Who You Calling a Bad Actor? Community Co-Creation and Self-Selection as Private-Sector Alignment Tactics

This is the second blog in a series inspired by the four take-away messages from USAID’s primer on private-sector engagement in fragile and conflict-affected situations, and it focuses on managing private-sector actors who are problematically invested in maintaining a fragile, humanitarian-dependent socioeconomic system dominated by conflict. See the other entries in the series for more on social inclusion, environmental stewardship, and conflict sensitivity as a third dimension to shared value; novel approaches for prospecting potential partners when typical business data don’t exist; and the importance of non-financial support to local businesses and new investors.

Places like the eastern DRC become trapped in cycles of violence and dependence not only because of geographic misfortune, historical exploitation, or predatory neighbors, but because some actors within their socioeconomic system develop an appetite for the status quo. The business community has a natural stake in peaceful, rule-based economic growth, but some parts of the private sector may take advantage of political and social instability for financial gain—bypassing regulations, corrupting officials, exploiting employees or customers, or fostering exclusionary networks based on ethnic, political, or kinship groups. With a vested interest in a fragile, conflict-affected system, such economic actors may be averse to efforts to change it, and they can even undermine donor-funded projects with a mission to do so. USAID’s primer on the topic calls them ‘bad actors’ and recommends that projects take special care to ensure its private-sector collaborators genuinely embrace values like the ones in the first post in this series, and that it is not arbitrarily picking winners and losers in a thin field of potential partners.

Those recommendations feel like they were written especially for USAID’s Strengthening Livelihoods and Resilience (SLR) activity in the eastern Democratic Republic of Congo. On top of its weak infrastructure and endemic militia violence, SLR’s home province of Ituri has suffered from decades of governance practices detrimental to a healthy private sector, and since 2003 it has been saturated with distortive humanitarian money. Some businesses are firmly entrenched in a system that depends on foreign aid and accepts state predation as the norm. Consequently, SLR has found that even when it does good stakeholder engagement and develops solid program ideas, some parts of civil society and the business community are threatened by the changes SLR stands for. When one seed company expanded its sales—and therefore local maize production—in one part of the province, a group of businessmen who profit from importing Ugandan maize flour to sell to humanitarian organizations at a high mark-up started rumors that the new seeds were dangerous and that flour milled from that type of maize would be rejected by the region’s largest school-feeding program, prompting a brief panic. SLR has practice dealing with conflict like this, but its best strategy is not to let ‘bad actors’ side-track its work in the first place.

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The first and best filter

SLR’s first line of defense against falling into misaligned partnerships is its community engagement. Meaningful participation from Ituri’s conflict-stricken communities is time-consuming and far from predictable or linear, but it empowers people to voice their needs and begin to shed the mentality of aid recipients. Some parts of this approach were counterintuitive for many SLR team members—those with a professional background in humanitarianism struggled to find the patience and flexibility required to co-create activities with communities, and those attempting to import MSD principles into this resilience activity were uncomfortable with its level of visibility and sought ways to remain a good facilitator. However, in extremely thin markets, a heavier programmatic hand is sometimes necessary, and in places beset with conflict where no intervention is neutral, even a ‘facilitator’ has an important responsibility to minimize unintended harm to the system it is trying to change. Faced with similar constraints to the north in South Sudan, Policy LINK describes an approach with the same broad lines as SLR’s.

SLR always begins with stakeholder engagement, its contacts in local government helping it connect to civil society and traditional authorities in each new community. When it can, SLR also involves the private sector at this stage, though sometimes the local branch of the Féderation des Entreprises du Congo, the project’s starting point for networking with the business community, has political orientations that drive the most promising actors out of the picture. SLR never enters a community without an invitation, and if a community changes its mind, the team politely steps away and leaves the door open for reengagement when the community is ready.

Next, SLR reflects on what it learns from contacts in the community and develops a broad strategy (the “gather evidence” step in the South Sudan learning brief). SLR has found that aside from setting some broad parameters based on SLR’s overall scope of work (like avoiding healthcare or construction activities it doesn’t have the expertise or mandate for), the best starting point is just to ask communities what their priorities are. The project comes with its own ideas, but it can usually afford to be agnostic about details: in the lakeside town where it launched its first community partnerships, for example, the team knew from up-front analysis that it wanted to do something linking land tenure to the long-term economic interests of rival herding and farming ethnic groups, like the Élan project rallying historically opposed stakeholders in the coffee value chain further south. However, as long as it was economically sustainable and would create a shared financial interest with their pastoralist neighbors, SLR didn’t care if the farmers grew tomatoes or eggplants. They could make livelihood decisions for themselves. Since SLR was already using a heavy hand and visibly driving the co-creation process, remaining open-minded also created space for the community to step in and exercise ownership, serving as a check against SLR pushing its own agenda too far.

When SLR sent its teams to begin formal co-creation in the middle of its inception year, it did most of its partnering work publicly. It invited nearly anyone expressing interest to participate, it presented and evaluated ideas in a semi-public space, and it included officials and civil-society leaders on the scoring panel. (Policy LINK distinguishes two steps here: sense-making workshops to interpret findings from stakeholder engagement and formal resilience mapping; and local action planning to help translate resilience priorities into action plans.) Finally, once pilots were conceived and general roles agreed upon, SLR began more intensive, bilateral discussions (essentially joint workplanning) with partners on the terms of their co-investment, shared objectives, and timelines. (For more on SLR’s community partnership approach, including the questions it asks itself when preparing a ‘co-creation roadmap’, see these workplan excerpts.)

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Enter (or do not enter) the private sector

How does any of this relate to avoiding bad apples in the private sector?  SLR does not always succeed in reaching relevant businesses through its preliminary stakeholder engagement, and the more serious companies can rarely afford the time to participate throughout multi-day community workshops. However, once concrete ideas emerge from co-creation, SLR can usually insert the private sector into the conversation, often pitching them on a new business opportunity. Businesses are vetted in the same public fashion as any other potential partner, and just as SLR does not begin work anywhere without an invitation, it does not partner with private-sector actors that do not have the approbation of the whole community.

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This tactic addresses two sequential challenges: understanding contextual and unwritten information well enough to distinguish the ‘bad actors’ in the first place, and then being able to safely say ‘no’ to partnering with them. Especially in fragile and conflict-affected settings, information is not readily available showing the true ownership structure, investments, and other interests of businesses (more on this in the next post), so it is difficult for a donor-funded project from the outside to recognize the market actors it may be at odds with, especially since the ‘bad actors’ are often experts at manipulating perceptions about themselves. They also usually thrive through political connections or ethnic alignments, meaning they can become powerful enemies if mishandled. An upfront analysis of conflict dynamics is necessary for the team to get the lay of the land, but developing partnership ideas through community engagement helps SLR address both of these issues, so it invests a greater proportion of its time and energy in community discussions than in preliminary assessments. When an unworthy business presents its pitch in front of the community, someone in the room usually stands up in public (or approaches SLR staff in private) to explain why its interests are not aligned with the community’s, and their concerns are validated (or repudiated) through public discussion. If the community consensus is that SLR should not work with the business, it is the people saying so—not a decision by SLR. This both protects SLR’s team and empowers its community partners.

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The power of self-selection

However, once it begins negotiating with a smaller group of partners on concrete activities, and particularly as it begins implementing them, the team needs a continuous filter. Given the Ituri’s inherent uncertainty and its sparse private sector, SLR uses an iterative approach. An acceptable partner today may turn out to be a ‘bad actor’ with six months of hindsight. Moreover, not every private-sector partnership was tested by the crucible of SLR’s co-creation process: SLR entered two or three partnerships based on vetting conducted before USAID awarded the program to DAI, for example. The team uses ongoing self-selection as a way to ensure its values remain aligned with its partners.

This second powerful filter helps SLR avoid or disengage from partnerships with ‘bad actors’ by setting transparent parameters for working together, supporting its partners to meet those parameters, and then relying on self-selection effects to organically sort out those without a long-term interest in inclusive growth and stability. Put more simply: SLR designs the doorway, opens the door, prepares prospective partners, and then… some of them just don’t walk through it. No hard feelings.

The team experienced this effect most prominently not with the private sector, but with several provincial NGOs with established reputations for a long-term, ‘development’ outlook. They came recommended by government partners and other organizations, SLR heard mostly positive feedback from communities where they worked, and they spoke impressively in initial partnering discussions, mirroring many of SLR’s values. However, time after time, engagement after reengagement, they just never crossed the threshold of a real partnership. Interpretations differed each time, and different participants in the negotiations saw the impediments in their own way, but in the end the NGOs and SLR could not move from the phase of discussion to co-investing resources in concrete activities.

Beyond ‘bad actor’?

These experiences were doubly humbling: first, SLR staff were initially bullish about these potential partners—one year they had even set aside a large percentage of the project’s annual workplan budget for a collaboration with one of them—yet attempts to move from discussion to action proved them wrong; and second, the failure to align with organizations that otherwise appeared to be saying all the right things called SLR’s own values and systems into question. These NGOs railed against reliance on the humanitarian system, called for sustainable economic opportunities for all, and used other rhetoric that aligned with SLR’s values, so it was counterintuitive (and possibly… incorrect?) to believe that they were really beholden to preserving the system the way it was. In the end, the team accepted that SLR was following its own mandate and vision, that prospective partner organizations and businesses might have a different vision for how Ituri could break out of the cycle of violence and dependence on foreign aid—and that sometimes those visions were incompatible. Calling them ‘bad actors’ and assuming they wished to preserve the status quo was an unfair oversimplification. But there was not a practical way to partner with actors with a vision so different from SLR’s without prohibitive frustration on both sides.

Openly discussing how donor projects deal with ‘spoilers’ or ‘bad actors’ in fragile or conflict-affected settings can be sensitive and uncomfortable, but not just because it involves passing judgement. Some potential private-sector partners may indeed be explicitly vested in a dependent socioeconomic system dominated by conflict, and a few may be ready to fight to keep it that way, but more of them fall into a grey area of murky motivations and incomplete self-awareness. It may also reflect poorly on the donor-funded project if it cannot find an appropriate way to reach partners in that grey area. SLR does not have a clear answer for that, other than trust in its community, government, and civil-society partners to guide it (mostly) in the right direction, and its commitment to fair and transparent standards and processes that nudge the right partners in through the door and keep the wrong ones out.

Relying on self-selection effects or the collective wisdom of partner communities alone was never sufficient to steer SLR toward the right partnerships, however. It was always essential for the team to thoughtfully research the socioeconomic context and vet potential partners. Up-front prospecting, however, has a different flavor in a place like Ituri. The next post in this series will explore some of the ways SLR seeks out and vets potential partners when the information it needs is subjective, unwritten, or (sometimes) not even knowable.

Dan Langfitt is a Principal Specialist in DAI’s Resilience & Stability practice. He was the Director of Partnerships and Operations for the DRC SLR Activity until April 2023. SLR’s Léon Zabiti and Pépin Mugisho made major contributions to this piece.