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Begin New Search Topic Foreign Aid Content Type Policy Brief Publishing Institution United States Institute of Peace Publication Year within 10 Years

1. Maximizing the Impact of Aid to Pakistan: Leverage Reform and Local Capacity

Author:
Richard Albright
Publication Date:
07-2014
Content Type:
Policy Brief
Institution:
United States Institute of Peace
Abstract:
The effectiveness of U.S. civilian assistance to Pakistan depends on sustained funding commitments from the United States and sustained commitment to economic and institutional reform from Pakistan. Weak public institutions and poor governance have greatly impeded Pakistan's development. U.S. assistance should focus on strengthening institutions systemically. Direct assistance to the Pakistani government—through financing that supports specific reform programs and policy initiatives and cash-on-delivery mechanisms that offer assistance after agreed performance criteria are met—could incentivize Pakistani public institutions to improve service delivery. Pakistan's devolution of authority to the provinces offers an opportunity for well-targeted and cost-effective initiatives to incentivize improvements in provincial public service delivery in such areas as basic education, health and policing.
Topic:
International Relations, Economics, Foreign Aid, and Reform
Political Geography:
Pakistan and United States

2. Afghanistan's Looming Fiscal Crisis: What Can Be Done?

Author:
William A. Byrd
Publication Date:
08-2014
Content Type:
Policy Brief
Institution:
United States Institute of Peace
Abstract:
Afghanistan faces a fiscal crisis that reflects worsening domestic revenue shortfalls since 2011, which could reach $1 billion in 2014 compared with the 2011 outlook. The massive theft and fraud at Kabul Bank, failure of mining activities to pay taxes and royalties, and mislabeling of some commercial imports as duty-free are among other contributing factors. Turning the fiscal crisis around will take time, but a legitimate, credible new Afghan government coming into office is essential. Quality leadership and management teams in the Ministry of Finance and the Central Bank will be crucial for success. Urgent measures are needed to turn around poor revenue performance, including strong signals from the top, possible exploitation of limited new revenue sources, and cooperation among different agencies to reduce smuggling and contain revenue leakages. Accelerated recovery of stolen and lost Kabul Bank assets should be a priority, which could provide over $100 million per year of extra fiscal space for the budget. Reforms of the revenue system need to be initiated, including introduction of a value-added tax, and possibly reform of the revenue and customs services. Expenditures will need to be cut. This requires the elimination of unnecessary and wasteful expenditures as well as the meaningful prioritization of programs within a tight resource envelope. Additional international fiscal support will be needed to help stabilize the budget in the short run. Linking aid for the Afghan discretionary budget to increases in domestic revenues and Kabul Bank recoveries would make sense.
Topic:
Debt, Economics, Foreign Aid, and Financial Crisis
Political Geography:
Afghanistan

3. How to Spur Afghan Reforms: The Limits and Benefits of Incentives

Author:
Trent Ruder
Publication Date:
11-2014
Content Type:
Policy Brief
Institution:
United States Institute of Peace
Abstract:
Donors have increasingly sought to condition assistance funds for Afghanistan, particularly as a result of inadequate reforms during the Karzai administration. Since its negotiation in 2012, the Tokyo Mutual Accountability Framework has been the basis of most donor incentive decisions on Afghanistan. Donors need to consider who benefits from incentives, how resources and requests align, Afghanistan's capacity to implement reform, and the consequences of success or failure. Donors should both temper their expectations and minimize the linkage between highly politicized issues and incentive programs. Incentive programming is not a magic bullet, but it can help shape dialogue with the new Afghan administration.
Topic:
Corruption, Foreign Aid, Fragile/Failed State, Governance, and Reform
Political Geography:
Afghanistan and Tokyo