Implementing Ownership in Fragile and Least Developed Countries: Could it be done from the outside?

November 1, 2015
Implementing Ownership in Fragile and Least Developed Countries: Could it be done from the outside?
Soraya Sidani
Soraya Sidani Non-Resident Fellow - International Security & Development

Since 2000, aid effectiveness agenda has become a high priority among donors. In this context, OECD organized a series of high-level fora, which have provided the setting for a number of key declarations and agreements on aid effectivness. Among them, the Paris Declaration on Aid Effectiveness, endorsed in 2005 by hundreds of donor agencies and recipient governments, laid out a roadmap to improve the quality of aid and its impact on development. It stressed in particular the role of ownership as the key pillar of the aid paradigm, shifting it away from external conditionality. Following this ownership principle, recipient countries exercise effective leadership over their development policies, and strategies and co-ordinate development actions.

This principle was reaffirmed in 2011 at the Fourth High Level Forum on Aid Effectiveness in Busan, South Korea, as main guiding principle for aid effectiveness in developing states but also in fragile states, through the New Deal for Engagement in Fragile States which provides a fresh framework based on country-owned and led initiatives to address issues of peace-building, state-building, and development, and improved coordination with donors in support of those initiatives.

However, the implementation of this ownership principle faces many challenges in fragile states and non-fragile recipient countries, in particular in Sub-Saharan Africa. The first challenge is related to the inherent contradiction between the economic dependence of recipient countries and their ability to take the lead and to define the terms of donors’ engagement[1]. The lack of, or weakness in capacities in many fragile states undermine the ability of national governments to determine their own development strategy and to guide negotiations, which leads, as a consequence to the increasing role of donors in these recipient countries.

Secondly, the good practices of international financial institutions (in particular the World Bank’s good governance practices) have had an important effect on recipient governments inducing them to conform to those practices in order to maximize the flow of aid – setting then a clear limit to the capacity of local governments to establish their own priorities and to exercise effective control of the reforms advocated[2].

Ownership, which can be defined as “a control over the process and outcome of choosing policies”,[3] requires the mobilization of human resources and local technical expertise able to take the lead in the aid relationship, to define the development agenda, and to implement it. For fragile states[4] this situation is hardly achievable since recipient governments often lack the capacity to conduct such policies. The capacity building programs recently developed and promoted by donors is seen to overcome those weaknesses and to reinforce local capacities. However, the use of external expertise to support the capacity building program has often resulted in increasing entanglement of donor institutions and recipient governments, slowing down the ownership process. The Somali experience in recent years illustrates this paradox trough the setting of the Somali Compact.

The Somali Compact adopted at the Brussels Conference in September 2014 and based on the Busan New Deal principles, has been considered as a milestone of this new development architecture. It is a comprehensive framework, initiated by the Federal Government of Somalia, which establishes the priorities for Somalia over a three year period (2014-2016) in the fields of politics, security and justice, and outlines the economic foundation, revenue and services required in order to move towards peace and recovery. It represents a real roadmap with key milestones in each sector. The drawing up process of this document involved however expert advisors from the European Union (EU). The capacity of the Somali government to undertake such a policy agenda was indeed challenged by its limited capacities – in terms of indigenous technical expertise due to the emigration of the local elite class during the enduring conflict. The support of the EU was therefore necessary for the emergence of the New Deal Compact, but that came with two main consequences.

First, it involves several reforms upon which the Somali government does not have effective control (although the Somali administration takes the responsibility for it), in particular in the justice and economic fields. The reform of the judiciary sector and its reorganization through international standards, for instance, requires the support of international experts and consultants in the medium and long term since the implementation of those standards presupposes prior knowledge of them and the training of judges according to these norms.

Second, as a result, the elites of the fragile states will tend to rely on international experts financed by donor institutions to implement policies they cannot operate on their own. However, the establishment of ad hoc units designed to build local capacities have not always produced the expected outcomes. It has in practice decreased the empowerment process. According to some researchers, it is often seen by many African countries as a way for donors to maintain control of reforms and to keep an eye on the budget spending[5].

In addition, international experience has proved that even when the transfer of capacities is complete, it is a hard task to retain talent in the public sector due to the negative incentives at the individual level in local administration[6]. In fact, civil servants, once trained, are keener to join the private sector or to work for international organizations that offer better salaries. All these elements lead to a slowing down of the ownership process in fragile states.

Even in non-fragile situations, it appears that the promotion of the ownership principle has not changed the relationship between donors and recipient states, especially within the least developed countries. Although the ownership principle remains a prerequisite for the attribution of aid, its implementation is challenged by the internal good practices of international organizations[7] such as the World Bank, leaving recipient governments with no sufficient room to determine their own set of policies to achieve their priorities.

In the context of limitation of resources, international financial institutions have developed a more selective approach towards aid based on the quality of governance of recipient states. The Country Policy and Institutional Assessment (CPIA), drawn up by the World Bank, evaluates the quality of a country’s policy and institutional framework, enabling it to determine whether its institutions foster an effective use of development assistance and promote economic growth and poverty reduction. It contains a set of criteria grouped into four clusters: economic management, structural policies, policies for social inclusion and equity, and public sector management and institutions. This assessment tool defines the good practices necessary in each different cluster in order to efficiently manage aid assistance[8]. The CPIA ratings are then used in the International Development Association (IDA – the World Bank’s fund for the poorest countries) allocation process. In this perspective, it becomes essential for IDA eligible countries, in particular the least developed countries, to adopt and implement these good governance practices to secure an access to financial assistance.

Yet, for sub-Saharan IDA eligible countries, not only has the importation of these governance good practices encountered a number of economic, social, institutional and temporal obstacles, creating resistance of many elites to implement them[9], but it has also hampered the will and the aptitude of those countries to set up their own development agenda (all their capacities being mobilized towards the reforms promoted by the donors). More interestingly, it has negatively impacted the governance of half of those recipient countries[10]. For the countries unable to implement those reforms, the limitation of aid flow results in marginalization at the international level. The most vulnerable countries in this perspective remain: Guinea, Comoro, Republic of Congo, Eritrea, Guinea-Bissau, Chad and Zimbabwe.

In short, although originally designed for the World Bank internal use, these good practices have had an impact on recipient states. They have undermined many countries’ own capacity to take the initiative and have decreased their strength in negotiation with traditional donors.

To conclude, ten years after the Paris Declaration, the implementation of the ownership principle remains clearly limited in practice. One of the most significant lessons provided by international experience is that ownership cannot be driven from the outside. That said, the most urgent question lies in the ways to overcome the ownership-capacity building dilemma. In fact, if capacity building remains an important priority for fragile states, it will be crucial to limit the incidence of entanglement of donor institutions and recipient governments. In addition, maintaining local talent in the public sector will require more government-led incentives at the organizational level to reinforce the public service. Tanzania is this regard could be a valuable example for other African countries.

Lastly, the emergence of alternative sources of aid in recent years, in particular from rising states such as China[11] and the countries of the Gulf Cooperation Council (GCC) provides recipient countries with new opportunities to finance their development agendas, moving away from the conditionality of traditional donors, and offering them different models of development.

[1]Lindsay Whitfiled, The politics of Aid, Oxford, Oxford University Press, 2008, p 17.

[2] Soraya Sidani, “Bonnes Pratiques de la Gouvernance, Resistance et Deviance” (“Good Governance Practices, Resistance and Deviance in Sub-Saharan Africa)” in Klein Asmara, Laporte Camille and Saiget Marie, Les bonnes pratiques des Organisations Internationales, Paris, Presses de Sciences Po, 2015.

[3] Lindsay Whitfiled, op. cit, p 3.

[4] According to the World Bank, Fragile States have: either a) a harmonized average CPIA country rating of 3.2 or less, or b) the presence of a UN and/or regional peace-keeping or peace-building mission during the past three years.

[5] Isaline Bergamashi, “Mali: Patterns and Limits of Donor-Driven Ownership”, in Lindsay Whitfiled, The politics of Aid, op. cit.

[6] OCDE, “The challenge of capacity building development: working towards good practice”, Paris, OECD 2006.

[7] For a definition of IOs good practices, see Klein Asmara, Laporte Camille and Saiget Marie, op.cit.

[8] It concerns the concrete measures to be taken in the following areas: monetary and exchange rate policies, fiscal policy, debt policy and management, trade, financial sector, business regulatory environment, policies for social inclusion, gender equality, equity of public resource use, building human resources, social protection and labor, policies and institutions for environmental sustainability, property rights and rule-based governance, quality of budgetary and financial management, efficiency of revenue mobilization, quality of public administration, transparency, accountability, and corruption in the public sector.

[9] Soraya Sidani, “Good Governance Practices, Resistance and Deviance in Sub-Saharan Africa” in Klein Asmara, Laporte Camille and Saiget Marie, op.cit

[10] Ibid.

[11] Camille Laporte, « Les émergents face aux bonnes pratiques des organisations internationales »,  in Klein Asmara, Laporte Camille and Saiget Marie, op.cit