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Today the IFC announced a step forward in its transparency around the use of aid resources to finance private companies. That’s right and proper: When scarce aid, and scarce tax resources, are used to support private firms, citizens of donor countries and recipient countries alike have a right to know where the money is going to and how generous the terms. A number of us at CGD had been calling for greater transparency around subsidies to the private sector from the IFC and other development finance institutions, so this is a welcome first step. However, a few aspects have might be cause for concern.
In a new CGD working paper, we try to measure the impact of one of the most significant open contracting reforms worldwide, which took place in Ukraine in the last few years. Since 2015, the country has overhauled its procurement system, including the introduction of an e-procurement platform called ProZorro.
The Independent Commission for Aid Impact (ICAI) issued a report this week on the performance of CDC–the UK’s development finance institution–in low-income and fragile states. ICAI gives CDC an Amber/Red rating on its performance, which means “unsatisfactory achievement in most areas, with some positive elements.” In particular, the commission says that CDC has not done enough to monitor its performance.
Please join us next Thursday, March 14 at CGD’s DC office as we launch the Principles on Commercial Transparency in Public Contracts. At their heart is the idea that redaction on the grounds of commercial sensitivity should only occur if it is in the public interest.
The UK’s 2015 National Aid Strategy committed all departments to be “Very Good” or “Good” on Publish What You Fund’s Aid Transparency Index (“the Index”). We look at a leading indicator of transparency and conclude that, beyond DFID, progress has been almost non-existent. With a spending review to set budgets to 2022 expected next year, departments should take the last chance to step-up their performance and HM Treasury should not renew their spending if they don’t.
When companies and governments sit down to negotiate the terms for major deals with the private sector, workhorse spreadsheet models are what underpin projections of revenues, costs, and profits over time. Both companies and government agencies should have their own models. But in practice, on the government side, there is often no model at all. And even where there is, they are poorly understood, narrowly shared, and rarely if ever updated, leaving the public completely in the dark about how public assets and deals are managed.
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?
Aid and development transparency has come a long way in ten years. In this, the first of a two-part blog series, we look back at the origins of the aid transparency movement. We reflect on the original vision of those who conceived the idea, and the journey to date including some of the successes achieved along the way.