My Ten Development Policy Wishes for 2015

I find it harder than ever to make such a list this year. CGD is especially concerned with the policies and practices of the rich and powerful countries, corporations, and individuals that affect the world’s less fortunate people, especially the 5 billion least fortunate who live in the developing world. In our ever-more-interdependent global system, the rich and powerful can have the largest impact for good through global cooperation on collective action problems. (Think climate change, drug trafficking, conflict-driven humanitarian crises, global financial panic, pandemic disease risk.) Failure to cooperate on these global “bads” is bad for everyo­ne but catastrophic for the poor.

But global cooperation is becoming harder than ever to manage. For decades after World War II, the United States led, with Europe an influential partner or follower. But the United States, preoccupied with a jobless recovery and a frustrated middle class, is less able and willing to lead; and in Europe, economies are weaker and voters growing more restive and insular. With the rise of China and other emerging markets, cooperation in what is now a multipolar system is more necessary than it has been in decades, but more and more elusive.

That puts a premium on strengthening the world’s international institutions and on—yes—UN and other international conferences and convenings and conversations in search of a global consensus on norms, programs, actions, and goals. In 2015 there are three big global convenings that matter for development. Each is what insiders call an “actionable event”—actionable because its very existence creates healthy pressure on countries, particularly large and powerful ones, to come up with something to announce: some commitment for which we, the global development community, can then hold them accountable.

Here are my wishes for commitments that countries could make at each of three big development-relevant international events in the next 12 months.

Financing for Development, Addis Ababa, July

My Addis Ababa wish list is modest: if not action, I hope for at least traction for these ideas in 2015:

1.       Outcome-based aid

That official funders commit to more disbursements based on outcomes in their aid programming, aiming to have at least 20 percent of their aid, by 2020, programmed to pay ex post for verified development outcomes in recipient countries. We know it works. UK DfID is paying for successful learning at schools in Ethiopia; Norway for reducing deforestation in Brazil , and the World Bank for bridges built and maintained in Nepal. In the United States, the Millennium Challenge Corporation is exploring the idea.

2.       Sin taxes—for development

I refer to taxes on tobacco and on carbon—not to raise revenue (indeed they could be revenue-neutral) but to reduce the costs that these “bads” impose on everyone, with disproportionate costs on the world’s poor. I wish for rich countries to come to Addis promising to tax carbon and developing countries to come promising to tax tobacco. For more on carbon, see my 2011 and 2014 lists and this “fantasy” on a carbon-free world in 2030; on my 2009 wish for a US variable gasoline tax go here. (I’m newly hopeful with the market price of gas so low.) On smoking and tobacco taxes, go here.

3.       More IMF resources—for global stability and growth

That Brazil, China, India, and other leading emerging-market countries, all of whom have approved the IMF quota increase, use the Addis event to call on the US Congress to act to finally end the United States’ embarrassing blockage of that increase.) Some will say this should be left to quiet negotiations between the Obama Administration and the Congress. But if by July Congress hasn’t moved on it, I wish for some international naming and shaming. After all, most Americans do care about their moral standing in the world.

4.       More multilateralism in financing for development: more capital for the old and the new multilateral development banks

The United States and China could together take the lead in a renewal of multilateral financing of sustainable and inclusive growth. They should negotiate commitments of capital ($20 billion each would be reasonable) in the next five years to multilateral banking, divided between the old and the new multilateral development banks for public infrastructure. The “old” MDBs (World Bank, Asian, African, and Inter-American Development Banks) are looking for ways to stretch their capital and reform their governance to make it more representative and inclusive; the “new” MDBs (the Asian Infrastructure Bank, the BRICS Bank), are looking for capital and developing their own anticorruption rules and environmental and social standards. For the world as a whole, a commitment to maintain and extend a multilateral approach promises efficiency and fairness.

The United Nations General Assembly and the Sustainable Development Goals, New York, September

As with the MDGs, we will never be able to attribute progress ex post on a particular SDG goal to its existence. But the SDGs do matter because they reflect the consolidation of a global consensus about the rights and responsibilities of global citizens in an interdependent global community. (“Global citizens” often act locally; see good comments on Constituency Development Funds, “local faith communities,” and “local government for accountability and transparency” in the responses to my request for ideas.

My three SDG wishes have to do with tackling inequality in different ways.

5.       The median: universal, robust, distribution-aware

That some meat be put on the growth (#3 on the list proposed by the Secretary-General’s Open Working Group) and inequality (#10) goals. I’m in favor of making the median a universal indicator of growth and inequality. Every country (rich and poor) commits to set its own target number, in its own currency, for higher median daily consumption per person in 2020, and to reset it in subsequent five-year intervals. Ideally the targets would be net of taxes and transfers, reflecting each country’s “commitment to equity.” The result: the resulting median targets would be widely tracked and published in every country, and would put energy (and international finance where needed) behind a data revolution on household data and tax transparency in all countries, rich and poor.

6.       Immigration targets—to reduce global inequality

Rich countries should announce specific annual additional allowances for immigration quotas for victims of natural disasters and local conflicts in developing countries. The only reference to migration in the proposed SDG list now has to do with reducing the cost of remittance transfers. Yet about 70 percent of all global inequality reflects the cruel lottery of country birth, that is the huge differences in income across as opposed to within countries, and legal barriers to immigration are leaving trillions in unexploited income gains for the world’s poor on the sidewalk.

7.       Publish What You Buy to reduce corruption, publish anonymous income and wealth tax data too

It’s surprising that the 17 draft SDGs and the proposed 169 targets make little mention of transparency . . . of anything. In Addis more countries should commit to publish the contracts they make with private providers. Read about who does and why here and here. And governments—all governments—should make it easy for analysts to unpack what’s behind the distribution of after-tax income (see #5 above), especially at the top of the distribution, by publishing anonymous tax return data, as Piketty says in his best-selling book (and which as I argue here matters for development.)

The climate conference, Paris, December preceded by the Climate Summit, New York, September

The best that can be hoped for from Paris is that countries’ voluntary pledges of domestic action to reduce greenhouse gas emissions are more ambitious than expected. Beyond that my two wishes are straightforward.

8.       That in New York all countries get specific on their timetable to end inefficient and unequalizing subsidies for fuel. The barrier is politics not budgets, as eliminating subsidies adds to public coffers. Donors could commit, however, to technical help on implementing compensatory cash transfer systems to low-income households using biometric and other new technologies that minimize leakage and corruption and keep costs low.

9.       That in Paris climate negotiators remember tropical forests and rich countries commit big money to paying for the outcome (see #1 above) of reduced deforestation in tropical forest countries, with conventional ODA money, or via voluntary or “market” compliance arrangements.

At all three events

10.    That the delegates reflect anew on the simple point that empowering women is fundamental to more inclusive and sustainable development. May combating sex trafficking and all forms of violence against women be high on the world’s agenda this year; and may more women stay (Christine Lagarde when time comes for another term at the IMF) or rise (at USAID for example, with Administrator Raj Shah leaving) to positions of leadership in our development institutions. To transform the development landscape, we need, after all, “to put an end to the idea that toughness flows from testosterone, and that toughness is top.” Go here to see who said that.

I had to leave aside many good ideas of colleagues and you, kind readers. Please use the comment option to add yours, and complain about mine and my choices.