Managing the Recovery of Failing States (Part I)

After eight years and many billions of U.S. dollars spent to help Pakistan fight terrorism and alleviate poverty, a sorry record has emerged — showing waste, corruption and big outlays on programs unrelated to either goal.

Next door, Afghanistan is emerging as a nation-building project at the breaking point.

The United States is increasing troop levels to roll back Taliban violence, even though the enlarged Western presence could stoke Pashtun resentment and lend the Taliban the perceived legitimacy of resisting the occupying infidels.

This is more than a "neighborhood" problem. Fragile and failing states are lining up for emergency-room treatment, but the question is, just who should deliver the recovery services that are so desperately needed?

Rich-world consultants and international agencies can get things done, but their prominence can undermine fledging governments that are struggling to build legitimacy with cynical and often traumatized populations.

Ideally, governments should lead recovery and development efforts with outside financial assistance. Unfortunately, in today's world, many of them lack the capacity, the will or even the legitimacy to do so.

In the flare-up over Pakistan, Shaukat Tarin, Pakistan’s finance minister, has criticized the U.S. penchant for channeling much of its assistance through U.S. firms — rather than through their lower-cost Pakistani counterparts.

Meanwhile, a study from Harvard's Kennedy School says that the U.S. money that went directly to Pakistan was mismanaged, with the army often using funds not to fight terrorism, as prescribed, but to acquire costly conventional armaments for the country's cold war with India.

In a world of weak, corrupt state structures, recovery architects find themselves searching for partners with enough local knowledge and legitimacy to deliver needed programs, and eventually to manage them with a minimum of foreign support.

Experience suggests there are two largely unhelpful patterns at work here. In the first, donors pile unrealistic expectations onto fragile, under-resourced governments. In the second, they treat recovery as an international project in which local actors are asked to stand on the sidelines and watch.

In the first scenario, funders risk channeling aid to the very structures that have historically failed to deliver any meaningful development to the population, or that have deepened social fault-lines by favoring one region or ethnic group over others. But when the donor countries or international agencies manage everything themselves, without an exit strategy, they risk undercutting the national government — while saddling themselves with open-ended responsibilities for protecting the population and providing basic services.

According to World Bank data, there are about 65 countries involved in designing poverty reduction strategies, which are blueprints for coordinating government and donor activities intended to raise living standards. Of these, 20 have experienced violent conflict in the past ten years, while another dozen are considered fragile and subject to conflict.

In those emerging from actual — not just threatened — civil conflict, societies are both traumatized and polarized. Institutions have collapsed, physical structures are shattered and new forms of poverty have arisen on top of the old ones as a result of displacement, injury and death. Because trust is a rare commodity, any governmental authority faces questions not only about its competence — but also its legitimacy.

Making a difference — despite this "perfect storm" of obstacles — is critical because the threat of renewed conflict is high. Paul Collier, in The Bottom Billion, writes that "only around half of the countries in which a conflict has ended managed to make it through a decade without a relapse into war."

A crucial priority is generating what's called a "peace dividend"— that is, tangible and recognized gains that are understood to be available in peace and absent in war. A peace dividend can help tip the balance toward working with, or moving toward, inclusive, democratic processes, rather than taking up arms again.

Constructive people have little difficulty coming up with to-do lists for countries that are recovering from conflict or reeling from years of mismanagement and grinding poverty. Roads are pitted. Electricity is minimal. Schools and health clinics barely function. Pandemic crime and irregular tax collection can usually be added to a list that runs on and on.

The big problem is building reliable partnerships for managing the various tasks that are understood to be necessary for stability and restoring livelihoods.

Governments in post-conflict settings need support if they are to begin delivering meaningful services to the population and establishing legitimacy. But it's important that donors understand what drove the conflict in the first place in order to avoid restoring the very structures that led to the violent breakdown.

Editor’s Note: This is the first of a two-part series. Read Part II here.