Statebuilding in Conflict Affected and Fragile States: Comparative Study:
Statebuilding in Conflict Affected & Fragile States: A comparative Study -
Public Finance and National Accountability in Timor-Leste and Afghanistan
In conflict-affected or fragile states there is often a significant gap between what the state is able to deliver and what the citizens of that state, as well as international partners, expect the state to deliver. This problem stems in part from international partners focusing heavily on what should be delivered and not enough on how best to deliver it in that particular context. To examine this idea further, the g7+ Foundation has commissioned two initial case studies to try and bridge the gap in understanding and to enable governments to see what has and has not worked in comparable countries. These case studies are intended to give governments and their international partners a clearer understanding of how best to achieve meaningful reform in such countries.
This paper, using the two case studies of Timor-Leste and Afghanistan, looks at the experience of state building in the area of public financial management (PFM).
Progress in implementing the New Deal
The case studies demonstrate how the evolution of the Ministry of Finance (MoF) in both countries has led ministers to similar conclusions about the real challenges they face and about what works in building sustainable and robust national systems of accountability. The experience over the last decade or more is that state building as an explicit goal has largely been side-lined in practice by both governments and donors. The goal of using the national budget as the primary tool of development policy has fallen out of favor in many development circles.
Establishing systems for PFM in conflict-affected or post-conflict fragile states is challenging, to say the very least. There might be on-going conflict, but even if not, the shadows of conflict – mistrust, trauma, and chaos – are almost certainly present. The result of bypassing country systems and the annual budget process is usually large- scale fragmentation. Both a “projectization” of the national development effort and an unintentional undermining of state legitimacy in the eyes of the citizenry occur. Ignoring the importance of building legitimacy of the state means that newly elected governments are often saddled with a fragmented budget that is already locked into the donor project cycle and priorities, which are often not responsive to the government’s national priorities.