5. Investing carefully and applying conditionality

Summary of recommendations

Make assistance, especially when material, conditional on improvements in governance and oversight.

Introduction to key mitigation

In fragile and conflict environments, there is often a temptation to push for quick wins, with a focus on short-term projects that can show tangible results fast. These ‘wins’ are often spurious, however, as they have little to do with long-term improvements in governance or economic development. Rather, if they come with a quick injection of significant resources, these projects may benefit corrupt networks and may undermine longer term stabilisation efforts, including sustainable governance reform.

A more sustainable approach is a slower injection of resources combined with conditionality, or tying the release of successive instalments of assistance to the recipients’ ability to meet particular conditions. But in many interventions, conditionality tends to be an afterthought. In Afghanistan, for example, conditionality only became a priority ten years into the intervention, when the Tokyo Mutual Accountability Framework of 2012 explicitly tied continued support for Afghanistan to the Afghan Government’s ability to deliver agreed reforms. When introduced, however, conditions have tended to drive improvements in behaviour and standards.

Case Study Snippet

Corruption and Plan Colombia: The Missing Link

The case of Colombia suggests that conditionality can help spread and strengthen standards of behaviour. Making US security assistance conditional on respect for human rights has helped push integrity and professionalism in the Colombian military. Even though there was resistance to how conditionality was implemented – especially to vetting of armed forces personnel by foreign government officials and to dismissal without a trial – the Colombian armed forces came to accept the premise behind the conditionality.

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Conditionality in US security assistance has recently been extended to include corruption, especially for programmes in Central America and Ukraine.

Such laws and conditions require careful application. A legal prohibition on assistance to those with a history of abuses or involvement in corruption could protect resources; however, it could also lead to funding being withheld from countries which really need it, and preclude an opportunity to help tackle corruption. Therefore, while conditionality can and should be used as a lever to push for better behaviour and to remove those who block reforms, complete withdrawal of assistance should only be applied as a last resort.

Within host states, civil society organisations (especially transparency and governance-focused organisations), as well as independent business groups, can help design conditionality that could spur change rather than overwhelm actors. In particular, they could assist in ensuring that conditions imposed are realistic for host nation actors to meet, and can advise on designing monitoring systems to verify whether conditions have been met, and carry out the actual monitoring work.

Moreover, for conditionality to be successful, buy-in and commitment from both sides are necessary: the recipient of assistance needs to want to fulfil the conditions and the donor to actually verify said conditions and to hold recipients accountable when they do not comply.

Case Study Snippet

Afghanistan: Corruption and the making of warlords

In Afghanistan, the DOD Inspector General reported in 2016 that US commanders did not use conditionality to the fullest extent as they were reluctant to enforce agreed requirements.

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Costs and benefits

Conditioning delivery of assistance on improvements in governance or respect for particular standards of behaviour usually requires political and financial investment. Politically, mission staff need to be prepared to acknowledge lack of progress and to accept spending below agreed levels if conditions are not kept. Financially, missions might need to invest in additional expertise needed to monitor compliance, for example staff who can vet individuals for records of abuse or check for required improvements in standards. But conditionality also has benefits: apart from exerting pressure to improve standards of behaviour, it allows mission personnel to identify problems in a timely manner and adjust programming accordingly. It also protects resources from waste and misappropriation.

Examples

Case Study: Afghanistan: Corruption and the making of warlords

Commitment letters: Afghanistan

Prior to 2014, there were no conditions on the funds disbursed to the Afghan Ministries of Interior and Defence through the US Combined Security and Transition Command-Afghanistan (CTTC-A). After 2014, CSTC-A used ‘commitment letters’ – documents setting out the conditions that Afghan institutions had to meet to receive tranches of funds or resources – to foster compliance and long-term planning. There is some evidence that conditionality did improve the performance of Afghan institutions: in 2016, DOD reporting indicated satisfactory progress in two-thirds of conditions.

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Case Study: Corruption and Plan Colombia: The Missing Link

Conditionality and vetting: Plan Colombia

US Congressional appropriations bills providing the resources for Plan Colombia conditioned the release of equipment and offers of training on Colombia’s armed forces respect for human rights: prior to units receiving assistance, their members needed to be vetted for any history of abuse. In 2006, $30 million in aid was frozen in response to the killing of counter-narcotics police officers by soldiers, allegedly in the service of a drug cartel. Conditionality was also used to force particular individuals with questionable records out of the armed forces.

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Key Personnel

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Audit units