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In 2002, negotiators from the world over met in Mexico to agree on the Monterrey Consensus of the International Conference on Financing for Development. As Simon Maxwell has pointed out, it is an international document on development cooperation that leads with the most vital financing issues and discusses what is needed to make them work better. And that should stand as a warning to those celebrating the Addis Ababa Action Agenda agreed last week. Few remember Monterrey for the fine words on tax and trade because they led nowhere. If the global community doesn’t do better at turning the Action Agenda into concrete policy change, we’ll look back on Addis as a failure.
The Monterrey and Addis declarations don’t look very different. The first substantive section in both is on mobilizing domestic financial resources for development. Both highlight efficient tax systems and administration. Both note the need to strengthen international tax cooperation while giving special attention to the needs of developing countries. Both have substantive sections on international resources for development that discuss foreign direct investment and other private flows alongside trade. And then finally, both share a discussion of aid and official debt, with the 0.7% and 0.2% to LDCs aid targets both prominent in their inclusion.
Director of Technology and Development and Senior Fellow
That language isn’t what people remember about Monterrey, of course. It was the announcements in the sidelines that caught the attention: the multibillion commitments, including the new US Millennium Challenge Corporation. In part, that was because those sideline announcements were actual commitments by someone to do something. And the good language on the broad range of development finance didn’t translate into much in the way of policy action over the subsequent decade.
Below we’ve lined up a few voices from delegates at last week’s conference – what would success in Addis look like to them? I’m with Jonathan Glennie of Save the Children, who says in the video that the good news from Addis is a continuation of the decade-plus consensus: for all the importance of ODA, development finance is about far more than aid. If anything the consensus has broadened: the word ‘migration’ is linked to a positive statement about development impact; there is more language on illicit financial flows and tax cooperation, and much more on transparency (see Rupert Simons of Publish What You Fund on that in the video). And it all underpins a commitment to deliver a global social floor of services to all. Negotiators are pleased with the outcome and the United Nations Secretary General calls it “a major step forward in building a world of prosperity and dignity for all.”
But, just as in Monterrey, the Agenda language doesn’t come with many commitments to actually do something. Take the social floor – the language is in there but the services involved are undefined, and who will pay for them is not mentioned.
The Addis Action Agenda had the ironic advantage over Monterrey that there weren’t any particularly attention-grabbing announcements in side events. The biggest was that the international financial organizations between them said they would add five percent to their lending volumes over the next three years to help achieve the Sustainable Development Goals by 2030. No surprise that didn’t lead to an explosion of headlines. There were some helpful but piecemeal commitments around data and supporting tax collection, but pretty much the focus had to be on the Agenda because there wasn’t anywhere else to look. Perhaps that will help the Addis text live on in a way that the Monterrey text did not.
But that also means there is an awesomely long way to go to turn this restatement of principles into something that can help to deliver on SDG targets, including wiping out global poverty, providing universal modern infrastructure access, slashing maternal and child mortality, and reaching universal secondary education.
Now is the moment to be delivering on actual policy change: the dropped trade barriers, the multilateral tax treaties, the scaling up of resources for international financial institutions, the specific focus on migration as a tool for development, and the massive ramp-up of research and development to deliver on global public goods, from low carbon energy sources through an AIDS vaccine. That’s how Addis could be a real success for future generations. It is no time to be resting on the stunted laurels of agreeing on commitment-free language in a distant conference room.
The world, as they say, is moving “beyond aid.” As true as that may be in aggregate, however, the trend doesn’t apply evenly across groups of countries. While fairly significant data gaps prevent a complete and unbiased picture, the available data show that ODA remains a comparatively prominent source of external financing for fragile states.