| Author: | Damian Lilly, Mark Bowden |
| Date: | 19.12.2024 |
| Downloads: |
Paper (EN)
|
Time for better regulation
Humanitarian organisations are in the business of saving lives, not making a profit. Nevertheless, the humanitarian system does display characteristics of an economic marketplace.
In the multi-billion-dollar humanitarian sector aid agencies are motivated by the need to maintain (or increase) their income as well as carry out their humanitarian mission.
At a time of skyrocketing humanitarian needs, the humanitarian market is currently shrinking as key donors decrease their funding. In 2023, UN-coordinated appeals experienced their largest fall in funding on record. The 2025 Global Humanitarian Overview (GHO) was launched in December 2024 with a price tag of $47.4 billion and scaled back target to reach 189.5 million with humanitarian assistance – 60 million people fewer than in 2023 (OCHA, 2024). Several large UN agencies and NGOs have faced major budget deficits causing them to cut programmes and lay off staff, with accusations of mismanagement by those affected. This time of adversity should be an opportunity for much needed reform in the humanitarian system, but aid agencies are driven as much by self-preservation as they are by the need to improve the way they provide assistance to crisis-affected populations.
To the extent that the humanitarian system does operate as a marketplace, this paper suggests that it is a dysfunctional one in which the economic incentives are skewed to the detriment of achieving the effective and efficient delivery of humanitarian assistance. Much has been said about how the humanitarian system is broken and in need of reform. Multiple initiatives have been launched to bring about transformative change, but few have had meaningful results. This paper suggests that it is only by addressing the economic incentives that shape the humanitarian system that progress can be made to reform it. The humanitarian marketplace is largely unregulated and, while the notion of regulation might be anathema to many humanitarians, there is a case for better regulatory measures that both harnesses the positive aspects of the internal market forces in the humanitarian system, but at the same time enhance oversight and accountability. At a time when the humanitarian market is shrinking there is the opportunity to shake up the system and make it more fit-for-purpose for meeting the growing needs of affected populations.
