How Donors Can Fuel Conflict And Corruption
- Javier Fabra Mata, PhD
- 4 hours ago
- 5 min read
.... and why they need to integrate conflict sensitivity and awareness of corruption risk into their practices
Javier Fabra Mata, PhD
We like to pin blame on ‘local opportunists and crooks’ when aid doesn’t go to where it is supposed to go. But here’s the kicker: donors themselves may play a part in these messes. The truth is that well-intentioned donor agencies can create the perfect conditions for corruption to flourish – less through malicious intent than through an unwitting lack of understanding of the political economy, or conflict dynamics, or the agency’s own internal politics and constraints. In conflict-affected environments, this lack, combined with unexamined assumptions, can lead to devastating outcomes.
Development and humanitarian aid can keep essential governance functions and life-saving services afloat. Yet because of the pressure on resources in a context of ongoing power struggles, those very funds can become a magnet for corruption. And it’s not just a case of the stolen money disappearing: it can also be used to pay off militias and it can exacerbate already-violent rivalries. One of the most serious effects can be that what little trust exists between citizens and institutions is shattered.
So donors need to look at this head on. What are they doing that could be facilitating corruption? And what can they do to ensure it doesn’t happen?
Formal conflict analysis tools can guide donors in mapping local tensions, power imbalances, and possible points of corruption. But even if these tools are in place, donors can still have dangerous blind spots, particularly about their own internal practices. These often stem from political or bureaucratic decisions far beyond the control of country-level teams. And understanding them may not prevent them, but it can certainly help practitioners prepare to manage their effects.
This blog draws on insights from a literature review and a reflection note, both commissioned in 2024 by the Department of Evaluation at Norwegian aid agency, Norad. I was involved in the research for both, and here I expand on some of the observations. First, we will look at some key donor-driven actions that can heighten corruption risks in conflict-affected contexts and even escalate conflict dynamics. Then, we will look at what can be done about them.
How donors may be contributing to corruption and conflict
1. Short funding cycles undermine oversight
Stop-start 6- to 12-month project cycles and rapidly dispersed grants can undermine consistent oversight. Because projects must chase renewal or new grants frequently, proper accountability might end up last on the to-do list. Short-term funding might also mean less time to build trust with communities or to put long-term anti-corruption measures in place.
In the DRC, for example, rapid response programs weakened the overall quality of aid efforts and increased opportunities for fund diversion. In Afghanistan, quick spending on stabilization funds fueled both corruption and conflict. Similarly, quick-impact projects, such as UNDP’s 90-day infrastructure initiatives in Iraq, can be highly susceptible to corruption – which, of course, erodes public trust.
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2. Botched mergers may weaken oversight practices
Major restructuring or leadership changes in donor organizations can scatter institutional knowledge and weaken compliance. If fraud units are understaffed or downgraded during a reorganization, or if interim changes in routines and practices create gaps, corruption risks increase, often before senior leadership even takes notice. Take the UK’s DFID–FCO merger: in the short run, it heightened risks due to insufficient training on the new financial system and its consequences. Over time, it ultimately led to a reduction in the detected fraud loss rate.
Sudden policy shifts can inject aid money into high-risk environments without adequate conflict analysis or risk management. For example, in response to domestic pressure to curb migration, some European donors increased aid to transit countries in North Africa. However, some programs bypassed thorough conflict assessments, allowing militias and corrupt officials to siphon off funds – and ultimately fueling the very instability and abuses that exacerbate migration pressures.
4. Budget cuts and oversight gaps can weaken anti-fraud checks
Reduced development funding often translates into fewer resources for auditing and fraud detection. When UK budget cuts hammered the FCDO, it lost leverage to enforce anti-fraud checks in multilateral organizations, resulting in loopholes and increased fraud risk. Even if recipient organizations keep their own counter-fraud systems, the donor’s pullback can undermine external oversight.
"By merging local conflict analysis with operational safeguards — and by scrutinizing their own bureaucratic blind spots — donors can become part of the solution rather than being unwitting contributors to the problem."
Moreover, funding cuts can heighten fraud risks even if a recipient organization’s internal safeguards remain intact. This often stems from a failure to meet local government expectations about levels of funding—resulting in loss of trust and influence with them—as well as the breakdown of local oversight mechanisms for aid programs. In a report on Southern Somalia, Transparency International (2016) notes that unstable funding can lead to job insecurity and hinder staff development – factors that, in turn, increase corruption risks.
What can donors do about it?
To reduce the risk of aid inadvertently causing harm or being diverted, it is important for donors to develop a nuanced understanding of the conflict landscape they’re engaging with — from local community dynamics to internal decision-making processes at the agency level. Here are two suggestions for how conflict sensitivity and risk management might be brought together more intentionally:
1. Develop a unified risk matrix and scenario testing
Rather than treating conflict sensitivity and risk management as separate exercises, it could be helpful to combine them into a single, unified framework. One approach would be to create a risk matrix that would bring together:
conflict-related triggers (such as intergroup tensions or political instability),
operational risks (like staff safety or logistical barriers); and
internal donor vulnerabilities (e.g., leadership transitions or budget constraints).
This kind of tool could help to surface intersections that might otherwise be overlooked — for instance, how a looming internal reorganization might coincide with a tense political moment in the project area. Scenario-based exercises could further strengthen this by ‘stress testing’ how programs might respond to abrupt changes. These exercises aren’t about predicting the future, but about improving the ability to adapt and plan for uncertainty. Taken together, this kind of integrated approach could support more resilient program design, while helping to identify pressure points where corruption or mismanagement might be more likely to emerge.
2. Have mandatory risk-sharing agreements
Under mandatory risk-sharing agreements, donors and implementers could co-fund a contingency reserve—for example, 10% of the total grant—as a volatility buffer. If funding suddenly shifts or dries up, this reserve could keep essential monitoring and anti-corruption efforts, and proper close-out, rather than letting them collapse mid-project. By maintaining accountability structures even when donor priorities shift, through the transition, these agreements reduce the likelihood that corruption will take root. Robust governance and oversight are critical to success: clear triggers would need to be established so that the buffer is used only under genuinely urgent circumstances.
Key takeaway: Donors must become part of the solution
Corruption thrives when aid ignores conflict and where there are weaknesses in donor structures. By merging local conflict analysis with operational safeguards — and by scrutinizing their own bureaucratic blind spots — donors can become part of the solution rather than being unwitting contributors to the problem. Can these measures reduce corruption risks in conflict-affected countries? Most likely. Will they make aid ‘donor-proof’, safe from the risks of sudden, unexpected, dramatic changes on the donor side? Certainly not.
All opinions expressed here are the author’s own and do not represent the
positions of any organization with which he is professionally affiliated.
Javier Fabra Mata, PhD, is a specialist in AI, research, and analysis in the field of development cooperation, with a focus on conflict-affected contexts. He has led research and evaluation work for organizations such as Norad, UNDP, civil society organizations, and other UN agencies, exploring the intersection of humanitarian, peace, and governance efforts.
