Prior to the Busan High-Level Forum in November 2011, this ODI Briefing Paper responds to the growing awareness that fragile states require fundamentally different approaches from the development models exercised in more resilient countries, because of the different context of risk.

It posits that the major disconnect in funding and policy coherence between development and humanitarian/peacekeeping aid flows is a demarcation that stifles opportunity and innovation. 

It lays out some innovative approaches to budget strengthening in fragile states, and puts forward a series of policy recommendations for both country institutions and development partners to achieve higher levels of speed and flexibility in financial management. This includes increasing the predictability, transparency and coordination of all financial flows - including all external assistance - and a focus on 'shadow alignment', that is, utilising country systems and institutions, and building governmental accountability, while finding inventive ways to mitigate the political risks.