Since its establishment more than 54 years ago, the United States Agency for International Development (USAID) has expanded into an $18-billion-a-year agency, operating in over 145 countries and in nearly every development sector. But USAID is often constrained in its ability to adapt to emerging development challenges due to differing political priorities among key stakeholders and resource constraints. This memo is the result of a roundtable discussion in July 2016 on how the next US administration, in close concert with Congress, can build upon and maximize the development impact of USAID.
Women’s economic empowerment is increasingly recognized as critical to achieving development outcomes around the world. Informed by a roundtable discussion at the Center for Global Development (CGD) and additional suggestions from CGD researchers, this four-point memo aims to issue practical proposals for the next US administration, particularly aimed at economically empowering women and girls worldwide, as a building block toward the full realization of broader gender equality and women’s agency and empowerment. The recommendations build on those in CGD’s The White House and the World briefing book, as well as the CGD policy memo “A US Law or Executive Order to Combat Gender Apartheid in Discriminatory Countries” and ongoing work at CGD focused on women’s financial inclusion.
Many developing countries have made progress in political openness and economic management but still struggle to attract private sector investments. Potential investors to these countries have many concerns that can broadly be classified into high costs and high actual or perceived risks. Drawing on insights from existing guarantees offered by bilateral development agencies, national governments, utility companies, and even shopping malls, we suggest that Service Performance Guarantees can be part of the solution, offering investing firms the opportunity to purchase insurance against a wider range of risks than is currently possible and establishing a partnership of donors and recipient governments, accountable to their investor clients.
The United States Government has the requisite technical know-how, financial and logistical resources, and bipartisan political support to lead the response to enduring global health challenges, and it is critical that the United States is prepared to meet them. This memo’s six recommendations are the result of a roundtable discussion on how the next administration and Congress can update and improve on the US global health engagement model.
Making Room for Mental Health: Recommendations for Improving Mental Health Care in Low- and Middle-Income Countries
Development assistance for health has increased dramatically over the last decade, but investment in mental health has been minimal. Less than 1 percent of development assistance for health goes to mental disorders although they represent at least one-fourth of the years lost to disability and about 10 percent of the global burden of disease. Spending a little on mental health could achieve a lot.
More Than a Lightbulb: Five Recommendations to Make Modern Energy Access Meaningful for People and Prosperity (brief)
The world will struggle to achieve the goals of ending extreme poverty and hunger by 2030 unless there is a sharp increase in agricultural productivity in Africa. Across sub-Saharan Africa, most people live in rural areas and rely on agriculture for their livelihoods; most of them are poor and many are hungry. Could genetically modified organisms (GMOs) help to address some of the causes contributing to Africa’s lagging agricultural productivity? Our answer is a qualified maybe.
As recently as 2011, only 42 percent of adult Kenyans had a financial account of any kind; by 2014, according to the Global Findex, database that number had risen to 75 percent. In sub-Saharan Africa, the share of adults with financial accounts rose by nearly half over the same period. Many other developing countries have also recorded gains in access to basic financial services. Much of this progress is being facilitated by the digital revolution of recent decades, which has led to the emergence of new financial services and new delivery channels.
Many researchers and policymakers have hypothesized that funding models tying grant payments to achieved and verified results — next generation financing models — offer an opportunity for global health funders to push forward their strategic interests and accelerate the impact of their investments. This brief, summarizing the conclusions of a CGD working group on the topic, outlines concrete steps global health funders can take to change the basis of payment of their grants from expenses (inputs) to outputs, outcomes, or impact.
In the search for sustainable sources of finance for development, the potential for developing countries to collect more domestic revenues from taxation has risen to prominence in recent years. International tax evasion and avoidance and the role of tax havens have been raised as critical barriers, and transparency is often advocated as a key solution. This briefing offers a short outline of the key issues, terms, and numbers involved.
US strategy in the Middle East and North Africa has not changed in the past 40 years, favoring security approaches over political and economic development, narrow partnerships with select regime elements over broader engagement with governments and people, and short-term responses and interventions over long-term vision. Symptomatic of this strategy is the fact that US security assistance vastly outstrips economic assistance.
The United States has been at the forefront of providing several development-related global public goods, including peace and security via its contributions to international peacekeeping, the monitoring of international sea trade routes, its engagement in forums such as the Financial Action Task Force to stem flows of funding to terrorist organizations, and more. Yet it has not fully capitalized on its comparative advantage in research and development at home that matters especially for the world’s poor, or on its opportunities for globally transformative investments abroad in such areas as clean power and disease surveillance. We propose two areas where the United States should lead on providing even more transformative global public goods.
The Commitment to Development Index ranks 27 of the richest countries on their dedication to policies that benefit poorer nations. Denmark takes first in 2015. The UK is tied for sixth while the United States is 21st. Japan takes last of 27.
In this series, we present more than a dozen concrete and practical policy proposals — ranging across trade, energy, migration, investment, and climate policy, as well as greater effectiveness of US foreign aid programs — that will promote growth and reduce poverty abroad.
The United States is not using trade as effectively as it might to promote development. The executive and legislative branches of the US government have long recognized that trade can be an important tool to help poorer countries generate resources, create jobs, and reduce poverty. They also recognize that growth in developing countries contributes to global prosperity and growing markets for US exporters as well. Despite that, the few significant US trade barriers that remain often target agricultural and labor-intensive products in which developing countries have a comparative advantage.
Climate change is a threat not only to prosperity in the United States but also to national security, foreign policy, and development objectives throughout the world. Hurricane Sandy served as a reminder of the destruction to life and property from extreme weather events, which are likely to become more frequent and severe. Likewise, extended drought in the Southwest illustrates how climate change could affect agriculture, energy, recreation, and other major sectors of the US economy. The implications of climate change for the development prospects of poor countries are even worse. Lacking infrastructure, financial assets, insurance mechanisms, or strong institutions to cushion the impacts, developing societies remain highly vulnerable to natural disasters, including those resulting from increasingly irregular climatic conditions. The poorest households are most vulnerable — their houses often perch on steep, landslide-prone hillsides around cities or in coastal floodplains, and smallholder farmers lack irrigation and depend on increasingly erratic seasonal rains.
US development policy was built for a world that no longer exists. When the US Agency for International Development (USAID) was created in 1961, foreign aid was by far the most important flow of resources to developing countries. Today, aid is a relative sideshow. International migrants send roughly four times more money home to developing countries (close to $500 billion per year) than all donors disburse in global aid (roughly $130 billion per year). Remittances sent from the United States to Latin America and the Caribbean ($32 billion per year) are more than five times the combined US economic and military assistance to the same countries (less than $6 billion per year). Individuals earn much more in the United States than in their home countries, and they develop valuable skills through migration, often transmitting useful ideas and technologies back to their home countries.
The future of development policy is in development finance. Developing countries need aid less and less as their incomes rise and economies grow. What they need now is private investment and finance. US development policy, however, has failed to bring its development finance tools in line with this reality. Related US efforts have not been deployed in an efficient or strategic manner because authorities are outdated, staff resources are insufficient, and tools are dispersed across multiple agencies.
Other players are doing more. Well-established European development finance institutions (DFIs) are providing integrated services for businesses, and these services cover debt and equity financing, risk mitigation, and technical assistance. Moreover, emerging-market actors — including China, India, Brazil, and Malaysia — have dramatically increased financing activities in developing regions such as Latin America and Sub-Saharan Africa.