Doing Business Environment Reforms in Fragile and Conflict Affected States

The first scoping study published under BERF considers the existing evidence on how to design effective business environment reforms in fragile and conflict affected states. DFID has identified this as a priority area given the increasing focus on economic growth and the greater concentration of expenditure in fragile and conflict affected states. This scoping study provides a high level assessment of the existing evidence on the design and impact of BER in fragile and conflict affected states.

We have identified gaps within general research on business environment reforms in fragile and conflict affected states, which could be useful to address for DFID and other donor programming to give business environment reform interventions the highest potential to succeed. These gaps include the following:

• There are no synthesis papers or rigorous evaluations of business environment reforms  in fragile and conflict affected states. There are specific case studies of certain intervention in countries but nothing that brings this together in an easy to read format for policy makers.

• What constitutes effective monitoring and evaluation is contested (i.e. what should be measured and how). The impact of business environment reforms  on peacebuilding, for example, is unknown, as it has not previously been measured by evaluations due to the lack of key indicators. There is debate over whether it is more appropriate to measure business environment reform  impact on peacebuilding or conflict sensitivity.

• More evidence is needed on the varying effects of the type of conflict, levels of fragility and income on the success of business environment reforms.

• There is lack of consensus on the optimal phasing of reforms. Specifically, research is needed to address the questions of whether reforms should wait several years after conflict, or be implemented simultaneously with humanitarian assistance, and whether some interventions pose more risk at different stages of conflict.

• More research is needed to ascertain whether reforms for women’s economic empowerment in fragile and conflict affected states are effective and produce impact.

• There is no consensus on whether taking a broad approach to business environment reforms and working on multiple areas and sectors at once, or focusing on in depth reform in one sector, is more effective in various fragile and conflict affected states.

• More evidence is required on whether extensive foreign intervention negatively impacts the ability of local institutions to carry out their core functions, for example, law making.

• Finally, more work is needed on how the agendas of different donors and political organisations can be best aligned to coordinate business environment reforms in fragile and conflict affected states.

The next steps recommended by the scoping study include:

• An in-depth study to assess the body of evidence relating to case studies of individual reforms in fragile and conflict affected states (e.g. One Stop Shop, land registration, Alternative Dispute Resolution, tariff reforms).

• An in-depth study on the optimal phasing of reforms, i.e. whether reforms should wait several years after conflict or be implemented simultaneously with humanitarian assistance, and whether some interventions pose more risk at different stages of conflict.