Subnational governance is key to peace

Up to 2/3 of the world's extreme poor could live in fragile, conflict and violence (FCV) settings by 2030. Yet a specific section of those situations, --subnational conflicts--are rarely a direct function of poverty alone. Rather, they are frequently linked to grievances and perceived injustice associated with access to power and resources, and to feelings of ethnic, social and / or geographic exclusion and marginalization. We see these dynamics playing out in Mali and Yemen today in similar ways to what we saw in Bosnia and Herzegovina more than two decades ago. 

Resolving subnational conflicts is ultimately about governance . Warring parties contest the nature of governance structures that: shape the distribution of political power and state resources between the center and the periphery; enshrine political, economic, and social exclusion of marginalized groups; determine the degree of autonomy that populations can exercise in the governance of the subnational territories they inhabit; and structure the communal dynamics that drive localized conflict.  

As the World Bank Group (WBG) scales up its engagement in fragile and conflict-affected contexts, it will be important to understand what types of local governance arrangements might best address expressed grievances and promote a renewed sustainable political settlement, and how to support the implementation of such arrangements to respond to popular aspirations.  

One answer is that devolution and various forms of subnational autonomy may offer a credible approach to resolve issues of power contestation within states . In such cases, the new WBG Strategy for Fragility, Conflict, and Violence notes, “more decentralized systems or some levels of subnational autonomy” may be warranted but require “drilling down into specific technical issues such as transferring resources, managing services, and building the capacity of local government.”  

In our report on “Subnational Governance and Conflict” we explore the merits of subnational governance arrangements as a catalyst for peace. Drawing on the experiences with conflict mitigation efforts in seven countries where subnational governance arrangements formed an integral part of post-conflict political settlements, we identified lessons across three dimensions: the content of the institutional package that underpins a new political settlement, and the process and context in which it is negotiated, implemented, and operated.  

The case studies underpinning our research offer important lessons for the international community as it considers ways to further support conflict prevention and resolution going forward. Most of the case studies highlight that critical moments exist during the war-to-peace transition where local governance arrangements can form part of a solution . The peace negotiations in Mali and constitutional drafting process in Yemen both offer examples of such moments in time where conflict parties came together to discuss and agree on the future structure of the state.  

Yet, both these cases also show the peril of not fully addressing expectations for immediate changes in terms of more participation and inclusion. The reshaping of governance arrangements inevitably impacts existing power balances and tends to (re-) distribute political power and state resources away from the center to the periphery. As the consolidation of power by dominant actors is threatened, they may act as spoilers of the peace process, and implementation might be slowed down in ways that turn aspirations into frustrations, ultimately triggering a return to conflict.  

Providing technical expertise and financial resources to assist in building local capacity to implement and operate the institutions agreed upon in a settlement is indispensable for the success of subnational governance reform , and, by extension, for building sustainable peace. It is important to note that the foundations for the success of this assistance can, and must, be laid much earlier, including through more regular engagement in peace processes already at the negotiations stage. 

Our case studies highlight the roles that the international community can play to provide the underpinning economic, social, and political analysis that needs to inform the design of appropriate arrangements. This will often require looking beyond economic efficiency considerations to take account of the broader package of institutions that can underpin a new political settlement. It could also involve more structured discussions around fiscal federalism, recognizing that more autonomy at the subnational level, especially in otherwise quite centralized, unitary states, may actually strengthen national unity  through establishing additional mechanisms for coordination between levels of government.  

Ultimately, it is the commitment of local actors to peace that will make or break a new political settlement. Yet, our research shows that the international community, including the WBG, can play critical and positive roles in providing the necessary technical knowledge and understanding to inform the design of appropriate local governance arrangements during peace negotiations, and through supporting the rapid implementation of such arrangements following agreement to underpin sustainable institutional reform and economic recovery. As the FCV Strategy makes clear, “sustained engagement, adaptability, flexibility, and presence on the ground” are crucial for international actors.