An outdated set-up

The UN Development System (UNDS) consists of various UN agencies that are active in development. It grew and evolved over the past six decades. The UN Charter did not make any specific provision for the UNDS. Rather, it emerged as a response to the demand of poor countries for a greater control of aid. The reason was that official development assistance (ODA) was channelled initially through bilateral agencies or the World Bank. Either way, the donor countries were in control.

The governments of developing countries considered the UN a multilateral counterweight to the World Bank and the rich nations in general. Accordingly, they wanted the UNDS to serve as a channel of funding without conditionalities, geared to the more equitable geographic distribution of resources. In practice, however, the UNDS tended to be more engaged in technical than in capital assistance, which remained the main concern of the World Bank.

Today, there are nearly 40 specialised UN agencies, funds and programmes. Together, they disbursed $ 22 billion in 2008, with about one half of this sum serving humanitarian purposes.

No feedback from the field

The North-South confrontation within the UN that originally spawned the UNDS has more or less disappeared. Nonetheless, many governing councils of UN bodies seem to be stuck in a post-colonial mindset. This mismatch has several reasons. The most important are:
– The governing councils are highly politicised. Developing countries are typically represented by diplomatic staff who belong to their nations permanent missions in New York and Geneva. They tend not to have much experience in development, not even in their home countries.
– Debate in the UNDS context tends to focus on the quantity of resources and on organisational and staffing arrangements, instead of in-depth discussion of relevant patterns in the bigger development picture. There is very little discussion of technical issues and very little feedback from experience.

Today, only about one quarter of UNDS funds are core UN resources and thus genu­inely multilateral aid. Most of the core resources are channelled through only five UN bodies (UNDP, UNICEF, WFP, WHO and UNFPA). Over a third of the core resources, moreover, is supplied by the Nordic countries, giving them a greater voice in the UNDS than other donor countries.

The non-core funds come partly from donor countries and partly from developing countries. In both cases, the money is earmarked for specific projects and programmes. Such utilisation of the UNDS for implementing various measures has led to a dramatic change in its character. To a large extent, the UNDS has thus been bilateralised. After all, disbursements are conditional on the requirements of those who provide the money.

An underestimated achievement

The most important reason for various governments’ implementing policies through the UNDS is the UN Field System (UNFS). The UN has built itself a strong infrastructure in the developing countries. However, this achievement only gets very little explicit recognition. The UNFS mostly consists of staff hired locally in the host country at much lower remuneration than the international civil service. Ninety per cent of the staff of the UNFS are national personnel. They typically are at the front line of developmental and humanitarian activities.

Donors and developing countries that entrust non-core funds to the UNDS do so because of the proven strength of the UNFS in implementing projects and programmes. Sadly, however, the governing bodies of the UNDS hardly pay attention to the UNFS. This is a pity because the UNFS could still be improved. Better recruitment and training patterns could contribute to help poor countries boost administrative and technical capacities in government bodies.

Many things have significantly changed in the global arena since the UNDS began to emerge 60 years ago. There are new multilateral actors outside the UN System, including the EU, the Global Alliance for Vaccines and Immunisation (GAVI), the Consultative Group on International Agricultural Research (CGIAR) and others. Many of these bodies are quite influential and have reduced the significance of the UNDS.

Change also occurred on the side of aid-recipients. UNDS core resources are now largely concentrated on a smaller number of countries, mostly in Africa. Asia and Latin America have become minor recipients of UNDS core resources.

Of course, many of the challenges listed in this article have long been recognised by UN member governments as well as by researchers. The solutions offered so far, however, fall short of what is required.

The single most accepted approach to reform is that UN activities need to become better coordinated at the field level. A common catchword is “Delivering as One” or “DAO” for short. The idea is to have a UN resident-coordinator in any given country, and this person would manage a resource pool contributed by various UN bodies. But even if such resources are pooled, they will still be relatively small compared with what the World Bank, other multilateral development banks or the EU have at their disposal.

The truth is that the UN was effective at the field level in the past in spite of lacking UNDS coordination. What efficiency and effectiveness really depend on is how UN bodies interact with their national and local counterparts. For this reason, the WHO and UNICEF tend to perform better than other UN bodies. They have built technical and professional relationships with ministries of health at the national level.

Revisiting the UNDP

In comparison, the UNDP has been less effective. It does not have this kind of special relationship with line ministries. Its more general relationship with ministries of foreign affairs and finance has made it irrelevant for most practical purposes in many countries. Unsurprisingly, the UNDP now puts more emphasis on field level coordination of the UNDS than UNICEF does. The UNDP is not as important anymore as it was when it still served as a central funding agency for other UN bodies. There are several ways to improve the performance of UNDS, but greater coordination within the UNDS is certainly not the crucial issue. It would make more sense to distinguish between different kinds of functions.

UN bodies have both normative functions (such as setting standards, facilitating global and regional agreements or providing globally comparable statistics) and operational functions. Typically, every UN body tries to serve both functions. Whether that makes sense, is another question. Indeed, some UN bodies should focus on operational tasks and others on norm setting.

Consider the FAO and UNIDO, for instance. In the current global development context, the private sector is playing the key role in trade, investment and technology transfer. Accordingly, there is no particular need for the FAO and UNIDO to engage in country-operational tasks in agriculture and industry, while they can be quite useful as global monitors and norm-setters.

At the same time, it is striking that the UN does not have a specialised body to deal with governance issues. The reason, of course, is that until quite recently, the UN as well as the World Bank kept away from matters that were considered political such as democracy, the rule of law, human rights et cetera. The idea was that multilateral institutions did not have a mandate to interfere in domestic issues.

Times have changed, and UN bodies now increasingly engage in electoral reform, elections, rule of law issues et cetera. They are working on enhancing the capacities of national police systems, strengthening parliaments, sub-national authorities and many other related areas. The UNDP should transform itself into the UN agency for tackling these matters and give up trying to gain a coordinating role for issues that really are not closely related.

Governance is an expanding field for development agencies. It deserves a glo­bal institution that could offer support to developing countries. Especially because these issues are of a political nature, a UN body could tackle them with more legitimacy and credibility than the donor-dominated institutions like the multilateral development banks or bilateral agencies.