Development is a risky, complex business. So it’s not surprising that development experts sometimes question why private investors would choose to invest in Development Impact Bonds (DIBs), a new model for funding and designing programs that address such seemingly unprofitable problems like disease burden or poor education outcomes.
CGD Policy Blogs
At a recent book launch, I was on a panel on which we were asked whether we can show that aid is a good use of public money, if the problems it aims to tackle are complex. I replied with a half-remembered statistic, which (now that I have had a chance to look at the numbers) turns out to have been right. It was this:
President Obama earlier this week made a last minute appeal to donors to the Global Fund to Fight AIDS, Tuberculosis and Malaria. Offering a US pledge of $1 for every $2 pledged by other donors for a total US pledge of up to $5 billion, the president said, “don’t leave our money on the table.” Well, the initial commitments are in, and it appears that there will in fact be US money left on the table. Donors to the Global Fund announced total pledges of $12 billion, suggesting a US commitment of about $4 billion.
“Too often, donors’ decisions are driven more by our own political interests or our policy preferences than by our partners’ needs.”
These charged words did not come from an energetic NGO arguing for major changes to US development policy. They were delivered by then US Secretary of State Hillary Clinton to a high-level gathering of development officials in late 2011.
MCC’s board of directors will meet on December 10 to decide which countries will be eligible for compact and/or threshold program assistance for FY2014. CGD’s Rethink offers a preview of the issues the board will grapple with, as well as a prediction of which countries they will select.
My guest on this week’s Global Prosperity Wonkcast is CGD senior fellow and director of the Rethinking US Development Policy program Ben Leo, here to discuss his new CGD working paper, Is Anyone Listening? in which he examines how well US foreign assistance aligns with the priorities of people in recipient countries. Answer: not so much or, as Ben puts it more diplomatically: “the alignment is modest at best.”
When the post-2015 process kicked off, I was regularly asked what the new MDGs should include. My response almost always raised eyebrows. I’d say “whatever ordinary people want them to be” and that decision makers should ask them (not people like me). Not highly choreographed ‘consultations’ with interest groups and stakeholder representatives. No, that’s far too old school and distortionary. Instead, those coming up with new global goals should just ask ordinary people about their priorities through open-ended, representative surveys.
A $1 trillion financing partnership to support ending extreme poverty, stopping avoidable child deaths, and meeting other widely supported post-2015 development goals sounds far-fetched. But improbable action is what will be needed if we’re going to come close to making such historically unprecedented progress. Indeed, delivering on proposed zero goals is going to take a broad and deep global partnership that’s about far more than aid.