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 societies 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 refers to states or parts of states that are exposed to high environmental, social, security and other risks but do not have the capacity to mitigate or manage them and protect their populations from the consequences. 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 the reconstruction of hospitals, schools and bridges, for example, but also cash-for-work schemes and the establishment of financial services for reconstruction. One focus is placed on especially vulnerable target groups, such as refugees, internally displaced persons and returnees. KfW provides targeted support to countries hosting refugees in order to stabilise local communities and achieve sustainable solutions to refugee crises. In this area, KfW primarily promotes the provision and restoration of infrastructure and basic services for the affected people themselves, but also for the residents of the host communities, as in Uganda, Ukraine or Iraq, for example.

Avoiding crises is another of KfW’s aims. Here, the focus is on medium and long-term measures, such as the improvement of basic infrastructure in disadvantaged regions, promoting good governance (see below), the development of social security systems, employment promotion for young people and the unemployed, and supporting local economic activity and focused measures to prevent violence. These efforts abolish social and economic inequalities, improve governance and strengthen social cohesion.

Responsible governance is required to make societies fairer, more peaceful and more inclusive. Effective, inclusive and accountable institutions, as well as general conditions conducive to development are considered a basic prerequisite for sustainable development, the fight against poverty and inequality, and the promotion of peace. Good governance includes, in particular, democracy, political participation and proximity to citizens, the rule of law, respect for, protection and guarantee of all human rights, functioning state institutions, functioning public finances and freedom from corruption. Good governance includes the way in which political content is formulated, decisions are made and funds are used in a state – or even in organisations and companies. It is about dealing responsibly with state power (at all levels), but also about responsible conduct by non-state actors and constructively shaping relations between state and non-state actors. In Peru, for example, KfW uses policy-based financing to promote the modernisation of the administration and reduce its susceptibility to corruption. This is intended to improve the performance of institutions at the central government level and in the regional authorities.

For historical reasons, many states are still 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 everyday 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. Among other things, KfW therefore supports reforms that give local authorities more responsibility. To do so, the bank often uses municipal development funds in which citizens themselves have a say in what the funds are used for.

Municipalities are regarded as key players in addressing current and future national and global challenges at local level. Good governance, capacity to act, efficiency and transparency at local level and citizen participation contribute to peace and social cohesion. And these are a prerequisite for municipalities to be able to adapt their public services to changing challenges – be it the changing needs of citizens in the course of economic development, new challenges as a result of climate change, or the taking in of refugees. In this way, municipalities make an important contribution to achieving the Sustainable Development Goals (SDGs). KfW supports municipalities in meeting their responsibilities and overcoming their challenges, e.g. in Benin. These include, in particular, financing municipal infrastructure and improving local public services, promoting local climate resilience and efficiency, supporting communities in the face of refugee crises and implementing conflict-prevention measures, as well as the promotion of important digitalisation processes to improve the efficiency and effectiveness of public administrations and citizen participation.

To be capable of acting, states require strong institutions, which means 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.