A few weeks ago, the World Bank’s soft-lending arm IDA held the mid-term review of its 18th round of funding. As background for the meeting, the World Bank produced a status update of the new IDA Private Sector Window (PSW) that I have blogged about before. The update provides valuable insight into how the $2.5 billion of PSW funding is being used at the halfway mark of its spending cycle but leaves some big unknowns.
CGD Policy Blogs
CGD’s Study Group on Technology, Comparative Advantage, and Development Prospects is looking at current technology trends, including those around automation and artificial intelligence, and thinking through what they might imply for global economic growth and the distribution of income into the future. As part of that effort, and alongside meetings, papers, and blogs, we are launching a series of podcasts with Study Group members and other experts called Sounds Robotic.
It is now abundantly clear that aid money will provide only a fraction of the resources needed to reach the Sustainable Development Goals. That realization came early on, and it was a central theme of the Addis Financing for Development conference of 2015, held before the SDGs were even signed.
The Future of Work is all the rage—the latest World Bank World Development Report is dedicated to the issue, the World Economic Forum and McKinsey have issued multiple reports, and "your job is being stolen by a robot" articles are being churned out at a rate that suggests IBM’s Watson has been reprogrammed to deliver 50 think pieces a day. We’ve been here before, of course: dire warnings of a machine age of mass unemployment have been around for at least a century. Is this time different?
In my last blog post on the IDA Private Sector Window, I noted the strong principles on subsidies to the private sector that were agreed by the heads of the multilateral development banks (MDBs) in 2012 as part of the Multilateral Development Bank Principles to Support Sustainable Private Sector Operations. Those principles can be summarized as “start with the public policy problem, use open offers or competitive approaches, maximize transparency.” It is interesting to compare the MDB principles to the principles which later emerged from the DFI Working Group on Blended Concessional Finance for Private Sector Projects.
UN Secretary General Antonio Guterres has said gender equality at the United Nations is “an urgent need – and a personal priority. It is a moral duty and an operational necessity.” Guterres was quick to meet his goal of gender parity in UN senior management. But 18 years past an initial 2000 target date for gender parity in the UN system as a whole, there is still a long way to go. The organization remains off track to meet the new target for parity at all levels by 2030. There is also evidence that the rate of change will be hard to boost without a new approach.
I have previously suggested that the current design of the $2.5 billion World Bank/IDA Private Sector Window (PSW) seemed an inefficient use of scarce aid resources, didn’t follow the World Bank’s own guidance on disclosure and design of subsidies to the private sector, and is noncompetitive, nontransparent, and unstructured. In this blog post, I offer some ideas on how the World Bank Group could reconstruct the PSW towards real development impact in the next round of IDA funding, to be negotiated in 2019.
“IFC 3.0” is a welcome and important initiative for a development finance institution that in the past has been accused of putting profits before impact. But the IDA PSW instrument is a throwback to the old IFC—opaque as well as inefficiently targeted on development results. Designing “PSW 2.0” should be an urgent priority at the IDA 18 Mid-Term Review in November.
The Women, Business and the Law program at the World Bank has done a wonderful job of cataloguing the thousands of legal restrictions worldwide that constrain women’s abilities to be equal participants in the economy—from legislation mandating women ask a male family member for permission before opening a bank account through rules banning women from certain jobs to unequal property rights. Pairing that data with surveyed outcomes would make it an even more powerful tool.
Government contracts are worth trillions of dollars. Publishing contracting information is critical to enabling fair competition, allowing public scrutiny, and reducing opportunities for corruption. But when is it legitimate to redact commercially sensitive information from these documents?