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Limits of Reforms and Conditionalities in Lebanon's 3RF

Wissam Maktabi, Sami Zoughaib, Sami Atallah, Mona Harb, Sophie Bloemeke - 12.05.2023

planning actors and scales

•

urban recovery

Beirut, Post-disaster Recovery, Governance, Crisis, Strategic intervention
Despite the international aid and reform pledges, Lebanon's ruling class has a history of failing to deliver meaningful change. The Reform, Recovery, and Reconstruction Framework (3RF) is no exception. Only 23% of the 3RF reform pledges were enacted by June 2022. Reforms requiring political commitment were neglected, and many were recycled from previous aid programs. Conditional aid programs like the 3RF have limited impact in kleptocratic contexts. Conditionality prioritizes technical solutions over real change, raising questions about the effectiveness of such programs. 
As a key recipient of international aid, Lebanon is no stranger to pledging reforms. In fact, its ruling political class are experts in promising reforms but not in delivering them. For decades, such promises proved resourceful in retaining and legitimizing their hold on power, as well as in fostering the aid industrial complex. Pledges conveyed hope to citizens that their needs for better public services and governance could be addressed. However, most reform pledges were little more than ephemeral.

From 2000 to 2020, the ruling political class endorsed tens of ministerial statements and aid programs that entailed structural reforms. Yet, upon scrutinizing the outcome of these reform pledges, our earlier work demonstrated that the state’s performance was dismal and unachieved promises were recycled.1

Following the Beirut Port Blast of August 2020, international organizations provided Lebanon with another aid framework, the early phase of which was humanitarian, labeled the Reform, Recovery, and Reconstruction Framework (3RF). Influenced by shifts in aid architecture in other post-disaster contexts, and perhaps mindful of the state’s poor track record, UN agencies, the World Bank, and the European Union built an innovative institutional structure to govern and channel aid that includes Civil Society Organizations (CSOs) in its decision-making structure (Figure 1).2 Moreover, the 3RF conditioned the disbursement of significant concessional financing (about $2 billion) on a list of “critical reforms”, referred to as action points, encompassing 16 sectors including social protection, public procurement, business, and justice. 

As this article shows, this new aid architecture largely failed in delivering reforms. Only a fraction of the proposed reforms were implemented and those that require significant political commitment were much less likely to be adopted. Moreover, many 3RF reforms were taken from previous aid programs, which indicates not only the unwillingness of the ruling class to adopt reforms but highlights their strategy to kick the can further down the road. Finally, of the few serious reforms that were passed, all were either delayed, ignored, or voided once they came into law.
Figure 1: The 3RF institutional architecture (Source: 3RF, redesigned by The Policy Initiative and the Beirut Urban Lab, 2023).
Figure 1: The 3RF institutional architecture (Source: 3RF, redesigned by The Policy Initiative and the Beirut Urban Lab, 2023).

Does the 3RF break the trend?

Recent research by The Policy Initiative and the Beirut Urban Lab examines the extent to which 3RF has been successful in yielding its prescribed reforms. We assess 3RF by examining the state's progress in completing the 138 action points that comprise its reform agenda and identify the level of political commitment required for each. To do so, we conducted desk research, interviews with key informants, and applied a framework that we previously used to study the Paris III and CEDRE reform agendas.3

Out of the 138 action points, 66 carry legal implications, which translates into 86 distinct legislative and executive texts that need to be enacted by the Lebanese State. They are predominantly concentrated in the following sectors: social protection, business, justice, public procurement, and port (Figure 2). We unpack these 86 texts further by determining which type of regulatory text they require to be implemented: a law, a decree, or a ministerial decision, each type entailing a different level of political commitment. Laws require the highest level of political commitment since they need consensus among ruling parties, which manifests as a vote in parliament. Ministerial decisions, issued by individual ministers, require the lowest political commitment. Decrees, issued by the Council of Ministers, require moderate political commitment. 
Figure 2: 3RF’s 138 action points, coded into 86 legislations, distributed by sector (Source: 3RF Monitoring Framework and June 2022 Progress Report, with analysis from The Policy Initiative and the Beirut Urban Lab, 2023.)
Figure 2: 3RF’s 138 action points, coded into 86 legislations, distributed by sector (Source: 3RF Monitoring Framework and June 2022 Progress Report, with analysis from The Policy Initiative and the Beirut Urban Lab, 2023.)
We find that 3RF has not significantly advanced desired reforms due to the refusal of the Lebanese state to politically commit to them. Out of the 86 legislative and executive texts that the state pledged to enact when 3RF was launched in December 2020, only 20 - a mere 23% - were enacted by June 2022.4 Furthermore, of the 60 legislative and executive texts that require moderate or high political commitment (39 laws and 21 decrees), only seven laws (18% of reforms that require laws) and two decrees (10% of reforms that require decrees) were completed (figure 3). In other words, the vast majority of reforms (85%) are considered in progress or on hold. 
Figure 3: 3RF reform yield in comparison to Paris III (Source: 3RF Monitoring Framework and June 2022 Progress Report, with analysis from The Policy Initiative and the Beirut Urban Lab, 2023. Note that “Other” includes four draft laws and one Banque du Liban circular.)
Figure 3: 3RF reform yield in comparison to Paris III (Source: 3RF Monitoring Framework and June 2022 Progress Report, with analysis from The Policy Initiative and the Beirut Urban Lab, 2023. Note that “Other” includes four draft laws and one Banque du Liban circular.)
Deliberate inaction in meeting the conditions of aid programs has precedence. Benchmarking 3RF’s yield to that of the Paris III conference shows that ruling parties’ reform promises are rarely kept: 23% of legislative reforms in 3RF were enacted compared to 22% in Paris III.5 Moreover, the Lebanese state’s performance regarding passing laws across both programs is also nearly unfailing: 18% were enacted in 3RF compared to 14% in Paris III.6

As a new aid framework, 3RF’s reform agenda largely assembles pledges that the Lebanese state made at previous international donor conferences but never achieved. Of the 86 legislative and executive texts outlined in the reform agenda, 52 were previously pledged at Paris III or CEDRE or are part of the government and parliament’s ongoing policy work (Figure 4).
Figure 4: Novelty of reforms listed in the 3RF (Source: 3RF Monitoring Framework and June 2022 Progress Report, with analysis from The Policy Initiative and the Beirut Urban Lab, 2023.)
Figure 4: Novelty of reforms listed in the 3RF (Source: 3RF Monitoring Framework and June 2022 Progress Report, with analysis from The Policy Initiative and the Beirut Urban Lab, 2023.)
Even when reforms are implemented and elites brand them as “achieved reforms,” the way elites reconfigure their contents betrays their disingenuousness. Two examples from 3RF illustrate how the quality of reforms can be compromised when Lebanese policymakers issue them. 

The first concerns the public procurement law, which the parliament passed in 2021 after being pledged at the Paris II conference in 2002. However, the law is not being upheld, as on February 6, 2023, the Council of Ministers awarded a public contract to a firm to conduct cleaning and maintenance work at the Ministry of Education and Higher Education building without issuing an open call for bids.7 More recently, the parliament amended the law to exempt security apparatuses from adhering to it and added conditions that may hamper the competitiveness of a procurement process.   

The second example is the expansion of social assistance through the Emergency Social Safety Net (ESSN)—a World Bank-financed social safety program. Ruling political parties passed a law enacting the ESSN in December 2021, though it was signed nearly two years after first being proposed, largely due to multiple attempts to interfere in the program’s design, namely the value of aid to be distributed, the selection process of beneficiaries, and monitoring mechanisms.8

Conditional aid in kleptocratic contexts?

Failure to induce reform under the 3RF points to the limits of conditionality as a vehicle for reform within the context of Lebanon’s political economy. The 3RF is similar to previous conditional aid programs provided to Lebanon, in that it demonstrates how conditionality is unable to incentivize kleptocratic ruling classes to reform and prioritizes technical solutions over social and political change.

As such, alongside many authors who highlight how the aid industry has become a flawed system prioritizing short-term technical solutions over social and political change (in addition to exacerbating structural inequalities and power imbalances), we are left to ponder the usefulness of conditional international aid programs beyond contributing to self-perpetuating the aid industry itself.9 We are additionally concerned over how, moving forward, the 3RF may be providing rent opportunities to the ruling elite and its networks, given the previous experience of the Council for Development and Reconstruction’s infrastructure procurement contracts secured to their firms, that provides a roadmap they will certainly try to replicate.10
This article was first published on The Policy Initiative's (TPI) website, as part of a project co-led with the Beirut Urban Lab and funded by the International Development Research Centre (IDRC).

 

 

1 See for example Paris III, CEDRE, the Hassan Diab ministerial statement, and the French-endorsed plan: Atallah, S., M. Mahmalat, and S. Zoughaib. 2018. “CEDRE Reform Program: Learning from Paris III.” Lebanese Center for Policy Studies.; Atallah, S., G. Dagher, and M. Mahmalat. 2019. “The CEDRE Reform Program Needs a Credible Action Plan.” Lebanese Center for Policy Studies.; Maktabi, W. and S. Zoughaib. 2020. “The Government Monitor No. 14 – Cabinet’s 100-day pledges: 89% Incomplete.” Lebanese Center for Policy Studies.; Maktabi, W. and S. Zoughaib. 2020. “The Government Monitor No. 16 – The Government Monitor No. 16 – The French-Endorsed Plan: Rebranding Old Reforms.” Lebanese Center for Policy Studies.

2 For more details, check Bloemeke, S. and M. Harb. 2022. “Disaster Governance and Aid Effectiveness: the case of Lebanon’s 3RF.” The Policy Initiative.

3 Atallah, S., M. Mahmalat, and S. Zoughaib. 2018. “CEDRE Reform Program: Learning from Paris III.” Lebanese Center for Policy Studies.; Atallah, S., G. Dagher, and M. Mahmalat. 2019. “The CEDRE Reform Program Needs a Credible Action Plan.” Lebanese Center for Policy Studies.

4 We use the 3RF’s June 2022 Progress Report to track the progress on action points.

5 Atallah, S., M. Mahmalat, and S. Zoughaib. 2018. “CEDRE Conference: The Need for a Strong Reporting Mechanism.” Lebanese Center for Policy Studies.

6 Atallah, S., M. Mahmalat, and S. Zoughaib. 2018. “CEDRE Reform Program: Learning from Paris III.” Lebanese Center for Policy Studies. 

7 مجلس الوزراء. شباط 2023. "من محضر جلسة مجلس الوزراء." رقم المحضر35، رقم القرار28.  Accessed here: https://twitter.com/ElGherbalOrg/status/1623958019355598848 

8 Maktabi, W., S. Zoughaib, and S. Atallah. November 2022. “Near Miss: Lebanon’s ESSN evades elite capture.” The Policy Initiative.

9 See for instance: Easterly W., 2006, The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and so Little Good, Penguin Books; Mosse D., 2005, Cultivating Development: An Ethnography of Aid Policy and Practice, Pluto Press; Polman L., 2011, The Crisis Caravan: What’s Wrong with Humanitarian Aid, Metropolitan Books; and Hickel J., 2017, The Divide: A Brief Guide to Global Inequality and its Solutions, Windmill Books.

10 Mahmalat M., S. Atallah, and W. Maktabi March 2021. “The Value of a Seat at the Table: How Elites Interfere in Lebanon’s Public Infrastructure Procurement,” Lebanese Center for Policy Studies.; Mahmalat, M. and W. Maktabi. September 2022. “Cartels in Infrastructure Procurement – Evidence from Lebanon.” The Policy Initiative.

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