SDG 16 – Peace, justice and strong institutions

Avoiding, containing and ending conflicts as well as taking measures to prevent conflicts from flaring up again are all main priorities of development cooperation. Nothing is more damaging to people’s lives and the advancement of society than violence and instability. While the promotion of peace has been a core priority of the international community since the last century, the concept of a fragile state was not established until the turn of the millennium. This term denotes states or parts of states that demonstrate significant deficiencies in their ability to function: be it in the democratic and legal control of their state monopoly or the adherence to human rights and the rule of law. No matter what the specific circumstances are, the result is always the same: weak state structures that hinder development rather than promote it, and a population that is insufficiently protected against the adversities of life. KfW supports its partner countries through a range of projects and programmes that aim to limit the effects of violent conflict and counteract renewed outbreaks of violence. For example, once a violent conflict has ended, the bank promotes both emergency aid measures, such as food aid, to secure people's existence, as well as social, economic and political reconstruction measures which aim to bring about long-term peace and to increase the resilience of societies against crises.

Such measures include, for example, the reconstruction of hospitals, schools and bridges and also cash-for-work schemes and the establishment of financial services for reconstruction. Particular focus is placed on especially vulnerable target groups, such as refugees and displaced persons within the country itself. In this area, KfW promotes infrastructure and basic services primarily for the victims themselves, but also for the residents of the host communities.

Avoiding crises is another of KfW’s aims. Here, the focus is on medium- and long-term measures, such as abolishing infrastructure-related undersupply in disadvantaged regions, promoting good governance (see below), establishing social security systems, employment promotion for young people and the unemployed, support for the private sector and measures to prevent violence. These efforts abolish social and economic inequalities, improve governance and strengthen social cohesion.

Good governance is required to make societies fairer, more peaceful and more inclusive. It is the necessary and decisive framework for sustainable development. It includes constitutional systems that function with transparency rather than arbitrarily, as well as decentralised decision-making structures and citizen-oriented administration. The involvement of the people and combating corruption also play a decisive role.

Many states are, for historical reasons, centralistic. Decisions are often made in the capital city, or at best in regional centres. As a result, people who live in remote, rural areas often feel excluded; important aspects of their every-day lives are insufficiently reflected in laws and regulations. Decentralisation therefore makes a contribution to the democratisation and stabilisation of a country. What is more, it can also make local administrations more effective, as it is more apparent at local level what needs to be done most urgently. KfW therefore supports, among other things, reforms that give local authorities more responsibility. To do so, the bank often uses municipal development funds in which the citizens themselves can co-determine what the funds are used for.

To be capable of acting, states require strong institutions, meaning efficient and transparent administration. It is only then that a constructive relationship between state and society can flourish. Strong-rooted monitoring mechanisms are also important to counteract tendencies towards despotism and autocracy. KfW therefore supports free and independent elections, systems for clear ownership rights such as land register systems, a strong public finance system and tools for parliamentary and legal oversight.

Digitalisation can render good services in all these areas, which is why the development bank drives forward e-governance in its partner countries. Furthermore, through the "Policy Based Financing" development approach, KfW makes a significant contribution to strengthening good governance, especially in reform-orientated and advanced partner countries.