Notes from the Field

What Political Settlements Mean for International Development

August 4, 2010

The impact of international development assistance depends, to a large extent, on the ability and willingness of development actors to factor the political landscape into aid programs. It is not uncommon to hear of carefully conceived development programs, meticulously and thoughtfully designed with ample funding, that have been undermined by powerful local actors with other agendas. This same story is heard across the whole spectrum of development work. Programs that mobilize civil society or grass roots community groups to advocate for pro-poor reforms often fall short when faced with heavy resistance by powerful elite actors. In post-conflict environments, newly established state institutions that are designed with world class technical assistance to reflect state-of-the-art best practice do not function the way they were intended. Even when institutional reforms appear successful at the end of a project, in many cases, within a few years the institutions have become dysfunctional or co-opted by powerful elites.

What all this suggests is that the process of development is fundamentally shaped by powerful political, economic, and security actors in aid-recipient countries. These actors use their influence to shape and control formal governance institutions, policies, and the distribution of development assistance to advance their interests.

The international development community has been grappling with these problems for decades, but in searching for ways to improve aid effectiveness, we have often been looking in the wrong direction. The fundamental problem that undermines aid effectiveness across a broad range of development work is the assumption that poor governance, dysfunctional institutions, conflict, and fragile conditions can be fixed through the transfer of knowledge or technical assistance. The roles of powerful actors who are using their influence to prevent change are typically treated as external to assistance programs or are ignored altogether.

The political settlements framework is a new conceptual approach for international development organizations to better understand and respond to this reality and the challenges that result from political dynamics in developing countries. This framework allows policy-makers and development practitioners to understand how development is driven by competition among elite groups, as an alternative to development approaches that focus on capacity-building or technical assistance. The political settlements concept is particularly relevant for countries affected by protracted conflict or fragile conditions. Political settlements can often be the primary factor in determining the success or failure of statebuilding and peacebuilding efforts.

Focus on political settlements by the international development community raises important questions about the appropriate role of international donors in seeking to influence these internal dynamics. Is it legitimate for international actors to influence political settlements in aid recipient countries? In many contexts, donor assistance already has a significant influence on political settlements, at times strengthening and further entrenching settlements that can be highly exclusionary, destabilizing, or not conducive to development at all. Development assistance programs can create winners and losers in political terms, and the allocation of aid benefits can be heavily influenced by the political interests of those in power. By ignoring these problems, we may be contributing to corruption, impunity, and weak government legitimacy, and slowing down the process of change.

There is a critical need to develop a set of parameters or limits on what is an acceptable level of influence by international actors in the political settlements of aid-recipient countries. Influencing political settlements does not mean manipulation of local politics, or instigation of regime change. But without clear definitions and limits, the line between legitimate levels of influence and sovereignty infringement can become blurred, and the conduct of international development actors will be called into question.

In a new paper, published as part of The Asia Foundation’s “Occasional Paper” series, we help translate these concepts into principles, strategies, and guidelines for action by donors and other development assistance organizations. This paper – “Political Settlements: Implications for International Development Policy and Practice” – presents a set of practical approaches for international development organizations to improve their positive influence on political settlements. These approaches illustrate the variety of ways in which development assistance can be designed or modified using the political settlements framework to improve development outcomes. While the long-term objective may be to support inclusive, stable, and developmental political settlements, the path to this ideal may be necessarily circuitous. Development organizations may need to adapt their strategies to promote the best-case scenario in the short term, while investing in long-term programs that will promote inclusiveness, development, and stability.

Download the full paper.

William S. Cole is The Asia Foundation’s Senior Director for Governance, Law, and Civil Society. Thomas Parks is The Asia Foundation’s Regional Director for Conflict and Governance based in Thailand. They can be reached at bcole@asiafound.org and tparks@asiafound.org, respectively.

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