Research report by Katie Peters and Florence Pichon for ODI.

By design, the humanitarian–development aid architecture is strictly segregated, divided by mandates and rules that were originally designed to meet different kinds of needs. Today, this rigidity is hampering the aid system’s ability to manage risks and rapidly respond to crises. Pre-planned development programmes do not have the flexibility to quickly reallocate funding to address spikes in need, and humanitarian organisations are largely confined to funding instruments that prevent longer-term engagement in vulnerability reduction.

To address these issues, donors and NGOs are trialling a new set of innovative risk financing options to help deal with small-scale crises that impede development progress, and a humanitarian fund Providing Humanitarian Assistance for Sahel Emergencies (PHASE) has been embedded into to the multi-year Building Resilience to Climate Extremes and Disasters (BRACED) programme. This ‘crisis modifier’ is designed to enable early action and rapid response to new humanitarian needs that manifested in the project areas, and in doing so, protect development gains BRACED projects had made.

This paper showcases evidence from the use of the PHASE crisis modifier and situates crisis modifiers as a potential ‘solution’ for a more flexible aid system – if they are accompanied by a fundamental shift in the way development actors design their programmes and respond to predictable risks.

CRISIS MODIFIERS:A SOLUTION FOR A MORE FLEXIBLE DEVELOPMENT– HUMANITARIAN SYSTEM?

An estimated 87% of people living in extreme poverty are in fragile or environmentally vulnerable countries (Global Humanitarian Assistance, 2017). Tackling poverty and responding to crises are increasingly linked, and the aid system is struggling to respond to new challenges posed by the interconnected risks of climate change, displacement, conflict and political fragility. Though enormous progress has been made in helping nearly 1.1 billion people escape poverty since 1990, such progress in fragile contexts has been stubbornly slow, periodically interrupted by shocks and leaving the extreme poor more vulnerable than before. To meet ambitious commitments articulated by Agenda 2030,
(UN General Assembly, 2015) both development and humanitarian actors must get serious about preventing and minimising the impact of crises on the poorest.

Evidence from BRACED reveals that crisis modifiers are an important contribution to an emerging suite of risk financing options. If implemented effectively, a crisis modifier allows development agencies to respond quickly to anticipated or observed crises, while continuing to invest in projects that address the root causes of people’s vulnerability to shocks and stresses. The case studies of crisis modifiers managing conflict-related displacement in Burkina Faso, flooding in Mali and food insecurity in Niger demonstrate that, when employed effectively, crisis modifiers offer a practical means to avert or reduce the impact of a crisis on beneficiaries and protect resilience trajectories. Deploying a crisis modifier is a new way of working. This study identifies common challenges, both technical and political, in responding to a crisis in the context of a development project.

Read the complete document here.

Photo: UNICEF (CC BY 2.0)