Innovative aid instruments and flexible financing: providing better support to fragile states

There has been growing awareness in the international community that low-income countries with fragile institutions are not just a more difficult case for delivering aid, but require a fundamentally different approach.

Keeping these challenges in mind, the paper looks at the importance of the following issues relating to aid in fragile states:

• Country context and the mix of aid instruments
• Specialised aid practices for all fragile states
• Speed and flexibility of aid
• Good practices for using government systems – with safeguards if required
• Good practices when not using government systems – aligning aid with the budget
• The need for predictable, sustained financing
• Transparency, results, accountability and value for money.

  Prepared in the first half of 2011 for the OECD International Dialogue on Peacebuilding and Statebuilding, this paper reflects the state of the literature and the international discussion as of June 2011.