State Capacity and Non-state Service Provision in Fragile and Conflict-affected States
Author: R Batley and C Mcloughlin
Access full text: available online
How can governments effectively engage with non-state providers (NSPs) of basic services where capacity is weak? This paper examines whether and how fragile and conflict affected states can co-ordinate, finance, and set and apply standards for the provision of basic services by NSPs. It explores ways of incrementally engaging the state, beginning with activities that are least likely to do harm to non-state provision.
Through the ‘indirect’ roles of setting the policy environment and engaging in policy dialogue, regulating and facilitating, contracting, and entering into mutual and informal agreements with NSPs, the state can in principle assume responsibility for the provision of basic services without necessarily being involved in direct provision. But government capacity to perform these roles is constrained by the state’s weak legitimacy, coverage and competence, lack of basic information about the non-state sector, and lack of basic organisational capacity to form and maintain relationships with NSPs. The experience of the exercise of the indirect roles in fragile settings suggests:
- Governments may be more willing to engage with NSPs where there is recognition that government cannot alone deliver all services, where public and private services are not in competition, and where there is evidence that successful collaboration is possible (demonstrated through small-scale pilots).
- The extent to which engagements are ‘pro-service’may be influenced by government motives for engagement and the extent to which the providers that are most important to poor people are engaged.
- Formal policy dialogue between government and NSPs may be imperfect, unrepresentative and at times unhelpful in fragile settings. Informal dialogue - at the operational level - could more likely be where synergies can be found.
- Regulation is more likely to be ‘pro-service’ where it offers incentives for compliance, and where it focuses on standards in terms of outputs and outcomes rather than inputs and entry controls.
- Wide scale, performance-based contracting has been successful in delivering services in some cases, but the sustainability of this approach is often questioned. Some successful contractual agreements have a strong informal, relational element and grow out of earlier informal connections.
- Informal and mutual agreements can avoid the capacity problems and tensions implicit in formal contracting but may present problems of non-transparency and exclusion of competition.
Paradoxically, the need for large-scale approaches and quick co-ordination of services in fragile and conflict-affected settings may require ‘prematurely high’ levels of state-NSP engagement, before the development of the underlying institutional structures that would support them. When considering strategies to support the capacity of government to engagement with NSPs, donors should:
- Recognise non-state service provision and adopt the ‘do no harm’ principle: It would be wrong to set the ambition of 'managing ‘ non-state provision in its entirety, and it can be very harmful for low-capacity states to seek to regulate all NSP or to draw it into clumsy contracts.
- Beware of generalisation: Non-state provision takes many forms in response to different histories and to political and economic change. The possibilities and case for state engagement have to be assessed not assumed. The particular identities of NGOs and enterprises should be considered.
- Recognise that state building can occur through any of the types of engagement with NSPs: Types of engagement should therefore be selected on the basis of their likely effectiveness in improving service delivery.
- Begin with less risky/small scale forms of engagement where possible: State interventions that imply a direct controlling role for the state and which impose obligations on NSPs (i.e. contracting and regulation) require greater capacity (on both sides) and present greater risk of harm if performed badly than the roles of policy dialogue and entering into mutual agreements.
- Adopt mixed approaches: The choice between forms of engagement does not have to be absolute. Rather than adopting a uniform plan of engagement in a particular country, it may be better to try different approaches in different regions or sectors.
Access full text: available online
Batley R., Mcloughlin C., 2009, 'State Capacity and Non-state Service Provision in Fragile and Conflict-affected States', GSDRC Issues Paper, Governance and Social Development Resource Centre, Birmingham