Chapter 9 The Collier challenge: how can reliable transitional financing systems be created in ‘barely functional’ states?

• Pages: 147-165
• Published date: 08 July 2010
• Date: 08 July 2010
• DOI: https://doi.org/10.1108/S1572-8323(2010)0000014013
• Author: Andrew Ladley,Jessie Williams

CHAPTER 9

THE COLLIER CHALLENGE: HOW

CAN RELIABLE TRANSITIONAL

FINANCING SYSTEMS BE

CREATED IN ‘BARELY

FUNCTIONAL’ STATES?

Andrew Ladley and Jessie Williams

ABSTRACT

Purpose – This chapter uses the work of Oxford economist Paul Collier to

explore the conditions under which f‌inancing systems can be created to

support the governance and economies of fragile states. This support is

especially needed inthe immediacy of a crisis or as a practical strategy to

potentially change the dynamics of a particularly vulnerable state. The

focus is on his 2008 proposal for Haiti, for apartnership of domestic and

international f‌inancial institutions. Central to the proposal is the establish-

ment of an Independent Service Authority (ISA) to fund and implement

government policy, especially in delivery of basic services. Representatives

from aid donors, Haitian expatriates or diaspora and members of the

government would sit on the ISA board, sharing responsibility for

effectively administering public funds. This model was proposed to the

United Nations in late 2008to stabilise and transform the government and

economy of Haiti (Collier, 2008, 2009b).

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Methodology – The chapter explores the issues raised in the model using

a case study of the Regional Assistance Mission in the Solomon Islands

(RAMSI).

Findings – ‘‘The work concludes that the RAMSI process worked well to

stabilise f‌inancial systems and survived signif‌icant political challenge due

to a framework of local agreements, regional or international resolutions,

treaties, statutes and contracts. This suggests that such a framework will

help to ‘buttress’ any mixed local–international f‌inancial institutions in

the event of domestic political or legal contest in Haiti (or wherever else

this model is considered).

Limitations – The chapter does not compare Haiti and the Solomon

Islands as societies or economies, or go into the details of how the

proposed f‌inancial institutions would operate and transition to other

arrangements. Space also prevents consideration of the other interna-

tional partnership models applied in Haiti from 2006–08 (e.g. the Haiti

Economic Governance Reform Operation or EGRO; see the case study on

Haiti by Bradford and Scott (forthcoming), 76–84). After the earth-

quake in January 2010, Collier re-visited Haiti and stressed the

importance of longer-term economic transformation (a Haiti Marshall

plan) as well as emergency relief.



A key element of the international

community’s assistance will be f‌inding mechanisms to handle f‌inances.

However the details of the new proposals are yet to be made public, hence

this chapter focuses solely on Collier’s 2008 proposals.

INTRODUCTION

This chapter explores one key aspect of the governance and service delivery

proposals in the development model put forward by Oxford economist

Professor Paul Collier for Haiti in 2008 (well before the current earthquake

crisis), which suggests a radical approach to service delivery using an

alliance of donors, expatriates and government. This is intended to provide

reliable f‌inancial receipt and delivery mechanisms at a time when the state’s



Collier, P., & Warnholz, J.-L. (2010a). Haiti earthquake: Social and economic fabric must be

rebuilt too. The Guardian, Sunday, 17 January. Available at http://www.guardian.co.uk/world/

2010/jan/17/haitiearthquake-social-fabric-rebuilt; Collier, P., & Warnholz, J.-L. (2010b). We

need a Marshall plan for Haiti. Globe and Mail, 13 January. Available at http://

www.theglobeandmail.com/news/opinions/we-need-amarshall-plan-for-haiti/article1430309/

ANDREW LADLEY AND JESSIE WILLIAMS148