Social Funds in LICUS Contexts: Experiences and

Operational Lessons Workshop Summary

The Social Funds in LICUS Contexts: Experiences and Operational Lessons workshop was held on April 26th, 2005. The workshop was hosted by the Social Funds team (Social Protection), PREM/DEC, Conflict and CDD (Social Development), the LICUS team, and CESI (WBI), and co-chaired by David Warren, Sr. Protection Specialist (LCSHS) and Stephen Commins, Sr. Civil Society Specialist (EXTIA). Veronica Nyhan (WBIEN) facilitated. The workshop was attended by about 40 participants, including staff of DFID in London, who were connected via videoconference throughout the morning. The team that designed and organized the workshop included Steve Commins, David Warren, Veronica Nyhan, Kim Maynard (SDV), Christian Lotz (OPCCS), and Mariana Felicio (HDNSP). Kathryn Casson (DFID) also contributed to the early conceptualization. These minutes were drafted by Mariana Felicio, with input from all team members.

While it is not possible to capture all of the discussion of the day, this short note aims to provide a summary of the background and objectives of the workshop, as well as highlights of the key issues presented and discussed. Additional materials (presentations, papers) are attached to this summary.

Background and Workshop Objectives

In many countries characterized by weak or failed states, including countries facing conflicts or emerging from them, social fund/CDD operations often feature prominently among the interventions found on the institutional landscape. It is not surprising that donors and their counterparts in LICUS often turn to such programs as core elements in their strategies to channel funds toward basic service delivery for poor and vulnerable groups. SFs/CDD programs offer many features that seem attractive to donors in such contexts, including:

·the fact that they can be set up as streamlined/parallel agencies, with ring-fenced management and financing; this often appears attractive to donors interested in moving funds into a country in a kind of “emergency” mode;

·their strength in investing in urgently needed basic services in accordance with local/community demand;

·they encourage solutions that involve co-production;

·they can contribute to governance / empowerment structures at a local level, which somehow seems (to the development actors entering a LICUS) to be a basic building block for development, even when states are weak.

However, the often separate donor programs and projects for improving services and improving the public sector result in what has been described as the “two-track dilemma”. The dilemma is an inherent tension that can exist between approaches taken to deliver services to meet immediate needs, and those needed to strengthen public institutions in the longer term.

This leads to a question: What can be done to ensure that even when we take a parallel (or enclave), “agency-based” approach (which is how many SFs in difficult environments are designed), we are nonetheless laying a foundation for a more sustainable and integrated approach, with the public sector, over the medium and longer term.

The objective of the “Social Funds in LICUS contexts” workshop was to offer an opportunity for an informal discussion among Bank staff with recent experience working in LICUS contexts, to share lessons about the evolution of Social Funds/CDD programs in LICUS environments over the past few years, and in particular about what can/has been done to move these toward more integration with public sector reform strategies in such countries. As the workshop developed, a number of additional stakeholders from donor agencies (DFID and USAID) were also invited to share in the discussion; and Institute of Development Studies was invited to share preliminary findings from a study for the World Bank on aid projects that have worked well in difficult environments.

The workshop included a mixture of cases, conceptual presentations, and group work centered on two “cases in progress” (the latter included presentations and facilitated discussions with the teams preparing CDD/SF projects in Southern Sudan and Haiti).

Highlights of the Discussion

Afghanistan Community Fora Program

In the first substantive presentation of the day, Sarah Lister, Sr. Researcher from the Afghanistan Research and Evaluation Unit (and contributor to an IDS Study for the World Bank), discussed the case of the “Community Fora” program in Afghanistan, a program established through the intervention of UN-Habitat. The case outlined a story of the evolution of a relatively small-scale and intensive community-focused program through turbulent political changes; and also described the influence of that program on the subsequent “National Solidarity Program” (NSP), which aimed to take emphasis on community level governance and empowerment to a much larger scale.

Participants felt that the case provided useful lessons regarding the potentials for and importance of establishing locally relevant examples of (gender-inclusive) community participation as a foundation for local governance and decision-making. The case was one of many referred to throughout the day as demonstrating that extraordinary potential for achievement, and significant innovation, is possible in difficult LICUS contexts.

Many parts of the discussion centered on challenges and opportunities faced by NSP in scaling up program impact. When NSP was initiated, other international and local organizations were involved in facilitation and capacity building at the community level. International pressure to scale up has been a challenging issue in Afghanistan. There was no problem of funding during post-conflict transition, and the international community had to choose between CDR with an imperfect timetable or a more traditional approach. There was no clear answer to this. Speed was often a real need in post-conflict situations, but there is also a need for a more honest and realistic expectation for achieving outcomes. Though it is commonplace for agencies such as NSP to take an “enclave” approach, in many cases, team leaders use the social fund/CDD project as a last resort given that they cannot resolve many issues present in a LICUS context country.

Finally, the workshop participants debated the uniqueness of the Afghanistan context, and the impact that a repressive regime had in terms of pressures for scaling up. If an external military force had not intervened, maybe NSP would have encountered greater difficulties in attaining scale. But it was suggested that even under repressive conditions, donors still had an obligation to work. The early success under Taliban had been possible by patient work with key individuals at the local level. There had been no attempt to take on the whole system. After the fall of Taliban, the NSP had contributed to state building, but this was clearly a long term endeavor.

Tensions and Tradeoffs

The Afghanistan case and discussion throughout the day highlighted tensions and tradeoffs commonplace in LICUS contexts. Some examples of discussions in this respect included:

·Rapidly delivering “hardware” in response to immediate local needs while trying to address long-term capacity.

·Speed isoften a real need in post-conflict situations.

·Establishing genuine institutions (which can be hard) as opposed to just structures that serve for project implementation.

·Social Fund/CDD operations are key to trust building and strengthening social infrastructure.

·Scaling up while still maintaining an intensive focus on governance and sustainability.

·Tension between the communities selection between productive activities versus public goods is a challenge given that experience demonstrates that the former are ‘least likely to succeed’ once implemented.

·Bypassing local authority structures in favor of streamlined implementation mechanisms, but risking longer term engendering of resentment and weakened sense of ownership.

Frameworks for working in LICUS Contexts

Various frameworks for thinking about operating Social Funds in LICUS contexts were presented and discussed.

Stephen Commins, Sr. Civil Society Specialist, made reference to the WDR 2004 framework which emphasizes the different relationships of voice, accountability, and compact between service providers, clients and government, stressing the importance of service sustainability. Too often the delivery of services falls far short, in particular, in reaching the poor. He referred to Sarah Lister’s slide on “What is Community Fora?” and the need for a iterative process in building capacity at the community level to achieve sustainable interventions. The tension between the need to deliver services quickly in LICUS contexts and the need also to support the long road to building an effective, accountable public sector, frames the ‘two track problem’ outlined in his paper. Donors need better political analysis, greater coordination, and increased clarity in their approach to services and governance. Moreover, donor staff and management should put incentives in place to undertake the necessary political and social analysis prior to program design.

Nick Leader, from DFID’s Poverty Reduction in Difficult Environments Team, once again emphasized the importance of service delivery, in his presentation of a framework for categorizing countries in terms of their capacity for delivering services and their willingness to do so. Countries can be categorized into the following four groups:

High

Weak but Willing / Good Performers
Weak – Weak / Strong but Unresponsive

LowCAPACITY High

He pointed out that service delivery can serve as a potential entry point and trigger for social and political change in a country—a point that suggests (and Jim Manor highlighted this) that addressing immediate local needs and providing services is often important and urgent not only as a goal in its own right, but as a contribution toward the longer term goals of contributing to institutional, social, and political stability/sustainability.

According to the LICUS team, represented by Sarah Cliffe, Program Coordinator, there are four types of LICUS situations:

1)Governance deteriorating

2)Prolonged political crisis

3)Post-conflict transitions

4)Gradual improvers also know as post-post conflict countries,

Countries classified as “LICUS” are roughly equally distributed amongst these categories.

Table 1. Tools to Establish Typology Early On for SFs/CDD in LICUS

Deterioration
·Interim strategy note
·Risk analysis, Early Warning Indicators and Early Response System
·Portfolio restructuring
·Joint analytical work and scenario planning
·Sector projects focusing on stemming decline in governance and/or economic and social indicators
·Use of socio-economic issues for restoration of dialogue / Prolonged political crisis
·Interim strategy note
·Joint analysis and scenario planning, incl. conflict and political/political economy analysis
·Donor to donor harmonization, broadening of alignment and shadow alignment
·Protection of human and social capital through local level, community and non-government institutions
·Use of socio-economic issues for restoration of dialogue/identification of entry points for change
·Demonstration projects
Post-conflict or political transition
·Interim strategy note
·Joint needs assessment/recovery planning missions, incl. conflict and political/political economy analysis
·Comprehensive nationally owned results framework linking political, security, economic, and social recovery
·Where necessary, development policy operations following specific guidelines for fragile states
·Sector and capacity-building projects focusing on state capacity, state legitimacy and economic recovery (may include transitional projects working through CDD or NGO mechanisms)
·Asymmetric reforms by function
·Leadership support/training / Gradual improvers
·Selective CAS focusing several instruments on the same results
·Development policy operations, where chosen, under fragile state guidelines and supported by sector and capacity-building projects aiming at the same selective outcomes
·Joint analysis, including on political economy
·Asymmetric reforms by function and geographical area
·Leadership support/training
·Donor to donor harmonization, working backwards to full alignment and ownership
Developed by the LICUS Team led by Sarah Cliffe

In each of these situations donors must respond to a different set of challenges, but there is sometimes a tendency to focus only on the post-conflict transition countries in the debate. The presentation also highlighted a number of issues for discussion and further analysis:

·In which situations are social funds and community driven reconstruction (CDR) approaches best used?

·How can CDR deliver services instead of just building infrastructure?

·How can CDR projects avoid damaging governance, and can they create a nucleus for future government?

·Can CDR work in conflict, before post-conflict transition begins?

·Can CDR promote political change?

Finally, Kimberly Maynard, CDD/Post-Conflict Specialist, outlined the important differences between conflict and non-conflict fragile states, recognizing the psychosocial damage of war, the doubling of absorptive capacity approximately four years later which corresponds with a heightened threat of renewed conflict, and the concurrent rapid speed of social, political, and economic change. She suggested a three-phase roadmap for supporting the war to peace transition from external provision of services in the community driven reconstruction phase through the delicate transition to state provision of services (with strong involvement of local actors) in the community driven development phase. The 10 year framework suggests activities to support continuation along this spectrum by embedding sustainability and government roles into all aspects of programming and proactively building on them throughout the transition. Participants were reminded that the transition phase, from reintegration to consolidation is when donor funding is the lowest and when conflict is most likely to return if not supported.

In the discussion that followed, participants both reacted to the frameworks and utilized them as lenses to understand better the lessons learned from work on SF/CDD programs in LICUS contexts. Following are highlights of the observations, questions, and issues discussed during this session:

  • Andrea Vermehren, LCSHS, noted that the fact that social funds are flexible/adaptable instruments seems to have made them useful for these long-term challenges. For example, Nicaragua, the second poorest country in LAC took 15 years to transition from conflict, and the role of the SF has changed considerably. Social funds change over time, and the nature of their transition should be analyzed more closely.
  • Extending this discussion further, Yongmei Zhou, AFTPR, pointed out that the “transformational role” of SFs with respect to local governance appears significant but needs to be better understood; it seems all too rare for SFs/task teams to look carefully at their governance impacts. She posed the question, “how do we design a social fund or use the CDD approach to ignite social transformation between civil society and government?”
  • Vivek Srivastava, AFTPR mentioned that in Southern Sudan, it is likely that the new government will have significant amounts of money in coming years; and so governance is an important challenge.
  • Several participants highlighted the importance of supporting an evolution from a purely community-based approach toward working with local governments; some suggested that even in the earliest stages, it is worth trying to work through local governments in some ways, when possible, to enhance prospects for evolution to a more sustainable approach in later years. Where possible (it was suggested) efforts to reform LGs and to establish SFs—often conceived of as two separate challenges—should be designed together.
  • Tjip Walker, AID, pointed out that in addition to paying attention to different aspects of LICUS contexts, it is also important to respect that different services require different approaches—e.g., microfinance must be treated very differently from public goods. In this light, care should be taken not to rely on a SF-type model for all needs.

Other issues and questions raised include:

·The need to focus on local capacity;

·A well designed inter-governmental fiscal system can have positive impacts;

·There is a need to link the local with the macro (build up from SF experience to inform central policy reform agendas);

·Political analysis should be standard in all operations, in particular LICUS countries

·To re-engage, keeping design simple and being modest is the key.

Synthesis of Findings from LICUS Case Studies

James Manor, Research Fellow from the Institute of Development Studies (IDS) presented a synthesis paper called A Synthesis of Findings from ‘LICUS’ Cases. This study, soon to be published, integrates insights from nine studies of development initiatives in six developing countries in Asia and sub-Saharan Africa, most of which qualify as Low Income Countries under Stress’. The ones that were not had recently achieved sufficient ‘turnaround’ to move out of the LICUS category but had exceedingly difficult conditions.

The research uncovered that more can be accomplished in LICUS situations than had been previously anticipated at the outset. Amid excruciating difficulties, even modest achievements have a potent psychological impact and open the way to further advances – precisely because they occur in such apparently unpromising conditions where expectations are therefore exceedingly low. More importantly, greater-than-expected constructive potential was encountered at the local level in these countries, even amid deprivation and devastation.