Introduction
At the November 4th Community of Practice on Aid Reduction and Local Civil Society workshop at the United States
Institute of Peace (USIP), experts from around the country
and world gathered to discuss the impact of donor withdrawal
on local civil society in states in transition. Understanding the
impact of aid reduction and donor withdrawal is important to a
wide variety of stakeholders, including donors planning for aid
reduction, local civil society organizations adapting to drawdowns, and security personnel integrating civil society into their
peacebuilding and stabilization efforts. The workshop highlighted the needs of all stakeholders for enhanced data on the
scope, scale, and timing of aid reduction, and on civil society’s
ability to adapt to reductions in aid. An expanded understanding of these data points can enable better planning processes
for all affected parties, and facilitate the development of best
practices for donors, civil society, and the security sector.
There has been a noticeable pattern in foreign aid given to post
conflict states; it is given rapidly and in large quantities in order
to reduce violence, and then is noticeably reduced. Money
seemingly flows into a country as a result of an initial reduction
in violence, however investment dwindles over time, and is not
apparently aligned to any metric, such as the continued reduction of violence or the success of post-conflict reconstruction.
Foreign aid can cause more problems for the host nation by
undermining local civil society.
Afghanistan as an Exemplar
Afghanistan is an example of the negative impacts of foreign
aid and aid reduction. Immediately after 2001, Afghanistan
received huge amounts of foreign aid, making it very dependent
on external donors. Furthermore, corruption embedded within
Afghan society made it difficult to track the actual utilization of
foreign aid, and whether it was reaching its intended audience.
The lack of structure and organization of Afghan civil society
made it difficult for it to contribute to creating development
and preserving peace. Civil society, which is a non-profit,
non-governmental sphere of association and interaction, will
help countries to maintain stability even after international
aid is withdrawn by promoting sustainability, defining specific
goals, and helping to maintain peace. Poor peacebuilding and
reconstruction outcomes in Afghanistan made it susceptible to
donor fatigue. In order to prevent host nations from becoming
disorganized and dependent on foreign aid, and therefore prone
to more issues like violence and corruption, these nations must
build up their grassroots civil society organizations (CSOs), and
maintain CSO and governmental transparency so that foreign
donors will know exactly how their money is being used. This
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will allow the host nation to preserve peace and continue development even after aid reduction.
It is important to look to local civil society to facilitate this
transition and prevent relapse into economic depression or
conflict. A reduction of funding from aid programs forces local
civil society to return to grassroots sources and become more
self-sustaining.
Causes of Aid Reduction
The workshop participants divided into discussion groups to
address issues related to aid reduction. The main groupings
were: root causes of aid reduction, impact of decreasing aid and
donor exit, and strategies for success. Within each group, there
were smaller sub-groups in order to discuss particular issues in
greater depth, as well as to gain more opinions from people of
various backgrounds and expertise.
Discussion of the root causes of aid reduction was divided into
subcategories: internal public, external public, external private,
and internal private. Public and internal causes of aid reduction
include “flavor of the month” donor fashion, where a donor will
frequently change where it distributes its aid depending on the
areas in need at the time. Frequent changes of donor aid implies
that aid will be retracted from one area or sector and sent to
another based on the current trends of where aid is being sent.
Withdrawal of military forces and United States Agency for
International Development (USAID) staff can contribute to aid
reduction. The lack of a military presence, particularly in a post
conflict area, often causes a relapse into instability, which is a
major security concern. Donors may retract aid from countries
that cannot provide adequate military protection against direct
threats to workers on the ground. If a country receiving aid
meets or changes its development objectives, then the allocated
funds may be rescinded in a particular sector, and never transferred to a different internal issue. Lastly, donor fatigue can lead
to lessening in the amount of aid. Donor fatigue may be due
to frustration in the lack of progress on a project, or the lack of
significant change in the recipient country.
The external and public causes of aid reduction were discussed
in great detail, with a focus on absorptive capacity, macro geopolitics, and budget cuts. Donor’s perception of the country
receiving aid contributes to aid reduction if the country appears
to be wasting money, or if the government and CSOs are performi