How Rajiv Shah Can Buck the System: 5 Tips from the Frontlines of Conflict and Development

02/21/2011 08:50 am ET | Updated May 25, 2011

With fragile states increasingly constituting first-tier US foreign policy priorities and global development funding being targeted by budget hawks in Congress, USAID Administrator Rajiv Shah is making the case for his agency's relevance in the 21st century. Quoting Defense Secretary Gates' observation that "development is a lot cheaper than sending soldiers", Administrator Shah argued that USAID's work serves to stabilize countries in crisis while also helping to prevent conflict from arising in the first place. He insists, however, that his agency must improve its ability to "increase short-term stability, while easing the transition between conflict, fragile peace and long-term development."

Mercy Corps has long worked fragile and transitional states -- places like Afghanistan, Sudan, Pakistan, Somalia, and Iraq. We have seen firsthand that when development aid is done right, it can be a highly effective tool for bringing peace and prosperity to deeply troubled societies: fostering economic growth, assisting the return of refugees, restoring infrastructure and basic services, supporting civil society, rebuilding local government capacity, and mitigating sources of conflict. But getting it right is not easy. If Administrator Shah wants USAID to be heavy hitter on fixing fragile states, he should consider a few critical steps:

Maintain a Distinct Development Identity: A close visible relationship between development actors and international military actors undermines the effectiveness of aid -- particularly when those military forces are a party to the conflict. Research by Mercy Corps in Iraq and Afghanistan found that local communities report considerably higher trust and confidence in independent civilian aid providers -- and considerably lower confidence in aid that is linked to the military. In both countries, communities ranked Provincial Reconstructions Teams (PRTs) -- which are largely staffed and funded by the military -- as the least favored of any providers of aid.

In USAID's efforts to extend assistance programs to insecure areas, its staff in Iraq and Afghanistan have often worked from military bases and PRT platforms. This approach comes with an important tradeoff: by creating the impression of "development at gunpoint" USAID's close affiliation with the military alienates communities and raises suspicions about the true intentions of US aid programs. It also turns development activities into targets: a Washington Post report last year found that USAID/Afghanistan programs that were clearly affiliated with US counter-insurgency efforts were being specifically targeted by insurgents. Visibly de-linking aid efforts from the military could ultimately better serve US stabilization objectives.

Put the Money on Target, and on Time: USAID's "relief to development gap" -- the falloff between its emergency aid and long-term aid -- leaves the agency without appropriate resources during the critical early phase of a transition. For example, a ceasefire in August 2006 ended Northern Uganda's armed conflict, but USAID did not launch its first multi-year stabilization program there until February 2008. Governance and infrastructure funds did not start flowing until September 2009, more than three years after fighting ceased.

While USAID's Office of Transition Initiatives is theoretically responsible for this phase, it tends to focus on quick-impact interventions that do not link from relief to development. In lieu of a consistent mechanism for adequately resourcing transition work, USAID staff must frequently resort to stretching out short-term disaster response funding -- an inappropriate tool for post-disaster work -- while waiting for longer-term development resources to start flowing years down the road. USAID badly needs a new funding structure that can bridge the relief to development gap in post-crisis and post-conflict settings.

Transfer Capacity, Not Just Stuff: USAID's most effective work in transitional environments builds up the capacity of local institutions at the same time as it provides reconstruction resources. A partnership between USAID and Mercy Corps in postwar Kosovo put money on the table for infrastructure rehabilitation -- on the condition that local authorities developed accountability mechanisms, engaged civil society in setting reconstruction priorities, and involved ethnic minorities in decision-making.

This approach was slower than simply plowing ahead and conducting reconstruction projects firsthand. But this slower process left behind lasting capacity and set precedents for good governance and social inclusion -- critical elements of stability. In contrast, when USAID focuses on "quick impact" projects and tries to push money out the door quickly, it is much more difficult to advance true recovery. Research by Tufts University in Afghanistan found that "Spending too much too quickly with too little oversight in insecure environments is a recipe for fueling corruption, delegitimizing the Afghan government, and undermining the credibility of international actors."

Get Governance Right: Building effective local governance is a long-term process, requiring sustained investment in both the local institutional capacity to "supply" good governance and in accountability mechanisms that enable civil society and market interests to "demand" good governance. This kind of holistic understanding of governance assistance should shape the whole gamut of other stabilization assistance interventions. The way that aid is spent in fragile states impacts the viability of local governments: if an international actor is seen to represent an easy source of funds, there is little incentive for local authorities to govern responsibly nor for their constituents to hold them accountable. It becomes much easier to do an end-run around formal government structures and go straight to the internationals.

As one PRT civilian wrote of his experience in Iraq: "The government of Iraq became conditioned to look to the U.S. Army particularly and the U.S. Government more generally as the bill payer of first resort. We were often unable to get the government of Iraq to move forward on its own until we convinced it that we lacked or were otherwise unable to provide money..."

Seek Partners, not Puppets: USAID has a rich history of high-impact partnerships with local governments, local civil society groups, and international development agencies. At their best, these partnerships are a two-way street, with both USAID and its implementers contributing complementary expertise, creativity, and critiques. Unfortunately, as political pressure on the agency has increased in recent years, USAID has been moving away from this tradition -- often prioritizing control ahead of partnership.

While this shift aims to produce more reliable results, it too often achieves the opposite: oversight can become counterproductive when it verges into micromanagement. When USAID dictates everything from project tactics to org charts to minor budget items, the agency stifles innovation and risks prioritizing its partners' compliance capacity over their technical expertise and local knowledge. This is a recipe for problems in fragile states, whose complex challenges leave little margin for error and make grassroots relationships and a granular knowledge of context central to effective work. USAID would do well to recalibrate its approach.

Administrator Shah is right to argue for the relevance -- even indispensability -- of USAID in stabilizing fragile states. Taking the above steps would go a long way to making this vision a reality.

Jeremy Konyndyk is Co-Director of Policy and Advocacy at Mercy Corps, leading Mercy Corps' external policy work on Africa, Southeast Asia, and US foreign aid reform. Michael Bowers is the Regional Program Director for South, Central and East Asia at Mercy Corps.

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