A/HRC/28/59 State.23 Weakening a State and its law enforcement institutions may sometimes increase the probability of gross human rights violations by further decreasing State capacity. However, just providing funding to a weak or failed State, or its law enforcement authorities, is unlikely to ensure the building-up of State institutions based on the rule of law and respect for human rights. The risk is that resources will rather be invested in repressive, State structures that disrespect human rights, or allocated to sustaining patronage networks. 30. As every situation needs to be separately assessed, lenders should respect fundamental due diligence standards, in order to understand the likely consequences of their own behaviour. Risk analysis should not only be focused on the likelihood of whether the loan will be serviced in the future, but needs to assess the impact lending will have on the population and their enjoyment of human rights. That includes not only considering whether the funds will consolidate an authoritarian regime, but also whether the debt obligations imposed on future generations of the country are just. To make informed decisions about their lending, States, the international community, multinational financial institutions and private lenders need to understand how the regime finances itself; to what extent it is dependent on external financing; which State agencies or other actors are mainly responsible for gross human rights violations; what the intentions of the regime are; and whether there are opportunities for a transition to democracy. When financial assistance would predictably contribute to strengthening a regime perpetrating gross human rights abuses, lenders should refrain from allocating funding that will sustain it. Curbing lending under that scenario would ceteris paribus presumably lead to lower levels of human rights abuses in the country. 31. The Special Rapporteur of the United Nations Sub-Commission on Prevention of Discrimination and Protection of Minorities explained that point in his report on the financial contributions received by the Pinochet regime: depending on the circumstances, financial assistance can have a positive or negative impact on the human rights situation of any given country. Loans with the precise objective of building houses for the poorest and funds that are earmarked to alleviate suffering will be less likely to have a negative impact than loans granted for general spending needs. 32. To some extent, State behaviour has already become sensitive to such human rights arguments. A recent study analysing how States responded to physical integrity violations in developing countries in their bilateral development assistance between 1981 and 2004, revealed that, overall, donor States reduced their infrastructure, general budget and programme support for countries in which physical integrity violations had increased. On average, however, in such countries they maintained their development spending for the social sector, including health, education and water supply, or the promotion of human rights and democratization. 24 However, bilateral development financing is only a small part of all financial support or lending and the Independent Expert is not aware of studies that have analysed in a similar way non-concessional lending by States or private lenders. 33. Experience with past lending and recent developments should be analysed by lenders to enable them to recognize changing trends. A due diligence analysis should take into consideration at least the following information and factors: the amount, type, objective and timing of the proposed loans; information from post-disbursement monitoring of earlier loans; the growth of debt and the sustainability of public funds to service further debt; the type and character of gross human rights violations and potential changes in the 23 24 For an empirical study providing evidence for this trend, see, for example, Neil A. Englehart, “State capacity, State failure, and human rights”, Journal of Peace Research, vol. 46, No. 2 (March 2009). Richard A. Nielsen, “Rewarding human rights? Selective aid sanctions against repressive States”, International Studies Quarterly, vol. 57, No. 4 (December 2013). 11