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Would an Advance Market Commitment work in climate finance? CGD visting senior associate Jan von der Goltz joined a panel on Advance Market Commitments (AMCs) at the Marketplace on Innovative Financial Solutions for Development in Paris, March 4, 2010. (For a round-up of the best ideas from the Marketplace, click here. Jan assessed the idea of extending the AMC concept – which CGD pioneered for the vaccine market – to climate finance. The takeaway message: AMCs are powerful tools in dealing with market failure – but they are complex financing structures, and must be tailored to the challenge at hand. It makes little sense to transplant the original AMC structure into the climate field 1:1. Rather, true to the spirit of the AMC, donors should look at the challenges in financing a given climate project, and design an innovative financing scheme that fits them.

I'm joined this week by Ayah Mahgoub, a program coordinator here at the Center for Global Development who works on issues related to the effectiveness of foreign aid. Along with Nancy Birdsall and Bill Savedoff, Ayah is working on designing a new form of development assistance called Cash on Delivery Aid that would pay for progress on specific development outcomes.

Nancy summed up the basic idea of the Cash on Delivery approach on a Wonkcast last month—read that post or go here for a short introduction to the idea of COD Aid. While discussions are underway to develop COD aid mechanisms for a number of sectors (including water and health), the initial application is in education. In this sector, a Cash on Delivery contract would pay recipient governments a fixed amount for each additional student who completes primary school and take a standardized test. Ayah is helping to match aid donors and recipient governments who are interested in supporting a pilot of this innovative approach. I asked Ayah to tell us about the countries where the first COD Aid programs might happen: Malawi, Ethiopia, and Liberia.

My guest on this week’s show is David Roodman, a research fellow here at CGD who has spent the past year writing a book on microfinance. He has shared this experience online through his open book blog, posting chapter drafts, analyzing ongoing research in the field, and soliciting comments and suggestions. I ask David why he decided to write his book in such a public way, and what he’s learned over the last year.

David replies that when it comes to policy research, people write books for four reasons. “One is to help you think through a complicated process… Another is to provide a basis for shorter spin-off pieces… Another is to signal that you’re an expert about something. And then the last is, oh yeah, to write something for people to read.” David says blogging about the book-writing process has helped him to partially accomplish the first three goals even before the book is complete. It has also, somewhat unexpectedly he says, changed his writing style, something he discussed recently on the blog.

Can aid donors find a better way to deliver aid? My guest this week is Nancy Birdsall, president of the Center for Global Development. Along with William Savedoff and Ayah Mahgoub, Nancy is working on a potential new way of disbursing foreign assistance called Cash on Delivery Aid. COD Aid seeks to devise simple, results-based contracts that reward developing countries for making progress towards previously agreed goals—such as increased primary school completion rates, vaccination coverage, or access to clean water.

In the podcast, Nancy explains that the traditional mode of giving aid, in which donors often take an active role in prescribing which actions recipient governments should take, can undermine incentives for governments to identify problems and design and implement locally appropriate solutions. "We have to create a system in which outside resources actually help the developing country governments find out what works in their particular setting," says Nancy.

My guest this week is Rachel Nugent, deputy director for global health here at the Center for Global Development. Rachel directs the Center's work looking at the links between population, poverty, and economic growth and serves as the coordinator of the Population and Poverty Research Network, which held its fourth annual conference recently in Cape Town, South Africa.

Many of us are familiar with how development influences population growth: as incomes rise, fertility rates and average family size tend to fall; populations grow more slowly. Rachel explains that while this relationship is important there are many important unanswered questions about how population policies affect development outcomes. For example: if a poor country slows population growth by actively encouraging family planning, will the families involved and the nation reap economic benefits? Under what circumstances?

In a major policy speech hosted by CGD, Secretary of State Hillary Rodham Clinton declared international development a central pillar of U.S. foreign policy, together with diplomacy and defense. She hailed Raj Shah, recently confirmed as administrator of the U.S. Agency for International Development, and said she intends to rebuild USAID into, “the premier development agency in the world.”

In her speech, Clinton said that, especially in tough economic times, the American people have the right to ask why the United States spends tax dollars to help developing countries. Development overseas is critical to U.S. security and prosperity, she said, and development professionals must do a better job of measuring and communicating the impacts of their work.

I'm joined this week by Nancy Birdsall, president of the Center for Global Development. Nancy introduced Secretary of State Hillary Clinton when Clinton came to speak to CGD last week. On the Wonkcast, she shares her impressions of Clinton's speech and places it in the broader context of U.S. development policy reform—including two ongoing assessments, the White House Presidential Study Directive or PSD and the State Department’s first Quadrennial Diplomacy and Development Review or QDDR.

In the second half of the interview, Nancy reviews the past year in development and offers a policy wish for 2010.