The following post is co-written by Sandra Sequeira, Professor of Development Economics at the London School of Economics and visiting scholar at DRI, and Christian Schornich, who works for the United Nations.
The proportion of aid channeled through the UN system shrank from ten percent to five percent over the last eight years. And yet the UN’s massive bureaucratic machinery is not being downsized accordingly. In fact, a complicated web of programs and agencies with a whopping 7,000 overlapping mandates—sometimes even working at cross-purposes— have in recent decades defied numerous bouts of reform.
Three years ago, the UN launched a new initiative entitled “Delivering as One,” meaning that in each country there would be one leader coordinating all agencies in the field, one budgetary framework, and one operational support system. The goal was to increase efficiency, cut waste and pass on administrative savings to programs. Eight countries from Mozambique to Cape Verde volunteered to pioneer this reform. While cutting the fat out of the UN system is a commendable goal, a deeper issue failed to make it to the discussion table: should reform only represent a centripetal force towards becoming one, or a centrifugal force that propels multiple agencies to compete in the market for aid and justify their relevance?
Since the beginning of “Delivering as One,” no departments have been merged and not a single program has been cut. Three years into the process, administrative savings are yet to be calculated because there is no budgetary framework that clearly accounts for the overhead costs of the different agencies and programs.
There is a real danger that the search for “Oneness” has already become just another episode in a series of floundering reforms, where “harmonization” and “integration” really mean covering up inefficiencies and keeping underperforming agencies and programs afloat. But here’s an alternative: the UN could seize the opportunity to rethink its mandate based on its comparative advantage in the current market for aid, and stick to it.
What would happen if the UN stopped thinking of itself as a world government in the business of only providing public goods, where cost-effectiveness is not necessarily the bottom line, and started thinking of itself as an organization actively competing with other agencies in the market for aid? The landscape of aid agencies has changed dramatically since 1945—the UN is now forced to compete against McKinsey when providing technical support to Latin American governments, with the Gates Foundation when fighting HIV/AIDS in Africa, and with the US military when building schools in the foothills of Afghanistan.
The aid market is segmented by fields, and competition varies significantly across them. There are “natural monopolies” which require agencies like the UNHCR to secure the rights and well-being of refugees across political borders, UNRWA, the International Atomic Energy Agency, the International Court of Justice or the WTO. In these fields, a UN monopoly is justified by the high political and fixed costs of setting up an inter-governmental cooperation mechanism, by decreasing marginal costs of providing the service, and by positive network effects.
Other agencies like the United Nations Industrial Development Organization (UNIDO) and the United Nations Development Program (UNDP) operate in highly competitive markets. In more extreme cases, the UN even competes against itself via the International Fund for Agricultural Development (IFAD), the Food and Agriculture Organization (FAO) and the World Food Program (WFP); the United Nations Development Fund for Women (UNIFEM), the Joint United Nations Program on AIDS (UNAIDS), and the United Nations Population Fund (UNFPA); the United Nations Conference on Trade and Development (UNCTAD) and the International Trade Center (ITC), among others.
The UN’s search for comparative advantage could be compared to a government deciding which services to provide directly and which services to privatize. Areas in which the benefits of competition can be high through the creation of incentives to deliver high-quality services at the lowest cost possible are prime fields for “privatization.” In these segments of the market for aid, the UN could act as the “aider of last resort” instead of a frontline participant. This would mean specializing in areas in which there is a clear need for large-scale interventions, but where no private corporations, NGOs, civil society or development consulting agencies dare to go. While this would be the path less traveled, it may be the only one that leads to meaningful reform.
8 Comments
Well, bear in mind that there are only a few One UN pilot countries, and three years is not very long in the context of development programmes: funds may have been committed for three – five years that need to phase out before truly joint programmes are possible.
Singularity of budgets and single policy frameworks (UN Development Assistance Frameworks, UNDAFs) are the first stage in the way to greater integration. It may well be that the reform programme doesn’t work as well as hoped. But three years isn’t nearly long enough to judge institutional reform, particularly of an institution as complex as the UN is. Change will take time, as the role and function of each agency needs to be clarified.
Further, some UN country offices are using ‘joint programmes’ already, which bring together all the UN agencies active in country into a single planning and execution process. These have not been rolled out because their effectiveness needs to be assessed first.
It’s clear the UN needs to clean up the way it works, but Delivering as One is at least a step in the right direction; at a time when plenty of other donors are not reforming their own weak spots.
(having said that in defence of the UN I am in favour of rationalising down to 3 agencies: UN Humanitarian; UN Development; and UN Capacity Building; Alongside this, there is peacekeeping work and the political functions, which operate differently).
A very good article. Indeed, the drive for “basket funding” per UN-country system in the “delivery as one” context has this vicious effect that it gets increasingly difficult to reward efficiency. Moreover, a donor country tends to champion its pet agency, stimulating them for mission creep through indiscriminate core funding. Nearly every overlap in the system was mandated by the donor group and sanctioned in consensus by the general assembly.
As long as the ” Paris Agenda” and the ” Good Humanitarian Donorship” agenda stay in force, aid-efficiency will be defined as giving ” flexible” aid. This means in practice that the big players, governments, World Bank or agencies, can decide on the allocation of funds with only an aggregated accountability, meaning a diluted and unattributable accountability.
The key might be: first do no harm: allocate only funding where an agency has a core mandate and the UN-system has an added value.
UN-Mandates
A separate post because of a separate discussion.
The basis of the UN action in humanitarian action and development are individual values. These values stand on their own: child protection should not be traded against anti-corruption. Separate agencies were created exactly for guaranteeing that, if push comes to shove, everything should not end up in a vague mush, with ” cozying up tot the powers that be” as the overarching operational guideline.
The whole ” delivering as one” agenda, if it means programmatic coherence, ignores the fundamental reason the UN-system exists. I strongly disagree to fusion the agencies to a higher level where every content disappears to vague, undefined objectives like development, capacity building or humanitarian. I would rather be sure somebody will speak up for child rights, rights of refugees, rights of women, etc.
However, when delivering as one would mean using the same forms and procedures for every action, from procurement to staff hiring over project acceptance, I am all in favor of it. There is even a very good case to make to have a joint UN-back-office, with mostly outsourced functions.
There is no doubt that the eight pilot countries have achieved remarkable results in the short time into the ‘Delivering as One’ initiative. Joint Programmes have been successfully established , which significantly increased inter-agency coordination at the country level. Joint Programmes aim at bringing the capacities of different agencies together, creating more than just the sum of many outputs of individual players. This integrative approach includes reaching out to the non-resident agencies, which might not have a permanent presence in the country, however could contribute with their specific expertise.
Through ‘Delivering as One’, the UN opted for a reform initiative that follows the principles of greater harmonization between the UN institutions and integration of programmes into one common framework. While this has not been questioned as a step towards greater efficiency and a reduction of transaction costs, the article points out that the UN reform process is well underway without necessarily prioritizing the obvious: the existence of a very large number of agencies, funds and programmes with partly overlapping functions.
The thought provoking argument is that the integrational reform approach of ‘Delivering as One’ might attempt the impossible: a well functioning cooperation amongst too many players in an increasingly competitive market. This might include integration of UN institutions that, as isolated actors, would not necessarily survive in the search for donor funding. The increasing number of un-earmarked donor contributions through funds could further contribute to this integration of all.
I find the UN to be a fascinating beast. They are very good at convening meetings and encouraging discussion and lousy at implementation. I would argue that they should focus only on their “natural monopolies” and the role of overall in-country coordination of donors. Why bother having a UN agencies implementing programs in “highly competitive markets?” There are plenty of national and international implementers available to do that work.
The UN’s core value is that of a convener. It should retain its agenda-setting function for development but be forced to withdraw completely from implementation. This could be achieved either through market forces (which may be a question of time since no UN agency that I have worked for in the past would be able to compete with large INGOs or some small but highly specialized NGOs) or through pressure by high profile constituents.
The key challenge is that the UN as an organization (rather than an institution) has no incentive to weaken its strategic position in the practice of development assistance. Too many entitlement-driven international livelihoods depend on its current structure. Its lack of specialist staff and its abundance of overpaid “generalists” (especially at its global and regional headquarters) therefore need to be broken up externally. Internal disincentives against cohesion and greater efficiency are too strong to allow for radical change from inside.
What Japan did to UN-ESCAP in Bangkok a couple of years ago shows the way forward. Its refusal to contribute to the budget really shook the organization and led to a large-scale evaluation. The results weren’t pretty. Many member states felt that ESCAP added little value other than as a meeting venue and final destination for winnowed civil servants. At the same time, this experience also illustrates the limitations. A new head of the organization was appointed, but little has changed in terms of operational procedures. And of course, it’s still the same people in the same building.
Over time, I believe we can expect a decreasing role of the UN in international development affairs, which is positive news. Yet a key question is to what extent this result can and should be forced politically or left to develop by itself, through market forces. Since millions of lives are at stake, it seems to me that a political approach is warranted both ethically and economically.
Dear All,
Aid Watch is fast becoming one of the most relevant of online discussion fora.
Constructive, albeit highly theoretical, commentary like this is much more inclusive than the polarised commentary one usually encounters wrt the UN. The UN is not rotten, but it is afflicted by nepotism, mediocrity, lack of transparency/accountability, and disorganisation. The attendant issues of poor implementation, public/beneficiary disillusionment, lack of tactical/strategic coherence, and disarticulation of programmes AND agencies may be said to be symptomatic.
Equally, having ethical benchmarks sounded out by a multilateral institution is really helpful in fragile, fractious, and phenomenol contexts.
I really hope Bill & Co. explore this ‘basket’ of issues – the UN. It’s worth much more in-depth examination.
JB
Many thanks for all your insightful comments.
Ranil, in this post our goal was not to evaluate the performance of the “Delivering as One” program so far but to highlight the fact that it only addresses one side of the problem: the operational inefficiency arising from the lack of coordination between UN agencies in the field. “Delivering as One” does not however address the deeper structural inefficiency of the UN: the fact that it is trying to juggle far too many mandates instead of specializing according to its comparative advantage in response to an evolving market for aid.
Our understanding is that the results achieved by the joint programmes have also been quite mixed, sometimes even leading to an overall increase in costs and even more cumbersome operational procedures.
Thanks Sam for casting the spotlight on the donors and on the role they play in promoting the duplication of mandates and programmes at the UN. Both you and Daniel stress the importance of political economy constraints for this type of reform to take place: neither the donors nor the UN’s bureaucracy have an incentive to streamline the organization and close down inefficient programmes and agencies. Under these circumstances, perhaps a combination of political and economic forces would be in order?