International Network for Economics and Conflict

This is a guest post by development economist and senior Afghanistan expert at USIP, William Byrd. For a more comprehensive of the subject, see his Peace Brief on the subject.

“Mutual accountability” is the cornerstone of the Tokyo Declaration of July 8. Donors agreed to provide a very large amount of civilian aid to Afghanistan ($16 billion over four years, or $4 billion per year on average), and to improve the effectiveness of aid by over time putting more (50 percent) of total aid through Afghan budget channels and aligning most (80 percent) with Afghanistan’s priorities as embodied in the National Priority Programs. The Afghan government committed to taking a number of actions and achieving associated outcomes/results, primarily in governance and political spheres. The outcome of the Tokyo meeting exceeded expectations in terms of funding indicated by donors and conditions agreed to by the Afghan government, but making mutual accountability work will be a major challenge.

“Conditionality” has become a dirty word in some quarters, but it is a form of mutual accountability—a government commits to taking certain actions (typically policy reforms of various kinds), and the international partner commits to providing funding in return. There are hard-learned lessons from application of conditionality during the three decades since the 1980s; mistakes made have prompted changes in approaches. The World Bank has developed a set of good-practice principles emphasizing ownership, harmonization, customization, criticality and transparency and predictability. 

Some concrete lessons from experience with conditionality include:

• A reform constituency in the country is essential to leverage conditions and push reforms seen as necessary for the country’s progress; otherwise political will for meaningful reforms will be lacking.
• Objectives and targets cannot be overly ambitious but rather need to be achievable and build momentum of reforms.
• A degree of flexibility and responsiveness to unexpected developments needs to be built in.
• Conditionality should involve only a few essential targets/benchmarks—otherwise the reform effort will lose focus.
• A medium-term perspective and reform framework is important.
• Dialogue is key—the process of collaboratively developing a reform program tailored to individual country circumstances, agreeing on triggers and benchmarks, and following up on implementation can be very beneficial.
• There are also technical design issues, such as ex-ante versus ex-post provision of funding, how to balance incentives for reform actions with predictability of financing, whether to do a series of separate operations or a single multi-tranche operation, etc.

Afghanistan over the past decade has seen numerous reform agendas, benchmarks and commitments on the part of government and donors, reflecting the multiplicity of donors and the plethora of high-profile international meetings since 2001.

The mutual accountability framework promulgated at Tokyo clearly reflects learning from earlier experience. There are 20–plus benchmarks for the government in five main areas, far fewer than in the Afghanistan Compact of 2006 (which had well over 100 benchmarks). There is a long-term perspective—the “decade of transformation” (2014–2025), and the responsibilities of Afghanistan and the international community are clearly set forth and demarcated. Nevertheless, there are major issues and challenges for the future.

First are inherent problems of mutual accountability, which implies layered dual accountability of both government and international partners. Each side is accountable to the other party in the Tokyo framework but also to their own constituencies/citizens.

On the international side, the multiplicity of donors means there is fragmented accountability—this could adversely affect coherence around targets and enforcing benchmarks, as well as the ability of the international community to be meaningfully held accountable for total funding, particularly given severe fiscal constraints faced around the world. Coordinated programs and funding will be essential, but is it realistic to expect most aid to go through the Afghan government budget/trust funds?

For the Afghan government, uncertain political and security prospects raise doubts about its ability to meet commitments. The reform constituency may be weakening; there has been an inability to fully address issues where high-level political connections are involved (e.g. Kabul Bank); and more generally, the political will needed for meaningful reforms understandably may decline as the security transition proceeds and the next election cycle approaches.

Second, it is doubtful whether major political issues can be adequately handled through an articulated mutual accountability framework with benchmarks and calibrated financial incentives — which is better suited to more technical conditions without large overt political ramifications. Other mechanisms, such as that set up to oversee implementation of the Strategic Partnership Agreement between the Afghan and U.S. governments, may be better suited for handling such “big-ticket” issues.

Third, the figure for total civilian aid agreed at Tokyo is ambitious and exceeded expectations—particularly since it is in addition to large security sector assistance agreed at the Chicago NATO Summit in May. Inability by the international community to deliver this level of funding could provide a justification for the Afghan government failing to achieve its benchmarks, and mutual accountability could degenerate into each side accusing the other of not delivering on promises, rather than working as a framework with incentives to achieve positive results and improve behavior on both sides as intended.

Finally, how will achievement of benchmarks be monitored and enforced? As indicated in the Tokyo Declaration, the specifics of modalities, timelines, etc. remain to be worked out. Given past experience, there are doubts about how well the Joint Coordination and Monitoring Board process (mandated to oversee implementation), and the series of further high-level meetings agreed at Tokyo, will work. Declining aid for Afghanistan means the funding lever potentially will be stronger than in the past, but it is not clear whether and how effectively it can be deployed given donor fragmentation and that some funding (e.g. for Afghan security forces) is seen as an integral part of international drawdown strategy and hence will be difficult to hold back.

While the outcome at Tokyo has exceeded expectations and hence was a success, the challenge henceforth will be implementation.  Afghanistan's Presidential Decree of July 21, which intended to galvanize the Afghan government to take a disparate set of actions in coming months, illustrates the complexities and difficulties involved.  The sheer number of actions called for (over 150 of them, by 32 different ministries and agencies), the ambitious deadlines (as little as one month for some actions, with most in the 3-6 months range), the enormous amount of paperwork requested (in the form of numerous reports and plans etc.), and the lack of specified sanctions for non-performance, raise serious questions about implementation.