phases.

24 USAID’s Country Development and Cooperation Strategies (CDCSs) do not require political economy analyses. Just over half of the 60 CDCSs reviewed included a supplemental democracy and governance assessment. USAID’s Project Appraisal Documents require an examination of how the local system affects the problem the project seeks to address but doesn’t offer detail about what that should include.

25 Rocha Menocal, Alina, Marc Cassidy, Sarah Swift, David Jacobstein, Corinne Rothblum, and Ilona Tservil. 2018. “Thinking and Working Politically Through Applied Political Economy Analysis: A Guide for Practitioners.” Center of Excellence on Democracy, Human Rights and Governance: US Agency for International Development. https://usaidlearninglab.org/sites/default/files/resource/files/pea_guide_final.pdf.

26 World Bank Group, 2017.

27 Campbell, Susanna. 2018. Global Governance and Local Peace: Accountability and Performance in International Peacebuilding. Cambridge University Press; Honig, Dan. 2018. Navigation by Judgment: Why and When Top Down Management of Foreign Aid Doesn’t Work. Oxford University Press.

28 US Agency for International Development. 2018. “Acquisition and Assistance Strategy.” US Agency for International Development. https://www.usaid.gov/sites/default/files/documents/1868/AA-Strategy-02-04-19.pdf.

29 Englebert and Tull, 2008.

30 Selbervik, Hilde. 1999. “Aid and Conditionality: The Role of the Bilateral Donor, a Case Study of Norwegian-Tanzanian Aid Relationship.” Chr. Michelsen Institute. https://www.oecd.org/countries/tanzania/35178610.pdf; Burnside, Craig, and David Dollar. 2000. “Aid, Policies, and Growth.” The American Economic Review 90 (4): 847–68; Mosley, Paul, John Hudson, and Arjan Verschoor. 2004. “Aid, Poverty Reduction and the ‘New Conditionality.’” The Economic Journal 114 (496): 217–43.

31 Drazen, Allan. 2002. “Fiscal Rules from a Political Economy Perspective.” http://econweb.umd.edu/~drazen/PE%20of%20Fiscal%20Rules62002.pdf.

32 Commission on State Fragility, Growth and Development, 2018; Andrews, Matthew, Lant Pritchett, and Michael Woolcock. 2012. “Escaping Capability Traps through Problem Driven Iterative Adaptation (PDIA).” CID Working Paper No. 240. Harvard University. https://bsc.cid.harvard.edu/publications/escaping-capability-traps-through-problem-driven-iterative-adaptation-pdia-0.

33 International Monetary Fund. 2012. “2011 Review of Conditionality: Overview Paper.” International Monetary Fund. https://www.imf.org/external/np/pp/eng/2012/061912a.pdf; Branson, William, and Nagy Hanna. 2000. “Ownership and Conditionality.” Working Paper 21014. World Bank Group. http://documents.worldbank.org/curated/en/100021468761961752/Ownership-and-conditionality; Koeberle, Stefan, Harold Bedoya, Peter Silarky, and Gero Verheyen. 2005. “Conditionality Revisited: Concepts, Experiences, and Lessons.” 32524. World Bank Group. http://documents.worldbank.org/curated/en/524471468320048931/Conditionality-revisited-concepts-experiences-and-lessons; Collier, Paul. 2016. “Fragile States and International Support.” 175. Development Policies. FERDI. http://www.ferdi.fr/sites/www.ferdi.fr/files/publication/fichiers/p175-_ferdi-_paul_collier.pdf.

34 Mandaville, Alicia Phillips. 2016. “Applying the Compact Model of Economic Assistance to Fragile States.” United States Institute for Peace. November 2016. https://www.usip.org/sites/default/files/Fragility-Report-Policy-Brief-Applying-Compact-Model-of-Economic-Assistance-in-Fragile-States_0.pdf.

35 Seitz, Virginia. 2010. “A Giant Step Toward Gender Equality in Lesotho.” Millennium Challenge Corporation. https://www.mcc.gov/blog/entry/gender_equality_in_lesotho-2.

36 Lack of clarity around the design of the condition also contributed to this outcome. Rose, Sarah and Franck Wiebe. 2015. “Focus on Country Ownership: MCC’s Model in Practice.” Center for Global Development. https://www.cgdev.org/publication/focus-country-ownership-mccs-model-practice.

37 Parks, Bradley, Zachary Rice, and Samantha Custer. 2015. “The Marketplace of Ideas for Policy Change: Who Do Developing World Leaders Listen to and Why?” Williamsburg, Virginia: AidData at William and Mary. https://www.aiddata.org/publications/the-marketplace-of-ideas-for-policy-change-who-do-developing-world-leaders-listen-to-and-why.

38 Rose, Sarah. 2015. “A Dive Into New Data on ‘the MCC Effect.’” Center for Global Development. https://www.cgdev.org/blog/dive-new-data-mcc-effect.

39 Parks, Rice, and Custer, 2015.

40 Laws, Edward and Adrian Leftwich. 2014. “Political Settlements.” Concept Brief 1. Developmental Leadership Program. pp. 1. https://www.dlprog.org/publications/research-papers/political-settlements.

41 Cheng, Goodhand, and Meehan, 2018; Hadley, Stephen, and Rachel Kleinfeld. 2016. “Fostering a State-Society Compact.” United States Institute for Peace. November 2016. https://www.usip.org/sites/default/files/Fragility-Report-Policy-Brief-Fostering-a-State-Society-Compact.pdf; World Bank Group. 2011. “World Development Report 2011: Conflict, Security and Development.” World Bank Group. https://openknowledge.worldbank.org/handle/10986/4389.

42 Task Force on Extremism in Fragile States, 2018; Jones, Bruce, Mary Elgin-Cossart, and Jane Esberg. 2012. “Pathways out of Fragility - The Case for a Research Agenda on Inclusive Political Settlements in Fragile States.” UK Department for International Development. https://assets.publishing.service.gov.uk/media/57a08a6340f0b652dd0006ea/60937-PoliticalSettlements_Theory_FINAL.pdf; Gurr, Ted Robert, Mark Woodward, and Monty G. Marshall. 2015. “Forecasting Instability: Are Ethnic Wars and Muslim Countries Different?” Political Instability Task Force. https://pdfs.semanticscholar.org/e335/b9a025166e0815bce5719ab69ef8ec1ec32a.pdf.

43 Kleinfeld, Rachel, and Harry Bader. 2014. “Extreme Violence and the Rule of Law: Lessons from Eastern Afghanistan.” Carnegie Endowment for International Peace. https://carnegieendowment.org/files/violence_rule_of_law.pdf.

44 World Bank Group, 2011.

45 Task Force on Extremism in Fragile States, 2018; Babbitt, Eileen F., Ian Johnstone, and Dyan Mazurana. 2016. “Building Legitimacy in Conflict-Affected and Fragile States.” Institute for Human Security: Fletcher School of Law and Diplomacy. https://sites.tufts.edu/ihs/300-2/; Jones, Elgin-Cossart, and Esberg, 2012; World Bank Group, 2011.

46 World Bank Group, 2011. In addition, in post-colonial Sub Saharan Africa exclusionary elite bargains were associated with a trajectory toward civil war, while more inclusive agreements fostered more political stability (Lindemann, Stefan. 2008. “Do Inclusive Elite Bargains Matter? A Research Framework for Understanding the Causes of Civil War in Sub-Saharan Africa.” Development Studies Institute: London School of Economics and Political Science. http://www.lse.ac.uk/international-development/Assets/Documents/PDFs/csrc-discussion-papers/dp15-Do-Inclusive-Elite-Bargains-Matter.pdf).

47 Hadley and Kleinfeld, 2016.

48 Still, the 2016 Colombia peace deal has not been executed without challenges (Serrano, Francisco. 2019. “Colombia’s Uneasy Peace.” Foreign Policy, July 16, 2019. https://foreignpolicy.com/2019/07/16/colombias-uneasy-peace/).

49 US Department of State, 2019.

50 Natsios, Andrew. 2010. “The Clash of the Counter-Bureaucracy and Development.” Center for Global Development. https://www.cgdev.org/sites/default/files/1424271_file_Natsios_Counterbureaucracy.pdf.

51 Blum, Andrew. 2016. “Addressing Fragility: A New Learning Agenda.” United States Institute for Peace. October 2016. https://www.usip.org/sites/default/files/Fragility-Report-Policy-Brief-Addressing-Fragility-A-New-Learning-Agenda_1.pdf; Jones, Elgin-Cossart, and Esberg, 2012.

52 Cheng, Goodhead, and Meehan, 2018; World Bank Group, 2017.

53 Jones, Elgin-Cossart, and Esberg, 2012; Marc, Alexandre, Alys Willman, Ghazia Aslam, Michelle Rebosio, and Kanishka Balasuriya. 2013. “Societal Dynamics and Fragility: Engaging Societies in Responding to Fragile Situations.” World Bank Social Development Strategy. The World Bank. https://openknowledge.worldbank.org/bitstream/handle/10986/12222/NonAsciiFileName0.pdf?sequence=1&isAllowed=y; Van Metre, Lauren and Linda Bishai. 2019. “Why Violent Extremism Still Spreads.” Just Security. https://www.justsecurity.org/63169/violent-extremism-spreads/; Cooley, Larry, and Jonathan Papoulidis. 2018. “Tipping the Scales: Shifting from Projects to Scalable Solutions in Fragile States.” Society for International Development, March.

54 For example, in 2018, USAID/Ukraine issued a request for proposal to implement a community-driven development project with the goals of creating greater acceptance of shared culture and increasing participation to improve governance and resolve community problems (USAID/Ukraine. 2018. “Request for Proposal: USAID Democracy Governance East Activity.” US Agency for International Development).

55 International Initiative for Impact Evaluation. 2018. “Does Community-Driven Development Build Social Cohesion or Infrastructure?” International Initiative for Impact Evaluation. http://www.3ieimpact.org/sites/default/files/2018-08/CDD-brief-wp30_0.pdf; Mansuri, Ghazala and Vijayendra Rao. 2013. “Localizing Development: Does Participation Work?” World Bank Group. https://openknowledge.worldbank.org/bitstream/handle/10986/11859/9780821382561.pdf?sequence=1&isAllowed=y. The International Initiative for Impact Evaluation paper received some criticism, but the authors stand behind their social cohesion conclusions. See: Oxfam. 2018. “A Bombshell Evaluation of Community Driven Development.” Oxfam. June 2018. https://oxfamblogs.org/fp2p/a-bombshell-evaluation-of-community-driven-development/; Menon, Radhika and Howard White. 2018. “Moving the Debate Forward on Community Driven Development.” International Initiative for Impact Evaluation. https://www.3ieimpact.org/blogs/moving-debate-forward-community-driven-development.

56 Mansuri and Rao, 2013.

57 Campbell, Susanna, Dan Honig, and Sarah Rose. 2020. “Creating an Accountability Framework that Serves the Global Fragility Act’s Mission.” Center for Global Development. https://www.cgdev.org/publication/creating-accountability-framework-serves-global-fragility-acts-mission.