Taking localisation beyond labels and lip service

Donors increasingly speak of locally led aid response, but often do not walk the walk. Case in point is the United States Agency for International Development (USAID), the humanitarian and development agency of the largest donor country in the world. In late 2021, USAID set a target that 25% of its funding would go to local organisations by 2025. Its 2022 progress report showed that around 10.2% of all eligible funding went to local actors. A deeper investigation indicated that USAID was employing a loose definition of who counts as a ‘local’ actor. With a stricter definition, this number fell to a sobering 6%. Why is this important and where do we go from here?

The language of localisation

Localisation addresses an important critique of foreign aid: that interventions are too often externally led and managed, with little involvement by those from affected (aid-recipient) contexts. Such criticisms of aid, and donor responses to it in the form of collective agreements, have a long history and an ever-growing vocabulary. Since the 2005 Paris Declaration, donor commitment to local ‘ownership’ gained traction in the aid effectiveness agenda. In 2016, the Grand Bargain reached at the World Humanitarian Summit firmly placed localisation on the reform agenda. The Grand Bargain set ambitious targets for donors, including allocating at least 25% of funds to national/local actors as directly as possible, harmonising reporting standards, providing more cash assistance, and including aid recipients directly within high-level decision-making, among others.

Since the landmark agreements, usage of the term localisation has skyrocketed within practitioner and academic circles, but often refers to different ideas. For instance, for the European Commission, localisation involves empowering local responders in affected contexts. For the International Federation of Red Cross and Red Crescent Societies (IFRC), it means increased investment in and respect for local actors. Still others such as PLAN International adopt a broader understanding of engaging local actors in all phases of aid, while USAID defines it as ‘actions and reforms we are taking to put local actors at the center of our work to advance locally led development and humanitarian relief’. These varying definitions have implications for how donors tangibly work with local actors. Notably, ‘increased investment’ may simply translate to replacing international implementers with local ones, without meaningfully incorporating the latter’s inputs and contextual expertise. Or donors aiming to ‘empower’ local responders in the name of localisation may reinforce the same problematic power structures, as the ‘local’ is presumed to be deficient in capacities measured by a Western yardstick in the first place.

Why localisation matters

While localisation is rooted in a normative critique of power imbalances in the aid sector, there is also a practical case to be made. One estimate shows that using local intermediaries ‘could deliver programming that is 32% more cost efficient than international intermediaries’, owing to savings on inflated overheads (including personnel, logistics and salaries). Localised responses can also be quicker and less costly, as local actors have vital expertise and contextual know-how. It also goes hand in hand with local ownership, a key factor identified in our research as influencing success in aid-supported projects. Indeed, the embrace of localisation and ownership reflects the broad agreement within the aid community of its link with better humanitarian and development outcomes.

Following the money: a report card

A five-year review of the Grand Bargain shows progress in some workstreams, although a system-wide shift in the funding landscape is yet to occur. Lack of collective political interest, poor coordination, scarce data and unwillingness to relinquish control owing to perceived risk are the biggest stumbling blocks. These issues vividly manifest in country-specific aid responses. A recent assessment of the response in Syria showed that 86% of all funding went through international non-governmental organisations (NGOs) and the United Nations, while the ‘local partners’ doing the bulk of the implementation received a mere 0.2%. Similar results are found in Turkey, South Sudan, Somalia, Uganda and Bangladesh.

The issue is not simply what percentage of funds local actors receive, but under what terms and conditions they receive it, where the bottlenecks occur, and which other actors dominate the funding landscape. Our primary research in Sierra Leone reveals a nuanced picture. Using the country’s Development Assistance Database, we found that the largest donors greatly vary in the extent to which they fund locally and which local actors they fund. National NGOs are rarely prioritised for funding directly – the recipient government is prioritised, but largely by multilateral donors.

While there is an expectation that diverting funding to/through local channels will lead to more equitable relationships between local and international aid actors, the reality is far messier, as revealed in primary interviews Interviews conducted with stakeholders in international NGOs, national NGOs, donor agencies and government ministries in Sierra Leone. . An interviewee from the local government reflected on this nuance when discussing a donor project:

“We had a programme about parliamentary reform funded by a donor through us (a local government body). The aid recipient (an international aid actor) implemented it on their own without even informing us or the Ministry. They would only report to the funder directly.”

In this case, funding via local actors produced none of the anticipated benefits.

Furthermore, seemingly localised funding can often be top-down and tightly controlled by donors, as noted by another interviewee:

“Our (local NGO) received direct funding from (a major) bilateral donor, but we were forced to co-submit the application with an INGO for “capacity reasons”. Even when we received the funding, we had to constantly submit reports and prove our worth.”

Thus, funding locally and the 25% target of the Grand Bargain might be laudable goals, but how localised funding percolates through the system is equally crucial. It cannot simply become another box-ticking exercise.

The road ahead

Despite limited progress and donor attempts to level the playing field, evidence points towards de-prioritisation of local actors in practice. Efforts such as Grand Bargain 2.0 aim to continue the localisation momentum, but long-term change is tricky and haphazard donor initiatives to ‘fund locally’ are simply not enough. Moving forward, system-level change that prioritises experimentation and learning from alternate funding approaches will be needed. In practice, this means that donors need to be willing to find and fund sub-grantees outside of their ‘international bubble’, even at the cost of expending more resources and time. Donors also need to be willing to rethink what ‘capacity’ means and revamp the metrics against which local actors are deemed ‘worthy’ of their funding, if they are serious about constructively shifting power. Crucially, there is capacity-building work for donors themselves on how to make their funding fair, accessible and competitive for local actors.

There is also work to be done on mobilising the ‘local’ side to challenge entry barriers. Instead of moulding internal processes and systems to mimic international organisations and appear ‘funding-worthy’ to outside donors, local actors could collectively advocate to have processes that are contextually relevant and optimal for efficient aid delivery. Their collective mobilisation to push back against top-down approaches to donor funding requirements could be transformative.

In essence, the path to preventing the dilution of ‘localisation’ into yet more jargon necessitates donors and international aid actors in positions of influence relinquishing their privileges. Without this shift, justifying aid assistance as truly impactful will continue to remain challenging.

Swetha Ramachandran is a former Consultant and visiting PhD Fellow at the United Nations University World Institute for Development Economics Research (UNU-WIDER) and Rachel M. Gisselquist is a Senior Research Fellow with UNU-WIDER.