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Managing Risks in Fragile and Transitional Contexts

The Price of Success?

image of Managing Risks in Fragile and Transitional Contexts

From the anarchy of Somalia to the relative stability of Nepal, fragile and transitional situations represent a broad spectrum of contexts. However, they share some common features: these are risky environments – for the people who live there, for their governments, for neighbouring countries, and for those who seek to provide assistance. Positive outcomes are hard to achieve and the risk of regression in countries emerging from armed conflict is high.

International engagement in these situations presents significant risks for donors and implementing partners, but also holds the potential for substantial rewards in terms of improved results and outcomes. Indeed, more often than not, the risks associated with not engaging in these contexts – both for the countries themselves and for the international community – outweigh most of the risks of engaging in the first place. The question therefore is not whether to engage but how to engage in ways that are context-specific and do not come at an unacceptable cost.

This publication provides the evidence to help donors understand how to balance risks and opportunities in order to protect the integrity of their institutions while delivering better results to those who need it most.

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Approaches to managing risk in fragile states

Chapter 3 reviews current approaches to risk management in fragile and transitional contexts. It looks first at institutional approaches, including several case studies of donors that have set up specialised units to operate in contexts where standard development approaches would be too limiting. It finds that specialised units like these can provide leadership and a responsibility focal point for more risky activities. They can also keep the public and political decision makers informed about progress and set-backs on a very regular basis, so as to create buy-in.

The chapter then moves on to consider the two most important kinds of aid in fragile situations: financial support and technical assistance. It finds that transition financing mechanisms are needed that enable flexible and rapid responses to a wide variety of needs and opportunities and reviews the different types of funding arrangements that are possible. These include funds set up especially for fragile situations; pooled funding arrangements that help donors share and spread their risks; and budget support so that donors can align their efforts with existing partner country mechanisms.

English

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