* -75 \ OCIAL DEVELOPMENT NOTES / CONFLICT PREVENTION & RECONSTRUCTION No. 14 / December 2003 BUILDING CAPACITY IN POST-CONFLICT COUNTRIES This note looks at the challenge of capacity building in post conflict countries, including options for creating capacity and the trade-offs between speed and longer-term impact, the need to ensure that aid management agencies include sunset provisions, and six proposed general lessons for more sustainable capacity building. The Context for Building Capacity under Post-Conflict Fourth, donor pressures to achieve early results are also Conditions likely to be unrealistically high. Donor country policy- Those of us helping countries to build capacity to manage makers rarely understand either the project planning, reconstruction after a conflict has ended need to be fully design, procurement, delivery and construction process, aware of the context in which we operate. Apart from the even when accelerated, or the institutional constraints to obvious destruction of infrastructure, presence of armed project implementation. This is compounded by the "CNN groups and difficult working conditions, there are several effect" where international interest is greatest when the other characteristics of post-conflict conditions that we country is least able to absorb aid. The country is off the need to appreciate. front pages and almost forgotten at the time when it is able to utilize foreign assistance most effectively. First, civil conflicts seldom end in clear cut victories for one side. Post-conflict conditions are inherently unstable. Given the risks of conflict re-emerging and the high There are winners and losers. The winners may have expectations inside and outside the country for results on settled for less than they sought to achieve. Even if one the ground, the challenge for the new post-conflict side appears to have won, how the winner treats the government is to lift the ability of the country to absorb aid defeated party will be critical to whether national productively when donor resources are most likely to be reconciliation takes place and the sustainability of peace. available. Since the greatest constraints to implementing A new government may be an unstable alliance of programs are institutional-human capacity and competing parties or consist of an uneasy collection of organization-strengthening institutions will not only former fighters and technocrats who sat out the war in provide the usual long-term benefits from aid, but will also relative comfort abroad. enable the country to use aid effectively when it is most available and to mitigate risks from unfulfilled Second, a conflict affected country's ability to utilize aid is expectations. low immediately after the conflict due to institutional and physical constraints. Research by the World Bank Options for Creating Capacity confirms this and shows that during the first three years There are four ways to create capacity: after the conflict absorptive capacity for aid is no higher Build capacity, than normal. However, in the next seven years absorptive . Buy capacity, capacity is double its normal level and there is an average Build temporary capacity, or spurt in growth of around two percentage points per annum, which peaks during the 3rd to 7th years and then . Bypass weak government capacity. tapers off.' It is often tempting for donors to try and bypass weak Third, public expectations of the benefits from peace are government capacity and to attempt to rebuild the country likely to be high. After suffering from war, the people themselves. In other words, to contract services directly expect a "peace dividend" and want it immediately, even and provide assistance in kind. This is superficially though such expectations are inevitably unrealistic. attractive when government institutions are weak, skilled nationals are in short supply and the fiduciary systems that ensure that money goes to intended purposes are also weak. Bypassing the government seems even more Paul Collier and Anke Hoeffler (2002) attractive when failure of the reconstruction program has regional or global costs, or the prestige of the donor is at In between buying and building permanent capacity is to stake. build temporary capacity to quick start a reconstruction program before more permanent capacity can be put in But country ownership matters in a post-conflict setting place. The simplest solution is to attract nationals just as much, if not more, than under normal conditions for residing abroad back to senior government positions. development. We have seen that when donors bypass These people can be advisors or managers and national systems anticipated results do not take place. permanent or temporary appointments-one hopes that The recipient country bureaucracy may refuse to they sink roots into their country and remain. cooperate or give at best passive support for foreign Nevertheless, tensions can arise between those who lived interventions. Technical and institutional solutions outside the country during the conflict and those who designed abroad without local participation may be remained. Sometimes non-national advisors can also inappropriate. Donor county firms may not perform well in provide the technical depth a new minister needs. a post-conflict situation where there are formidable costs Foreign advisors with good technical skills and cultural and delays caused by logistics, start-up and learning local sensitivity have worked well, but these people are first and conditions. Bypassing local institutions is usually more foremost advisors, and cannot take decisions. expensive than local solutions and builds resentment when aid money allocated to the country is used to fund Aid Management Agencies2 donor country firms and NGOs, particularly when they Aid management agencies are often established to have not been selected through competitive and concentrate scarce technical and decision-making skills transparent processes. The thesis that remains to be and provide fiduciary assurance to donors. Aid proven is that bypassing local capacity, rather than management agencies are often associated with a multi- building it, costs more and does not produce results any donor trust fund that coordinates and simplifies donor quicker. funding of reconstruction programs. Government institutions are typically weak immediately after the end of Government may buy capacity by contracting services to a conflict and are unable to quickly start a reconstruction the private or non-governmental sector. This may be program. Aid management agencies have been used in necessary when speed is absolutely essential and there is several post-conflict situations-the Council for no time to build indigenous capacity. It may also be Development and Reconstruction (CDR) in Lebanon, the necessary to establish confidence in the government, Palestinian Economic Council for Development and particularly to provide assurances to donors that their Reconstruction (PECDAR) in West Bank and Gaza, the funds will be well spent. In such circumstances hiring Afghan Assistance Coordination Authority (AACA)-and international firms to provide key fiduciary services such these formed useful bridges between donors and the as procurement, financial management and audit services country during the early years of reconstruction. has been tried successfully, e.g., in Afghanistan. In other countries large international firms have been engaged to However, these aid management agencies run into provide a broad range of services-the so-called trouble in the longer run, as conventional ministries "reconstruction consultant"-but contracting management become organized and capable of administrating of an entire reconstruction program to a consulting firm reconstruction and development programs. Aid has had at best mixed success. Few firms can offer a management agencies are easier to start up than to kill wide breadth of services with uniform technical depth, and off. The worst examples become governments within the large firms which tend to be engaged as governments and become entrenched in project "reconstruction consultants" may lack the agility or implementation and corruption. experience to respond to the unpredictable reality of a post-conflict country. The lesson is that buying capacity The key to a successful aid management agency is to can work when there is clearly no other option, and that it ensure that sunset provisions are built into its charter so is better to employ a number of medium sized firms, each that its functions can be transferred to other ministries as of which is strong in a particular area, rather than to they develop capacity. In Afghanistan, this is already employ one large firm which claims to be able to do happening as aid coordination and payments processing everything. are transferred to the Ministry of Finance, reconstruction program management and fiduciary capacity are shifted to While the firms providing temporary capacity may have the new Ministry of Economy and capacity building to the obligations to build local capacity, this has rarely been Civil Service Commission. successful. Few firms have skills in providing emergency services and in grooming nationals to replace them. Indeed, there is almost a conflict of interest. While governments should hold these firms accountable for transferring knowledge and skills, it is more realistic to put in place a parallel program to build the capacity which will 2 For a discussion on aid management agencies, see Salvatore take over once the firms depart. Schiavo-Campo (2003) 2 Building Capacity down reconstruction. This is not to imply that these Building permanent capacity is clearly the best option, if activities should not take place, but that they should be not an immediately feasible one. Building permanent used selectively and be targeted for results. If we ask capacity needs to start early in the reconstruction process ourselves how did we learn what we know, most of us will and move ahead in parallel with temporary arrangements say that most of the knowledge needed for our work was that enable a quick start to reconstruction. Severai key not acquired in classrooms. This means that we should lessons have emerged from our experience in post- be supporting learning rather than training, i.e., knowledge conflict countries, which are examined one by one below. outcomes rather than learning instruments. We should consider using instruments that provide on-the-job, just-in- First, leadership matters. time knowledge. For example, establishing internet access and email early in the reconstruction process, as Building institutions depends critically upon leadership in happened in Afghanistan, or a distance learning center the key ministries and institutions. Leaders are needed which enables in-country training, are options worth who can articulate a vision for their domain, translate this considering. However, the content offered must be vision into programs and who insist on accountability for relevant to the conditions of a post-conflict country. results. Strong leaders have legitimacy through deep Fifth, training needs to be derined in its strategic roots into society and are respected for their abilities. context Effective leaders have integrity and are able to context communicate their vision, programs and achievements to society. One sign of a strong leader is the ability to attract In other words, learning activities need to be selective and high quality staff and advisors, as well as to be able to focused, and support the government's reconstruction and mobilize funding. development strategy. Destruction of institutional capacity due to war provides an opportunity to eliminate Second, incentives also matter. government departments, government functions and enterprises, and to generally restructure government and It is almost impossible to attract and retain motivated staff the public sector. It therefore makes sense to focus unless there is decent pay for honest work, merit is learning activities on those core functions of government recognized, and selection and promotion are based on that have a future in the post-conflict set-up. The corollary merit, rather than factional or ethnic bias. Getting the is benign neglect for ministries, departments and public basic incentives right ensures that trained staff remain in enterprises that are destined for closure or require major the organization and makes fighting corruption easier. restructuring. Furthermore, learning needs to Creating the right incentives may require a fundamental complement modernization of institutions through the restructuring of the civil service which is difficult in the introduction of modern information and human resources frenetic atmosphere of post-conflict reconstruction. This systems, as well as changes in organizational culture need not be a comprehensive, all at once, affair but may toward outcomes, client orientation and performance entail the creation of permanent islands of excellence as monitoring. the flrst step in a longer-term reform process. Sixth, training should build upon the comparative Third, build on what exists. advantage of international partners. On close inspection, institutions that survive a war may be Different partners of a government have their own areas more resilient than they appear. For example, the system of relative expertise and a government should organize of local government in Afghanistan in many respects capacity building assistance in relation to the comparative survived two decades of conflict. Municipalities in the advantages of its partners. Some organizations are good West Bank and Gaza possessed good administrative and at providing strategic and policy advice, others in technical financial capacity. Also, UN Agencies and NGOs often studies, others in providing training. The challenge for a have the field presence and experience of implementing government is to ensure that all aspects of assistance to humanitarian programs that can be scaled up to build capacity fit together so that the whole is greater than implement government reconstruction programs. This the sum of the parts. may involve a changed role for these organizations, from independent actors to government contractors. Conclusion Fourth, arrange learning activities within country The characteristics of post-conflict countries require that wherever possible. capacity be put in place quickly to meet the expectations of the population for improved living conditions. The Since country capacity is already scarce in a post-conflict international community is also likely to expect quick setting, it does not make sense to remove people from the results, particularly if the consequences of renewed country for training unless this is absolutely essential. conflict spread beyond the country's borders. Well-meaning efforts for training, conferences and seminars can take key people out of the country and slow 3 While there may be situations where it is necessary to Mckechnie, Alastair J. 2003. "Humanitarian Assistance, buy-in capacity, e.g., through contracting services to Reconstruction and Development in Afghanistan: A consulting firms, bypassing government capacity may not Practitioner's View." Conflict Prevention and Reconstnrction prove better at delivering reconstruction outcomes, than Unit Working Papers, No. 3, November. Social building the government's own capacity. New capacity Development Department. Washington D.C.: World Bank. needs to be built on what already exists and may require For some general lessons on rebuilding the civil service: CPR Unit. 2002a. "Rebuilding the Civil Service in a Post- adjustments to be made to the incentives for pubic Conflict Setting: Key Issues and Lessons of Experience." employment as part of a broader program for CPR Dissemination Notes, No. 1, March. Washington, D.C.: administrative reform. Finally, success requires strong World Bank. government leadership and a coordinated effort among On aid management by the recipient government: the donor partners. Schiavo-Campo, Salvatore. 2003. "Financing and Aid Management Arrangements in Post-Conflict Situations." Rebuilding institutions is much more difficult than Social Development Papers: Conflict Prevention & rebuilding damaged infrastructure. Capacity building is an Reconstruction, CPR Working Paper No. 6, June. enormous challenge, a challenge that requires Washington, D.C.: World Bank. imagination, cooperation and hard work among those of On aid absorption in post-conflict: us who seek to improve the conditions of conflict-affected Collier, Paul,and Anke Hoeffier. 2002. "Aid, Policy and Growth countries. in Post-Conflict Countries", processed paper, Development Research Group. Washington, D.C.: World Bank. World Bank. 2003. Breaking the Conflict Trap: Civil War and Development Policy. Washington, D.C.: 157-9. On World Bank support for civil service reconstruction in post- Further Reading on Post-Conflict Capacity Buildingcofitoures conflict countries: For some initial country lessons: PREM. 2003. "Recent Bank Support for Civil Service Rohland, Klaus, and Sarah Cliffe. 2002. "The East Timor Reconstruction in Post-Conflict Countries." PREM Notes, Reconstruction Program: Successes, Problems and No. 79, October. Washington, D.C.: World Bank. Tradeoffs." Conflict Prevention and Reconstruction Unit Working Papers, No. 2, November. Social Development Department. Washington D.C.: World Bank. "Social Development Notes" are published informally by the Social Development Department in the Environmentally and Socially Sustainable Development Network of The World Bank. They are aimed at encouraging discussion and comment among the development community on good practice in social development. SD Notes represent the view of their author(s) and do not necessarily reflect the official policies of the World Bank. This CPR Dissemination Note was prepared by Alastair J. Mckechnie, Country Director, Afghanistan, Bhutan, Maldives and Regional Programs, South Asia Region, World Bank. It is based on a lecture he delivered at UNITAR Inaugural Conference on Training and Human Capacity Building in Post-Conflict Countries, in Hiroshima on November 19, 2003. The Note was also published as Social Development Note No. 88. This CPR note series is intended to disseminate good practice and key findings on conflict prevention and reconstruction. It is edited by the CPR Unit in the Social Development Department of the Environmentally and Socially Sustainable Development Network of the World Bank. The views expressed in these notes are those of the authors and do not necessarily reflect the views of the World Bank Group, its Executive Directors, or the countries they represent. CPR Dissemination Notes are distributed widely to Bank staff and are also available on the CPR website (http://www.worldbank.org/conflict). For additional copies, contact the Social Development Department, The World Bank, 1818 H Street, NW, MSN MC5-507, Washington, DC 20433, USA. Fax: 202-522-3247, E-mail: socialdevelopmentaworldbank.orq. 4