Peace & Stability Journal Peace & Stability Journal, Volume 6, Issue 3 | Page 18

withdrawal of aid created a vacuum because it was unclear who would fill the void, given Pakistan’s dependence on foreign aid. Overall, the root causes for USAID’s aid withdrawal were both internal and external. Pakistan’s shifts in foreign policy, increases in the focus on certain development priorities, reductions in constituency support, assessments of environmental changes, and evaluation of programs’ performance, lead to USAID’s decision to withdraw support. Impacts of Aid Reduction The impact of aid reduction and eventual donor exit can have an enormous implications for the host nation, in particular, nations with struggling economies that have just emerged from violent conflict. Though it is important for these nations to become self-sustainable and independent, and to build the strength of their local civil society, it is necessary they be provided with sufficient initial aid to build towards their development goals, and to plan the most appropriate allocation for the use of the donor dollars. If no such plans exists, donors will eventually withdraw funding due to the potential misallocation of funds and a general lack of development progress. 16 Host nation’ CSO credibility with the local population may be affected in that a decrease in aid and donor assistance can also lower internal CSO capacity to use funds because of staff turnover and CSO brain drain. However, donor exit may also have a positive effect on CSOs by increasing host nation ownership, creativity and innovation. When the host nation is forced to rely on already existing internal organizations, or to create new structures, it is possible that the nation can become self-sufficient using only existing resources, and building capacity internally. Retraction of external funds could also force host nation governments and organizations to think of new and innovative ways to solve their internal issues, and build up their CSOs. Aid decrease and donor exit can impact the development objectives of a nation, causing the host nation to shift focus from an area of core competence to another area based on donor fund allocation. For example, Liberia shifted their focus from improving transparency in election to health care issues based on the allocation of donor funds. If resources decline, then host nations must have lower expectations for the number of issues addressed at one time, and focus on those development concerns that can be addressed in a much shorter period of time.