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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

4. Rethinking Afghan Local Governance Aid After Transition

Author:
Frances Z. Brown
Publication Date:
07-2014
Content Type:
Working Paper
Institution:
United States Institute of Peace
Abstract:
The conclusion of the U.S.-led "surge" of 2009 onward and the closure of provincial recon¬struction teams and other local civil-military installations have affected how aid is delivered in Afghanistan's more remote and contested areas. The time is ripe for a recalibration of donor approaches to local governance and development in areas previously targeted by the surge. Specifically, foreign stakeholders should reexamine three central principles of their previous subnational governance strategy. First, donors should revise their conception of assisting service delivery from the previous approach, which often emphasized providing maximal inputs in a fragmented way, to a more restrained vision that stresses predictability and reliability and acknowledges the interlinked nature of politics, justice, and sectoral services in the eyes of the local population. Second, donors should reframe their goal of establishing linkages between the Afghan govern¬ment and population by acknowledging that the main obstacles to improving center-periph¬ery communication and execution are often political and structural rather than technical. Third, donors should revise the way they define, discuss, and measure local governance prog¬ress in contested areas, away from favoring snapshots of inputs and perceptions and toward capturing longer-term changes on the ground in processes, structures, and incentives. The coming political and development aid transition provides an overdue opportunity for Afghan governance priorities to come to the fore. At the same time, the ever growing chasm between Kabul's deliberations on the one hand and local governance as experienced in more remote, insurgency-wracked areas on the other presents renewed risks. In the short term, donors let the air out of the aid bubble carefully. In the long term, resolving Afghanistan's local governance challenges continues to demand sustained commitment and systematic execution.
Topic:
International Relations, Economics, and Foreign Aid
Political Geography:
Afghanistan and United States

5. Pathway to National Dialogue in Sudan

Author:
Jon Temin and Princeton N. Lyman, Ph.D.
Publication Date:
08-2013
Content Type:
Policy Brief
Institution:
United States Institute of Peace
Abstract:
Sudan urgently needs to embark on a national dialogue and reform process that is led by Sudanese and supported by the international community. The process should be broadly inclusive, involving elements of the current regime, Islamists, and all armed and unarmed opposition groups. Any meaningful process will be lengthy, likely requiring years to complete. If a genuine, inclusive process is underway, elections in 2015 may need to be delayed. The African Union High-Level Implementation Panel has a critical role to play in advocating for and guiding such a process.
Topic:
Development, Economics, International Cooperation, Foreign Aid, and Fragile/Failed State
Political Geography:
Africa and Sudan

6. Changing Financial Flows During Afghanistan's Transition: The Political Economy Fallout

Author:
William A. Byrd
Publication Date:
09-2013
Content Type:
Policy Brief
Institution:
United States Institute of Peace
Abstract:
Massive amounts of money flowing into Afghanistan since 2001 (foreign military spending, aid, domestic revenues, opium profits, land takeovers and development, informal mineral exploitation, theft of funds such as at Kabul Bank) have had profound political economy impacts, not least by further entrenching factionalized politics and fragmented patronage networks. The ongoing transition involving the drawdown of international troops and Afghan takeover of security responsibilities will be accompanied by drastic declines in international military expenditures and aid. Total resources for patronage will fall sharply; the Afghan government's share in remaining funds will increase; declines will be greatest at local levels, especially in insecure areas in the south/east which had heavy international military presence and high aid; and drug money will become increasingly important. At lower levels of patronage, competition over declining resources may intensify, so even in the absence of major armed conflict at the national level, localized conflicts may continue and even proliferate, aggravated by taking revenge and “settling accounts” by currently excluded and marginalized groups.
Topic:
Arms Control and Proliferation, Development, Economics, Islam, Foreign Aid, Narcotics Trafficking, and Foreign Direct Investment
Political Geography:
Afghanistan and Central Asia

7. Extractive Industries and Peacebuilding in Afghanistan: The Role of Social Accountability

Author:
Sadaf Lakhani
Publication Date:
10-2013
Content Type:
Working Paper
Institution:
United States Institute of Peace
Abstract:
While Afghanistan's economy has experienced strong growth in the past decade, declining levels of overseas development assistance beginning in 2014 are expected to substantially reduce the country's economic growth rate, with attendant political implications.
Topic:
Conflict Resolution, Development, Economics, Natural Resources, and Foreign Aid
Political Geography:
Afghanistan

8. Providing Justice in Haiti

Author:
Robert Maguire
Publication Date:
04-2012
Content Type:
Policy Brief
Institution:
United States Institute of Peace
Abstract:
In spite of the Haitian government's stated priority of improving rule of law, a Haitian court's decision not to prosecute former dictator Jean-Claude Duvalier for crimes against humanity has cast doubt on the sincerity of that commitment. The failings of Haiti's judicial system are well-known, but historically reform efforts have been ineffective. Improved provision of justice is critical for the creation of conditions for stability and the eventual withdrawal of the United Nations Stabilization Mission in Haiti (MINUSTAH). Modernizing Haiti's antiquated legal and penal codes are an essential component of rule of law reform. Some progress is being made toward this end. A greater emphasis is needed on coordinating efforts among international donors and improving interaction with Haitian counterparts to achieve progress on judicial reform.
Topic:
Crime, Human Rights, Foreign Aid, Fragile/Failed State, and Law
Political Geography:
United Nations, Caribbean, and Haiti

9. Haiti: Turning the Page?

Author:
Robert Maguire
Publication Date:
07-2012
Content Type:
Policy Brief
Institution:
United States Institute of Peace
Abstract:
Progress toward a better Haiti during President Michel Martelly's first year was undermined by a multitude of political crises.Confirmation of a new prime minister by Haiti's parliament provides an opportunity to rectify previous missteps and begin moving Haiti toward a peaceful and prosperous future. An important indicator of the new prime minister's agenda for improving conditions among Haiti's impoverished majority will be the success of new social programs.Increased foreign direct investment and augmented domestic revenue—the latter linked to an anti-corruption campaign—are important components of the new prime minister's strategy to revitalize Haiti's economy and society.
Topic:
Corruption, Development, Natural Disasters, Foreign Aid, and Foreign Direct Investment
Political Geography:
Caribbean

10. Reconstruction Zones in Afghanistan and Haiti

Author:
Graciana del Castillo
Publication Date:
10-2011
Content Type:
Working Paper
Institution:
United States Institute of Peace
Abstract:
The longest war and one of the largest relief efforts in U.S. history- in Afghanistan and Haiti, respectively-are testing the cost-effectiveness of U.S. foreign assistance in conflictravaged or disaster-torn countries. U.S.-led economic reconstruction in both countries is clearly off track and becoming increasingly costly and unpopular-both at home and in the respective countries. Reconstruction zones (RZs), consisting of two distinct but linked areas to ensure synergies between them-a local-production reconstruction zone (LRZ) producing for local consumption and an export-oriented reconstruction zone (ERZ) producing exclusively for export- could be used to replace the fragmented way aid is provided to these countries with an integrated strategy for economic reconstruction. With an appropriate legal and regulatory framework, ERZs-operating as free-trade zones- could create appropriate links to the national economy as well as positive externalities or spillovers. Such a framework would avoid the problems created by these zones operating as enclaves in Haiti in the past. By targeting aid to provide adequate infrastructure and services within the RZs at a manageable scale, countries could jump-start their productive sectors and create jobs and entrepreneurship in agriculture, light manufacturing, and services, both for domestic consumption and for exports. By creating dynamic and inclusive growth, RZs could help countries stand on their own feet, consolidate peace, and overcome the unsustainable aid dependency to which they have grown accustomed.
Topic:
Foreign Policy, Humanitarian Aid, War, Natural Disasters, and Foreign Aid
Political Geography:
Afghanistan, United States, and Caribbean