Development Co-operation Report 2023

12. In focus: Enablers of locally led development

Mayanka Vij
OECD

Abstract

Increased reliance on local partners for programme delivery during the COVID-19 crisis and a focus on redressing North-South power imbalances in development co-operation have rekindled interest in localisation. To date, however, there is no commonly accepted definition of localisation and while there are many good examples, a stronger evidence base on the benefits and challenges of locally led development co-operation is needed to inform next steps. Drawing on DAC peer reviews, discussions with DAC members and the wider literature, this case study argues that current ways of working will need to be adjusted if they are to be more conducive to localisation, including in terms of financing and operational practices, anticipating and mitigating risks, and actions that balance power relations with partners.

Key messages

• The COVID-19 pandemic forced development co-operation actors to rely primarily on local actors and this, alongside an increasing focus on redressing racism and power imbalances in the aid system, is driving a renewed push for localisation.

• Development co-operation providers are seeking to localise their practices - with a view towards long-term sustainability - by promoting local actors’ perspectives, priorities and preferences.

• To be able to rely more on local partners, development agencies need to adjust how financing is provided and managed, build relevant institutional capacities internally, and identify and recalibrate power imbalances in partnerships.

• Development co-operation providers should consider developing a shared understanding of localisation based on a robust evidence base.

The objective of localisation is grounded in a range of justifications – normative (aid recipients should set their own priorities); instrumental (a quicker and more effective and efficient response to development issues); and emancipatory (referring to the need to adjust structural power imbalances in the sector) (Brown, Donini and Knox Clarke, 2014[1]; Boateng, 2021[2]). Most actors in the development community commit to these objectives and justifications and just recently, at the Effective Development Co-operation Summit in December 2022, 15 Development assistance Committee (DAC) donors endorsed a statement specifically supporting locally led development (USAID, 2022[3]). However, there is no shared definition of localisation. Nor are there guiding principles or a collective sense of whether it is a method, an outcome or both.

While calls for development co-operation to be more localised are not new, two crucial recent contextual drivers are responsible for its re-emergence on policy agendas. First, compounding global threats (the COVID-19 pandemic, rising inequalities, the climate crisis, food insecurity and war) disrupt traditional aid delivery models. Development co-operation providers have had to adapt to radically altered settings and move beyond incumbent ways of working, relying increasingly on local knowledge, capacities and access, especially during and after the pandemic (OECD, 2020[4]). Second, demands for decolonising development highlight a pressing need to address underlying power asymmetries that impede local leadership.

Stronger evidence on the benefits and challenges of locally led development is needed

For the purposes of this case study, localisation is understood as a process that drives effective development co-operation by recognising, respecting and empowering the ownership, agency and knowledge of local actors, both state and non-state, to achieve sustainable, locally led and inclusive development outcomes. While this case study uses the term localisation, other terms – such as locally led, participatory, bottom-up and community-led development – generally speak to similar objectives.

Localisation has a long history, with roots in the push for participatory approaches beginning in the 1960s (Mansuri and Rao, 2013[5]), the aid effectiveness agenda’s ownership and alignment principles from the early 2000s (OECD, 2005[6]), and subsequent Grand Bargain localisation commitments in 2016 (Inter-Agency Standing Committee, 2016[7]). Over this period, there have been many good examples of localisation in practice (Baguios et al., 2021[8]). At the same time, differences in interpretations of the objectives and practice of localisation make it difficult for development co-operation providers to coalesce around a shared vision that would enable co-ordination between providers and accountability for results. There also appears to be what Mitchell (2021[9]) called a state of “functional inertia”, where development actors are aware that localisation is needed but are unable to operationalise their vision. In addition, there is a specific need for evidence on the benefits and challenges of different approaches to localisation, including how development agencies' and ministries’ institutional practices may either enable or hamper the achievement of locally led and inclusive development outcomes. Collectively building such an evidence base during this phase would help inform individual agency practice to push past the inertia. It would also develop a shared understanding of localisation as both a process and an outcome, which could be used as a basis for accountability that all stakeholders accept and see themselves reflected in.

Regardless of their interpretation of localisation, all providers can focus on three areas: financing practices, institutional frameworks and more equitable partnerships, informed by a thorough political economy analysis.

Long-term core funding is more likely to foster sustainable outcomes and local ownership

Sustainable development outcomes require a predictable and flexible approach with a long time horizon. Project-based funding can undermine local actors’ genuine autonomy and signals a prioritisation of short‑term outputs over long-term outcomes. To stay competitive in a constrained financing environment, local actors are compelled to keep overheads low. This comes at the cost of long-term sustainability; strengthened staff capacities, retention and security; and collective local action and inhibits local actors’ ability to be independent, self-reliant and collaborative partners. In contrast, core funding aligned with local partner priorities would enhance autonomy and sustainability. Reflecting members’ collective recognition of the importance of a flexible and long-term approach, the DAC Recommendation on Enabling Civil Society in Development Co-operation and Humanitarian Assistance calls on adherents to “promote and invest in the leadership of local civil society actors in partner countries or territories by … increasing the availability and accessibility of direct, flexible, and predictable support including core and/or programme‑based support, to enhance their financial independence, sustainability, and ownership” (OECD, 2021[10]).

It can be argued that localisation creates perverse incentives to treat local capacity as a cheaper means of reaching donors’ predesigned goals rather than building a political, social and economic environment where locally designed solutions and resilience priorities can emerge and be supported.

Localisation could also increase cost-effectiveness by circumventing intermediary actors such as international non-governmental organisations and private contractors and prioritise working with local actors directly (Van Brabant and Patel, 2018[11]). By the same token, it can be argued that localisation creates perverse incentives to treat local capacity as a cheaper means of reaching donors’ predesigned goals rather than building a political, social and economic environment where locally designed solutions and resilience priorities can emerge and be supported (Barbelet et al., 2021[12]).

Localisation also calls for support for diverse partnerships tailored to local conditions

Localisation calls for trust and consistent support for a range of partnerships, including with state actors. For instance, Iceland’s bilateral development co-operation strategy is effective thanks in large part to its long-term, locally aligned approach. The formal district co-operation programme in Malawi (Mangochi Basic Services Programme) grew out of its successful project-based collaboration in 2012. Iceland’s on‑plan and on-budget alignment with district development plans, harmonisation with national government efforts, and an 11-year and still ongoing commitment contributed to the Mangochi District Health Office being ranked the best health office in 2019, 2020 and 2021 (Government of Iceland, 2022[13]).

Localisation not only requires higher investments in the short run to nurture sustainable outcomes in the long run, it also requires recognising that effective local ownership and engagement might not be easy to cultivate (Mansuri and Rao, 2013[5]). There are trade-offs between speedy implementation and extensive local tailoring of interventions (Cooley, Gilson and Ahluwalia, 2021[14]) as well as between high short-term costs and long-term sustainability. Development co-operation providers must be clear about which trade‑offs they are willing to accept.

Providers need to reframe risks, shift institutional culture and build internal capacities

A challenge for Grand Bargain signatories is that localising effectively requires making radical changes in their institutional operations and policies (Grand Bargain Localisation Workstream, 2019[15]). Standard risk mitigation practices can restrict local actors’ access to funding or act as barriers to their entry. Limited staff capacity (both absolute capacity and skills) to work effectively with a large number of local partners is a key constraint. This has led to the emergence of alternative mechanisms, such as working through intermediaries (usually established implementing entities) that mitigate risks by assuming financial accountability for procurement contracts or downstream grants. Public resource legislation1 and other legislative safeguarding provisions also obstruct localisation efforts at a policy level (Patel and Van Brabant, 2017[16]).

To localise well, development co-operation providers need to invest time and resources in building internal capacities, adjusting operational frameworks and addressing disincentives to localise. While fiduciary and financial risks are valid concerns, there are thornier risks to localisation itself that have not been systematically addressed. These include the divergence between partner country governments and local civil society interests; conflicts between locally owned priorities and aid agencies’ normative interests and values; the need to maintain neutrality during crises; and the risk that increasing competition among local actors could erode their incentives for collaboration.

The United States Agency for International Development (USAID) has made several laudable commitments – to allocate 25% of its funding to local organisations by 2025 and also to place local actors in the lead for either design, implementation or evaluation of 50% of its programming by 2030 (Power, 2021[17]). These pledges are consistent with the agency’s long history of deliberately trying to address systemic barriers to localising development co-operation around partnerships, procurement and risk (OECD, 2022[18]). In recent years, USAID also has sought to lower barriers for new and non-traditional partners, for example, through the New Partnerships Initiative (USAID, 2022[19]); develop contracting and leadership capacities at both agency and local levels; and increase focus on value and co-creation, among other objectives (USAID, 2019[20]).

Some providers are starting to progressively redress power imbalances

While there has been a great deal of discussion about power imbalances in the development sector, progress to correct them has been slow (Peace Direct, 2021[21]). By endorsing the development Effectiveness Principles, DAC members recognise the importance of country partners setting their own priorities and of providers furthering these priorities by using national systems. Development co-operation providers still tend to hold substantial strategic authority and operational responsibilities around resource allocation, and governance primarily resides with the implementing agencies. The Doing Development Differently manifesto recognises that “those who would benefit most [from development interventions] lack power, those who can make a difference are disengaged and political barriers are too often overlooked” (Building State Capability, 2014[22]).

In the context of localisation, the discussion of power revolves around two questions: the extent to which local actors have access to decision-making spaces and whether their voices count. Moving from local involvement to local leadership is a process that entails giving local actors responsibilities at the strategic as well as at the operational level and enabling their meaningful influence throughout the development process. In an internal practice note on localisation, the Australian Department of Foreign Affairs and Trade explicitly elaborates on this process, describing key characteristics of localisation along a trajectory of progress (early, partial and late) wherein power is progressively handed to local stakeholders by shifting decision making, resources, and the responsibility and authority for design and implementation.

Moving from local involvement to local leadership is a process that entails giving local actors responsibilities at the strategic as well as at the operational level and enabling their meaningful influence throughout the development process.

It is also necessary to acknowledge power imbalances, institutional racism and colonial legacies that impact relations between development co-operation providers and local actors (and between different local actors) and undermine efforts to localise. As a first step in building a decolonised development co-operation system within its overarching foreign policy, Belgium has commissioned a study to map structural colonialism in current development structures in Belgian aid. More open, honest reflections may be needed to address these sensitive issues.

Anticipating how localisation may shift local political and economic dynamics can help avoid common pitfalls

Moving towards an equal partnership model can be perceived as giving up control or as detrimental to the vested interests of providers and intermediaries. Localising development co-operation likely means that some actors could lose out financially. However, providers can emphasise that localisation is not a financial zero-sum game. Localisation does not prevent opportunities for sharing, cross-border research and co‑generation of knowledge. Reimagining the role of the intermediary and exploring models to change the structure of bilateral aid delivery could enhance the case for a new aid business model, one in which local priorities and ownership steer development outcomes. Relevant thinking around alternative approaches to bilateral aid delivery has already begun. Two significant examples are the RINGO Project and the SPACE (Social Protection Approaches to COVID-19 Expert Advice Service) initiative funded by Australia, Germany and the United Kingdom. Together, these set out 11 alternative models of bilateral aid delivery and reimagine the roles of international non-governmental organisations and other intermediaries in development co-operation with a view to promoting greater local leadership (Cabot Venton and Pongracz, 2021[23]; Rights CoLab, 2022[24]).

Localisation requires a thorough political economy analysis of both provider and recipient systems to identify latent risks it might pose to different actors, including those that might, at first glance, appear to benefit. As providers start to expand support to local actors, ensuring that on-the-ground power asymmetries are not exacerbated or reinforced is essential. Tensions around issues of legitimacy and representativeness must be carefully managed; a systems approach that strengthens both local and national government capacities is key (OECD, 2022[18]). In contexts that are restrictive for civil society, greater care is needed to achieve the right balance – one that promotes civic space and plurality of funding. Compliance requirements should not promote or reinforce accountability solely towards providers. Rather, they should look to build long-term capacity, without which localisation could risk undermining national systems.

Localisation requires a thorough political economy analysis of both provider and recipient systems to identify latent risks it might pose to different actors, including those that might at first glance appear to benefit.

As conveyed in the development Effectiveness Principles, working through national systems can help strengthen them, and standardised frameworks to assess fiduciary capacity (such as the Public Expenditure and Financial Accountability Programme) exist across the development community. Introducing similar common capacity assessment frameworks across the DAC for non-state actors such as civil society organisations could further reduce compliance burdens and transaction costs for smaller actors (OECD, 2012[25]) and harmonise attempts to localise. Despite attempts at donor harmonisation, there is still ample room to pursue harmonisation further (OECD, 2020[26]).

Collective understanding of localisation, built on insights from experiences, would boost accountability

The development community as a whole must move towards a shared understanding that can underpin various interpretations and approaches to localisation and reflect the needs of local actors and the realities of development co-operation providers. This will allow for flexible, inclusive, equal and trust-based partnerships to be operationalised. There is much room to accord greater value to local and indigenous knowledge and recognise and centre existing capacities. Frameworks developed by Van Brabant and Patel (2018[11]) and the Network for Empowered Aid Response (2019[27]), a network of local and national civil society organisations from the Global South, speak to similar dimensions of localisation as indicators of success or progress, suggesting immediate areas that development providers could consider when looking to adapt ways of working. These frame localisation as a combination of participation, agency and ownership; meaningful influence; and strengthened capacity for long-term resilience. As such, they provide opportunities to identify complementarities and challenges and guide conceptualisation for localisation.

The development community as a whole must move towards a shared understanding that can underpin various interpretations and approaches to localisation and reflect the needs of local actors and the realities of development co-operation providers.

By working on funding structures, institutional capacities and cultures, and power imbalances, development co-operation providers can start building the necessary evidence base that is a first step towards accountability. This work has started with some powerful examples from established providers, including the recent commitment to furthering the localisation agenda through the joint donor statement adopted at the Effective Development Co-operation Summit (USAID, 2022[3]). Sharing lessons and insights across the community would contribute significantly to the creation of collective principles to guide a rethinking and remaking of partnerships. Meaning and accountability in the operationalisation of localisation – a nebulous concept at present – are critical to prevent a tokenistic application of what is an immense opportunity to maximise collective development impact.

References

[8] Baguios, A. et al. (2021), “Are we there yet? Localisation as the journey towards locally led practice: Models, approaches and challenges”, ODI Policy Brief, Overseas Development Institute, London, https://cdn.odi.org/media/documents/ODI-Are_we_there_yet-Localisation-policy-brief.pdf.

[12] Barbelet, V. et al. (2021), Interrogating the Evidence Base on Humanitarian Localisation: A Literature Study, Overseas Development Institute, London, https://odi.org/en/publications/interrogating-the-evidence-base-on-humanitarian-localisation-a-literature-study.

[2] Boateng, O. (2021), “Building Africa’s homegrown humanitarian systems: Restoration as an alternative to localization”, Frontiers in Political Science, Vol. 3, p. 711090, https://doi.org/10.3389/fpos.2021.711090.

[1] Brown, D., A. Donini and P. Knox Clarke (2014), Engagement of Crisis-affected People in Humanitarian Action, ALNAP, London, https://www.alnap.org/system/files/content/resource/files/main/background-paper-29th-meeting.pdf.

[22] Building State Capability (2014), “The DDD Manifesto”, Center for International Development, Harvard University, Boston, MA, https://buildingstatecapability.com/the-ddd-manifesto (accessed on 9 November 2022).

[23] Cabot Venton, C. and S. Pongracz (2021), Framework for Shifting Bilateral Programmes to Local Actors, DAI Global UK Ltd, London, https://www.calpnetwork.org/wp-content/uploads/ninja-forms/2/SPACE_Framework-for-shifting-bilateral-programmes-to-local-actors.pdf.

[14] Cooley, L., J. Gilson and I. Ahluwalia (2021), Perspectives on Localization, Professional Services Council, Arlington, VA, https://www.pscouncil.org/a/Resources/2021/Perspectives_On_Localization.aspx (accessed on 10 October 2022).

[13] Government of Iceland (2022), “Development cooperation between Iceland and Malawi”, web page, https://www.government.is/topics/foreign-affairs/international-development-cooperation/bilateral-cooperation/malawi.

[15] Grand Bargain Localisation Workstream (2019), Localisation Workstream: Successes and Bottlenecks, International Federation of Red Cross and Red Crescent Societies, Geneva, https://gblocalisation.ifrc.org/wp-content/uploads/2019/06/Successes-and-Bottlenecks-Localisation-Workstream.pdf.

[7] Inter-Agency Standing Committee (2016), The Grand Bargain – A Shared Commitment to Better Serve People in Need, Inter-Agency Standing Committee, https://interagencystandingcommittee.org/system/files/grand_bargain_final_22_may_final-2_0.pdf.

[5] Mansuri, G. and V. Rao (2013), Localizing Development: Does Participation Work?, World Bank, Washington, DC, https://openknowledge.worldbank.org/handle/10986/11859.

[9] Mitchell, J. (2021), “Decolonisation and localisation: New dawn or old history?”, ALNAP blog, https://www.alnap.org/blogs/decolonisation-and-localisation-new-dawn-or-old-history (accessed on 10 October 2022).

[27] Network for Empowered Aid Response (2019), NEAR Localisation Performance Measurement Framework, International Council of Voluntary Agencies, Geneva, https://ngocoordination.org/system/files/documents/resources/near-localisation-performance-measurement-framework.pdf.

[18] OECD (2022), OECD Development Co‑operation Peer Reviews: United States 2022, OECD Development Co-operation Peer Reviews, OECD Publishing, Paris, https://doi.org/10.1787/6da3a74e-en.

[10] OECD (2021), DAC Recommendation on Enabling Civil Society in Development Co-operation and Humanitarian Assistance, OECD, Paris, https://legalinstruments.oecd.org/Instruments/instruments/OECD-LEGAL-5021.

[26] OECD (2020), Development Assistance Committee Members and Civil Society, The Development Dimension, OECD Publishing, Paris, https://doi.org/10.1787/51eb6df1-en.

[4] OECD (2020), Development Co-operation Report 2020: Learning from Crises, Building Resilience, OECD Publishing, Paris, https://doi.org/10.1787/f6d42aa5-en.

[25] OECD (2012), Partnering with Civil Society: 12 Lessons from DAC Peer Reviews, OECD, Paris, https://www.oecd.org/dac/peer-reviews/12%20Lessons%20Partnering%20with%20Civil%20Society.pdf.

[6] OECD (2005), Paris Declaration on Aid Effectiveness, OECD Publishing, Paris, https://doi.org/10.1787/9789264098084-en.

[16] Patel, S. and K. Van Brabant (2017), The Start Fund, Start Network and Localisation: Current Situation and Future Direction, Start Network, London, https://static1.squarespace.com/static/58256bc615d5db852592fe40/t/5aacc3d20e2e725448b65ecc/1521271800664/The+Start+Fund%2C+Start+Network+and+Localisation+full+report+-+WEB.pdf.

[21] Peace Direct (2021), Time to Decolonise Aid: Insights and Lessons from a Global Consultation, Peace Direct, London, https://www.peacedirect.org/wp-content/uploads/2021/05/PD-Decolonising-Aid_Second-Edition.pdf (accessed on 15 December 2022).

[17] Power, S. (2021), A New Vision for Global Development, speech at Georgetown University, United States Agency for International Development, Washington, DC, https://www.usaid.gov/news-information/speeches/nov-04-2021-administrator-samantha-power-new-vision-global-development (accessed on 15 December 2022).

[24] Rights CoLab (2022), Re-imagining INGO Prototypes, Rights CoLab and Reos Partners, https://rightscolab.org/wp-content/uploads/2022/05/FINAL-RINGO-Prototypes_May22_PUBLIC.pdf.

[3] USAID (2022), Donor Statement on Supporting Locally Led Development, United States Agency for International Development, Washington, DC, https://www.usaid.gov/localization/donor-statement-on-supporting-locally-led-development (accessed on 15 December 2022).

[19] USAID (2022), New Partnerships Initiative, United States Agency for International Development, Washington, DC, https://www.usaid.gov/npi.

[20] USAID (2019), Effective Partnering and Procurement Reform (EPPR) Recommendations, United States Agency for International Development, Washington, DC.

[11] Van Brabant, K. and S. Patel (2018), Localisation in Practice: Emerging Indicators and Practical Recommendations, Start Network, London, https://www.preventionweb.net/files/59895_localisationinpracticefullreportv4.pdf.

Note

← 1.  For example, Belgian law stipulates that only non-governmental organisations registered in Belgium can receive public funding. For further details, see: https://static1.squarespace.com/static/58256bc615d5db852592fe40/t/5aacc3d20e2e725448b65ecc/1521271800664/The+Start+Fund%2C+Start+Network+and+Localisation+full+report+-+WEB.pdf.