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8/8/2019 No Development without Security: The Transatlantic Donor Community Needs to Redesign Aid for Fragile States
1/28
NO DEVELOPMENT WITHOUT SECURITYTHE TRANSATLANTIC DONOR COMMUNITY
NEEDS TO REDESIGN AID FOR FRAGILE STATES
JONATHAN M. WHITE
THE GERMAN MARSHALL FUND OF THE UNITED STATES
PAPER SERIES
8/8/2019 No Development without Security: The Transatlantic Donor Community Needs to Redesign Aid for Fragile States
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2009 Te German Marshall Fund o the United States. All rights reserved.
No part o this publication may be reproduced or transmitted in any orm or by any means without permission
in writing rom the German Marshall Fund o the United States (GMF). Please direct inquiries to:
Te German Marshall Fund o the United States
1744 R Street, NW
Washington, DC 20009
1 202 683 2650
F 1 202 265 1662
Tis publication can be downloaded or ree at http://www.gmus.org/publications/index.cm. Limited print
copies are also available. o request a copy, send an e-mail to [email protected].
GMF Paper Series
Te GMF Paper Series presents research on a variety o transatlantic topics by staf, ellows, and partners o the
German Marshall Fund o the United States. Te views expressed here are those o the author and do not neces-
sarily represent the view o GMF. Comments rom readers are welcome; reply to the mailing address above or by
e-mail to [email protected].
About GMF
Te German Marshall Fund o the United States (GMF) is a non-partisan American public policy and grant-
making institution dedicated to promoting greater cooperation and understanding between North America
and Europe.
GMF does this by supporting individuals and institutions working on transatlantic issues, by convening leaders
to discuss the most pressing transatlantic themes, and by examining ways in which transatlantic cooperation canaddress a variety o global policy challenges. In addition, GMF supports a number o initiatives to strengthen
democracies.
Founded in 1972 through a gi rom Germany as a permanent memorial to Marshall Plan assistance, GMF
maintains a strong presence on both sides o the Atlantic. In addition to its headquarters in Washington, DC,
GMF has seven o ces in Europe: Berlin, Bratislava, Paris, Brussels, Belgrade, Ankara, and Bucharest.
About Brussels Forum
Brussels Forum is an annual high-level meeting o the most inuential American and European political, corpo-
rate, and intellectual leaders to address pressing challenges currently acing both sides o the Atlantic. Partici-
pants include heads o state, senior o cials rom the European Union institutions and the member states, U.S.Cabinet o cials, Congressional representatives, Parliamentarians, academics, and media. For more inormation,
please visit www.brusselsorum.org.
8/8/2019 No Development without Security: The Transatlantic Donor Community Needs to Redesign Aid for Fragile States
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No Development without Security
The transatlantic donor community needs to redesign aid for fragile states
Brussels Forum Paper Series
March 2009
J M. W*
T G M F U S
I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
F F F S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
F Gbz F S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
F P C F S . . . . . . . . . . . . . . . . . . . . . . . . . . 16
R D F S . . . . . . . . . . . . . . . . . . . . . . . . . 18
C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Ax: F S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
* J M. W G M F U S. H k GMF , , .
8/8/2019 No Development without Security: The Transatlantic Donor Community Needs to Redesign Aid for Fragile States
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No Development without SecurityThe transatlantic donor community needs to redesign aid for fragile states
3
Throughout the
1990s, despite
aid, diplomatic
initiatives, and
even military
intervention,
these efforts
have largely been
unable to reverse
the cycle of
political instabilit
poor governance
low growth,
severe poverty,
and conflict in
certain states.
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1 ://..
Introduction
1
8/8/2019 No Development without Security: The Transatlantic Donor Community Needs to Redesign Aid for Fragile States
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The German Marshall Fund of the United States4
Limited policy
focus on and
investments in
fragile states have
compounded
the problem by
narrowing the
scope of practice
and instruments
available to
help them.
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P C, The Bottom Billion: Why the Poorest CountriesAre Failing and What Can be Done About It, (Ox: OxU P, 7).
8/8/2019 No Development without Security: The Transatlantic Donor Community Needs to Redesign Aid for Fragile States
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No Development without SecurityThe transatlantic donor community needs to redesign aid for fragile states
5
Only five countrie
accounted for
more than half
of total ODA to
fragile states
between 2000
and 2007.
Failing to Fund Fragile States
2W , z
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3 OECD, Concepts and Dilemmas of State Building in Fragile Situ-ations: From Fragility to Resilience, OECD 8.
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4 OECD,Aid Targets Slipping Out of Reach?, OECD 8.5 T 38 : A, A, B,Cb, C, C A R., C, C,C, D. R., C, R., C I, Djb, E,Gb, G, G-B, H, Kb, L, Lb,M, M, N, N, P N G, ST & P, S L, S I, S, S-, Tjk, T-L, T, T, Uzbk, V,Y, Zbb.
8/8/2019 No Development without Security: The Transatlantic Donor Community Needs to Redesign Aid for Fragile States
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The German Marshall Fund of the United States6
Although there is
a high probability
of an eruption
of violence, thus
imposing costs on
the country itself,
the region and
the world, these
countries gain
little attention.
(C ).
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any
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ce
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ngdom
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ay
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alia
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ark
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and
Irela
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and
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$2.6
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$0.5
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Chart 1: DAC Members Net Official Development Assistance in 2007
Source: Organisation for Economic Co-operation and Development
Billions
8/8/2019 No Development without Security: The Transatlantic Donor Community Needs to Redesign Aid for Fragile States
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No Development without SecurityThe transatlantic donor community needs to redesign aid for fragile states
7
b b
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6 C B D D, A, P, G,American Economic Review (): 847-68.
2000
2001
2002
2003
2004
2005
2006
2007
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
Constant2006USDB
illions
Chart 2: Net ODA Disbursement from all donors to Fragile States
Source: Organisation for Economic Co-operation and Development
Total net ODA
excluding debt relief grants
Total net ODA
Rest ofFragile States
Nigeria
Congo,
Dem. Rep.
Afghanistan
Cameroon
Sudan
Chart 3: Shares of Net ODA toFragile States 20002007 (percentage)
Source: Organisation for
Economic Co-operation and Development
39%
7%7%
11%
14%
22%
8/8/2019 No Development without Security: The Transatlantic Donor Community Needs to Redesign Aid for Fragile States
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The German Marshall Fund of the United States8
Fragile states
are largely
underserved and
this represents
a massive
opportunity cost
from failing to lift
millions of people
out of poverty,
raise incomes,
and strengthen
global security.
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1 V L D D, T F S: AV V D P C(1992-2002), OECD, 5. S DAC L A P D P.
11 Mk MG, A A F S,Bk S L F DE F S, J 13-14, 5.
8/8/2019 No Development without Security: The Transatlantic Donor Community Needs to Redesign Aid for Fragile States
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No Development without SecurityThe transatlantic donor community needs to redesign aid for fragile states
9
Risk-aversion,
budget pressures
and a reluctance
to make the
labor-intensive
investments
commensurate
with the challeng
posed by
fragile states,
all discourage
engagement
with them.
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13 E B, The World Bank in Fragile State and Conflict-Affected Countries: How, Not How Much, (L: IA, 8).
8/8/2019 No Development without Security: The Transatlantic Donor Community Needs to Redesign Aid for Fragile States
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The German Marshall Fund of the United States10
While countries
like China, India,
and most other
developing
countries are
converging
with developed
economies,
fragile states
have slipped
off the radar.
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15 UNCTAD, Economic Development in Africa 2008, UNCTAD,8.
Failing to Globalize Fragile States
3
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No Development without SecurityThe transatlantic donor community needs to redesign aid for fragile states
11
The new global
divide will not
be between the
West and the res
but between the
extreme poor an
everyone else.
$7,754
$6,017
$180
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
Rest of Developing World
Fragile States
Developed Economies
BillionsUSD
Chart 5: Total Merchandise Trade Exports
Source: World Trade Organization (excludes Somalia and Timor-Leste)
$1,248
$566
$20
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
BillionsUSD
Chart 4: Foreign Direct Investment Inflows
Source: United Nations Conference on Trade and Development
Rest of Developing World
Fragile States
Developed Economies
8/8/2019 No Development without Security: The Transatlantic Donor Community Needs to Redesign Aid for Fragile States
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The German Marshall Fund of the United States12
Fragile states
will not be able
to mimic the
development
strategies that
South Korea,
Singapore, China,
and India chose.
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16 E J S S R, The Good News Outof Africa: Democracy, Stability, and the Renewal of Growth andDevelopment, C Gb D, Fb 8.
17 P C, The Bottom Billion: Why the Poorest CountriesAre Failing and What Can be Done About It, (Ox: OxU P, 7).
18 W T Oz.
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No Development without SecurityThe transatlantic donor community needs to redesign aid for fragile states
13
Aid shocks
in developing
countries
have triggered
disruptions
equivalent to
the magnitude
of the income
shocks endured
by developed
countries during
the two World
Wars, the Great
Depression, and
the Spanish
Civil War.
. S j
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1 Mk MG S F,Aid and Growth in FragileStates, UNU-WIDER, J 8; P C, The BottomBillion: Why the Poorest Countries Are Failing and What Can beDone About It, (Ox: Ox U P, 7). T b - b k b ; W E, P C, J S.
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H K, M C A V, W- C D, Wk P 3, BkI, 8.
1 R G. Rj A Sb, W U- A I G? I M F,Wk P, J 5.
8/8/2019 No Development without Security: The Transatlantic Donor Community Needs to Redesign Aid for Fragile States
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The German Marshall Fund of the United States14
The ideas of
the post-World
War II reformers,
who had been
influenced by John
Maynard Keynes
and recognized
the central role
of the state in
development,
faded with the rise
of neoliberalism.
T k-- b . F - b k
k b .
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z,
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Effectiveness
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8/8/2019 No Development without Security: The Transatlantic Donor Community Needs to Redesign Aid for Fragile States
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No Development without SecurityThe transatlantic donor community needs to redesign aid for fragile states
15
The inability
to think more
broadly in terms
of development
policy across the
entire governmen
spectrum has
severely hindere
the ability of
fragile states to
participate in the
global economy.
k U.S. A G O A(AGOA), U.S.
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b
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b
b .
4 N B, The White House and the World: A GlobalDevelopment Agenda for the Next U.S. President, (W,DC: C Gb D, 8).
5 Ib.
6 OECD,Agricultural Policies in OECD Countries 2008: At aGlance, OECD, J 8.
7 USAID Gb D A b- , b k, , x . N, U.S. b U.S. .
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OECD, 15
ODA .
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8/8/2019 No Development without Security: The Transatlantic Donor Community Needs to Redesign Aid for Fragile States
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The German Marshall Fund of the United States16
Sometimes
aid may foster
economic growth
while undermining
security by
empowering
certain ethnic
groups,
disenfranchising
others, and
disrupting social
relations.
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S B, , The Paradoxes of Peacebuilding Post 9/11T N S I, (V: UBC P, 8).
Failing to Prevent Conflict
in Fragile States4
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No Development without SecurityThe transatlantic donor community needs to redesign aid for fragile states
17
Donors have a
long way to go
to formulate
aid policies that
are informed by
in-depth, country
specific research
that incorporates
the variables
associated
with conflict.
,
. A,
.
A -b
b ,
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U.K. D I D
(DFID) b
b
x.
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W Bk ,
b b
k
k .31
3 E B, The World Bank in Fragile State and Conflict-Affected Countries: How, Not How Much, (L: IA, 8).
31 Skk Fk-P Rb P, C P- : J j JICA UNDPA , Bk W PkP k C P DC A, Nb 7.
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The German Marshall Fund of the United States18
Frontier
donors are
recalibrating aid
instruments with
an appreciation
for the central
roles of the
state and good
governance.
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Paris Declaration on Aid Effectiveness.
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Redesigning Development
for Fragile States5
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No Development without SecurityThe transatlantic donor community needs to redesign aid for fragile states
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The Principles for Good International Engagement in Fragile Statesrecognize that:
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The German Marshall Fund of the United States20
Elections can be
a vital tool for
enhancing the
legitimacy of a
new government,
but they can
be hollow in
the absence
of capable
civil servants
both nationally
and locally.
, .
Develop the capacity of institutions
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34 USAID, Fragile States Strategy, USAID (W, DC:USAID, 5).
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37 JCMB U N , I FI, , , NGO A.
38 C Rk D C F, USAID A- H F, Kb, A A 1, 8.
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No Development without SecurityThe transatlantic donor community needs to redesign aid for fragile states
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A meaningful
consultative
process
recognizes the
importance of
local checks and
balances and
ensures that
MCC programs
strengthen local
institutions and
civil society, and
doing so mitigate
the risk of conflic
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The German Marshall Fund of the United States22
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z
q . T
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48 DFID, Why we need to work more effectively in fragile states. U.K.D I D (L: DFID 5).
DFID has been
developing a
deep knowledge
around engaging
fragile states and
has been refining
a number of
analytical tools
to strength the
organizations
expertise in
this area.
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No Development without SecurityThe transatlantic donor community needs to redesign aid for fragile states
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Among the 80
countries eligible
for World Bank
IDA funds, about
half of them eith
suffer from or ar
prone to conflict.
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(IDA) b
Db 7,
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The World Bank Groups financialsupport going to fragile states:
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$13
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b
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$13.4 b NPV .
S: The World Bank in Fragile Situations:
An Issues Paper.
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The German Marshall Fund of the United States24
The amount of
investments, social
analysis, and
conflict-sensitive
planning currently
committed are not
commensurate
with the obvious
threat fragile
states pose.
Conclusion
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No Development without SecurityThe transatlantic donor community needs to redesign aid for fragile states
25
Given the limited
knowledge about
and low level of
investments in
fragile states,
transatlantic
learning will
be vital to
helping improve
development
practice.
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The German Marshall Fund of the United States26
Appendix: Fragile States
7WB LICUS
(2006)Failed States Index
(2008)OECD(2007)
Difcult PartnershipCountries (2002)
A A A A
A B A A
B B B B
Cb C Cb Cb
C A R. C A R. C C
C C C A R. C A R.
C, D. R. C, D. R. C C
C, R. C, R. C C
C I C I C, D. R. C, D. R.
E E C, R. C, R.G G C I G
G-B G-B Djb G-B
H H E H
K () Iq Gb L
L PDR K G Lb
Lb Lb G-B M (B)
M (B) Lb H N
N M Kb N
S I M (B) L P N G
S N Lb S T P
S N M S LT-L N M (B) S I
T N K N S
V Pk N S
W Bk Gz S L P N G Tjk
Zbb S I S T P T
S S L Uzbk
S Lk S I Y
S S Zbb
S S
T-L Tjk
U T-L
Uzbk T
Y T
Zbb Uzbk
V
Y
Zbb
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O F F I C E S
Washington Berlin Bratislava ParisB B A B