Charting the Way Forward: An Initial Framework for a Compact Model for Refugees

Last month’s highly-anticipated UN General Assembly meetings on refugees and migrants resulted in non-concrete and non-binding commitments from world leaders. The New York Declaration and the dozens of reports released on the sidelines of the meetings rightfully recognize displacement as an increasingly long-term development issue, rather than just a short-term humanitarian one. Alongside more funding, the US-led Leaders’ Summit on Refugees also called for expanding access to quality schooling for one million refugee children and legal work for one million refugees.

But translating these pledges into real change for the world’s 65 million displaced, including 21 million refugees, will require more comprehensive solutions. As part of a joint CGD-IRC study group, we have been developing concrete ideas on how to move the global community toward providing refugees and their host communities pathways to self-reliance that can benefit all. Greater attention to education and livelihoods opportunities for refugees is a welcome development, but it is critical to ensure that new financing commitments are not simply funding business-as-usual.

A compact model for refugees

We propose a compact model that brings together host countries, donors, and development and humanitarian actors to pursue a long-term plan to respond to refugee crises. Host countries—a majority of which are developing countries—face resource constraints, as well as sensitive social and political dynamics in supporting refugees. And traditionally, host countries have not been the accountable entity for delivering social services and access to jobs for refugee populations. The operational principles we outline as part of a compact approach emphasize host countries’ financing needs and their disproportionate share of global responsibility-sharing, together with renewed leadership and accountability for achieving improved outcomes for refugees.

The international community can do and is doing more to support the financial costs of the refugee crisis. We must ensure that such financing does indeed deliver the outcomes intended, and in so doing reduce strains and vulnerabilities for host communities and refugees alike. By incorporating binding commitments among stakeholders for funding and policy changes, a compact creates incentives for host governments and donors to make the up-front investments and commitments that help ensure refugees contribute to national development in the longer-term.

There is significant opportunity to apply these principles to emerging financing mechanisms, such as the World Bank’s Global Concessional Financing Facility and sub-window of the International Development Association (IDA) fund, and the multi-donor Education Cannot Wait fund. These platforms have the building blocks of compact-driven partnerships, and our model is built around principles that will help ensure new funding streams better deliver for refugees.

Four principles of a compact model

In a new policy note, we outline four operational principles that form the foundation of a compact approach—shared outcomes for refugees, best practices for program design and management, host country ownership and complementary roles through all phases of the response, and commitment to policy reforms. Emerging financing platforms should incorporate and institutionalize these principles into their policy and operational frameworks, while tailoring specifics to each context. Here’s an overview:

1. Define shared and measureable outcomes for refugees. All actors should agree to a set of shared outcomes for improving refugees’ wellbeing. The compact’s success should be assessed against outcome indicators (e.g., number of refugees working in the formal sector or increases in refugees’ incomes), rather than only against inputs, processes, and activities (e.g., number of refugee work permits issued).
    
2. Employ best practices in the design and management of compact programs. It is critical that all actors prioritize evidence-based solutions and dedicate resources to generating new evidence in displacement contexts. Setting standards for cost analysis, including cost-efficiency and cost-effectiveness, and requiring costing measures as part of proposals and evaluations are also critical considerations. Where evidence is lacking, compacts should invest in and test innovations that could unlock new solutions, including with private sector partners. And to promote transparency, compact partners should set standards for publishing implementation and financing plans, as well as open reporting on costing data and program evaluations.
    
3. Ensure host country ownership, complementary roles, and accountability throughout each phase of the refugee response. Promoting national accountability for refugee welfare is at the core of a sustainable response. Compact negotiations and structures should also recognize the voices and roles of development and humanitarian actors, as well as refugee beneficiaries. All stakeholders should engage in joint, multi-year planning and analysis to inform how actors can work based on comparative advantages. Moreover, linking financing to mutually-agreed benchmarks, including inputs, outputs, and outcomes, will create financial incentives to make progress towards results.
    
4. Prioritize commitment from host governments to undertake necessary policy reforms. Through a joint analysis process, partners should identify key policy and operational barriers to be addressed before (ex-ante) or after (ex-post) the compact is signed. For a compact that aims to improve livelihoods opportunities, for example, host governments should commit to addressing legal provisions on the right to work, as well as operational barriers that can make it difficult for refugees to find jobs.

This set of operational principles reflects a concrete way forward on how to achieve shared responsibility to support refugees. The compact approach provides flexible, multi-year funding that enables host governments, donors, and humanitarian and development actors to work through their comparative advantages. New platforms, such as the World Bank’s Global Concessional Financing Facility and the Education Cannot Wait fund, are the most significant sources of new financing for refugees in decades. They seek to respond at greater scale to the global displacement crisis and expand the response to include critical support in education and livelihoods. We must ensure these new resources deliver transformative results for those uprooted by crisis and conflict, and the host communities providing refuge.