Recent interest in the United Nations has focused on reform of its main governing bodies, its performance in peacekeeping operations and talk of a 'financial crisis' in the UN system as a whole. Questions of whether the UN's funding difficulties have jeopardized its role in the economic and social development of poorer countries have been overlooked. A recent Overseas Development Institute Briefing Paper outlines the evolution of the UN's work in development, assesses its contribution to global assistance efforts and explains how the system's main components have been financed in the past. As recent changes foreshadow big impacts on the future scale and pattern of UN funding, it asks: is there a future for grant-assisted development?

There has been no significant decline in the total level of finance available to UN development programmes since the first half of the 1990s. In that narrow sense, there is not yet a 'funding crisis' in the generally understood sense of the term. There are however, trends which point towards an ever more unsatisfactory funding situation in the future, namely:

• a drop in core funding and growing reliance on non-core income such as special funds or trust funds
• a substantial and continuing trend towards emergency assistance at the expense of development and general programme support, resulting in income decline at times when emergency demands ease off
• unevenness in the contribution of major donors to particular funds and programmes, making these parts of the system vulnerable to domestic changes in the political priorities of donor governments.

On the evidence of these trends, the UN's freedom to manoeuvre in development activities is liable to be progressively curtailed. If so, it will prove extremely difficult for UN specialised agencies or interagency programmes to assume the position of leadership they were accorded in international efforts to promote development. What, then, are the options for the future?

• Extrapolation of recent trends implies that the UN will continue to be a big player in international development. But reorganisation will be needed to help shift its priorities toward humanitarian goals.
• If more radical reconstruction of UN funds and programmes and greater concentration of resources could be agreed, the UN could play a more influential role in selected priority areas of development.
• Real increases in funding (from conventional or novel sources) appear unlikely to command wider support as things stand. But successful reconstruction might elicit wider support from major donors.

A growing body of evidence suggests that concerns over the future level of funding to the UN are justified. UN programmes and funds are affected not only by the general decline in development assistance but also by the associated drive for greater effectiveness and value for money. New sources of finance and programme arrangements are being considered in response to the funding situation, but a more radical approach may be needed to maintain the UN as a cornerstone of development progress.

Source(s):
The UN's role in grant-financed development. ODI Briefing paper No.2 , A. Marr (1997) Full document.

Funded by: Overseas Development Institute (ODI), UK

id21 Research Highlight: 1998-Apr-30

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