Financing the UN: Payers, Pipers and Tunes

Financing of UN organizations is erratic and distorted, the authors argue, so they recommend an independent commission to better manage the situation. Two such organizations, the UN Environment Program and Unesco, operate the Great Apes Survival Partnership, which aims to thwart the extinction of gorillas and other apes in equatorial Africa and southeast Asia.

GENEVA — Change is in the air again on First Avenue. Among numerous reform options being bandied about, none will be more consequential than those on financing the United Nations system.

There are the sledgehammer arguments: drastic slashes in funding by Washington and other donors could precipitate dramatic change. As we have argued in these pages, however, such cuts could also help focus the UN’s collective mind, demanding that the system’s development and humanitarian organizations achieve more with less. That would also require asking tough questions about comparative advantages and cutting superfluous activities to be accomplished more effectively outside the UN system.

However, it is as much the patterns as overall levels of funding that already seriously undermine the system’s potential. In a new study published by Sweden’s expert group for aid studies, we highlight two major problems arising from the financing of the UN funds and programs: haphazard patterns of funding; and distortions from the growing preponderance of earmarked funding.

Financing practices in the UN reflect history and expediency. Member states created the 13 funds and programs over seven decades, starting with Unicef in 1946 and ending with UN Women in 2010. The growth has responded to perceived development and humanitarian needs, although no blueprint could have anticipated the system’s size and shape. Moreover, there has been no attempt to raise and allocate resources rationally to reflect the nature of the varying mandates or each organization’s relevance and effectiveness.

The “big four” funds and programs — Unicef, World Food Program, UN Development Program and UN Refugee Agency — are still “voluntary,” requiring nonstop fund-raising campaigns, mostly from wealthy member states. Annual budgeting, subject to the vagaries of official development aid, is hardly a recipe for sustained capacity development. The only exception to the 100-percent voluntary budgets is a trivial allocation to the UN refugee agency from the UN’s assessed biennial budget.

For the smaller organizations, contributions from the UN’s core budget — subscribed by every UN member state — vary from some 30 percent for the UN Environmental Program and UN Conference on Trade and Development to much less than 10 percent despite one of the most far-reaching mandates of any UN body, encompassing drug control, international crime, trafficking and corruption.

With zero or negative growth in the UN’s core budget, the exact amounts reflect the ability of each organization to lobby before internal budget committees. There are no criteria of performance, no objective impact assessments and no evaluation of continuing relevance. For example, although global trade negotiations have migrated from the UN to the World Trade Organization, there has been no diminution in assessed budget allocations to the UN Conference on Trade and Development.

Core funding for the funds and programs, whether the paltry amounts from the assessed budget or from voluntary contributions, has stagnated or declined, particularly in this century. All such UN bodies have thus come to rely on voluntary “noncore” contributions, which donors restrict to countries and themes of special interest to them.

UN organizations resemble various-size dogs. Whether large or small, they are being wagged by growing tails. In addition to bilateral donors, other multilateral organizations — especially the world’s largest donor, the European Commission — and the large specialized vertical funds in the health and environment fields are also major contributors.


 

 

The result is the loss of direct control, turning UN funds and programs into implementers of donor priorities. UN organizations are diverted into managing and reporting on numerous projects for each patron, spreading core staff resources thinly while donors press for reduced overheads. The competitive chase after noncore resources also worsens an already atomized UN family, resulting in more overlap, duplication and competition for turf.

Can anything be done?

Donors should be encouraged to increase their core contributions and support pooled resources into multiagency funds. Noncore or earmarked funding should be channeled into areas in which the UN has an acknowledged comparative advantage: in norm and standard-setting and global conventions (like the Paris climate agreement in 2015). Such tied funding should reinforce mandates and avoid duplication.

This recommendation particularly applies to the UN Development Program, whose responsibilities as coordinator for the UN development system conflict with its growing panoply of operational activities in competition with other organizations.

Funds and programmes should justify their use of core resources and overheads. They should also be prepared to “say no” to offers of noncore funding, however financially tempting, that fall outside their core mandates and often entail distracting and onerous conditions.

The report recommends creating an independent funding commission. The starting point is to standardize definitions and nomenclature — accurate statistics simply do not exist. The commission would also identify the areas where the activities of the funds and programs overlap and recommend rationalizations and mergers.

This autonomous effort — outside the UN secretariat’s control — would be an essential building block for the “funding compact” that Secretary-General António Guterres proposed to the Economic and Social Council in July to make the system more capable of supporting the 2030 Agenda.

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1 thought on “Financing the UN: Payers, Pipers and Tunes”

  1. RE: FINANCING THE UN: PAYERS, PIPERS AND TUNES

    Financing of UN Agencies is still a political issue varying with specific preferences and objectives of major countries and their allies. In parallel, any large organization, especially one with a quasi-government structure, seems to equate increasing size with increasing ability to achieve it design outputs or targets. No doubt there are ambitions among senior staff to grow with the organisation. UN Agencies are like this and ignore the fact that they are often under-achievers where increasing funding and size does little to efficiently achieve national or regional development targets.
    A potentially good result of reducing budgets is that the Agencies might focus on getting best value for their dollar by realistically assessing where programs and projects have practical opportunities to be successful given their design outputs and the national or international environment within which they are expected to operate. A first step could be to initially offer aid and support to countries which are willing to achieve an acceptable level of good governance – which might include, among other things, reducing institutionalized corruption and equal opportunities which are not specific to culture or gender. There may well be instances where UN offices of all types could be withdrawn from countries which have blatant disregard for human rights of with excessive corruption at top level government. That would save quite a bit in terms of UNDO budgets.
    There is no doubt that this would disadvantage the needy for some time as aid is reduced because of, e.g., Government corruption. It begs the question ‘is a short pain better than a lifetime of lesser agony?’ To be honest I can’t answer that and have at different times said yes to both cases.
    Essentially, while I fully agree that “UN organizations resemble various-size dogs. Whether large or small, they are being wagged by growing tails”, I still believe that the system is designed to be inefficient given the corruption and lack of acceptable levels of governance in many developing countries coupled with the (perhaps structural?) inability of Agencies to deal with these problems. A brief look another Swedish report ‘Swedish Development Cooperation With Tanzania – Has It Helped The Poor?’ shows that they too had problems in spite of donating approximately USD 7 billion (between 1962 and 2013).
    http://www.ferdi.fr/sites/www.ferdi.fr/files/publication/fichiers/tanzania-201610-webb.pdf

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