Foreign assistance has come a long way in becoming much more transparent. The idea, pushed by campaigns like Publish What You Fund and embodied in the International Aid Transparency Initiative, is that being more open about concessional aid will lead to less waste and more accountability. So what about non-concessional development finance? As the importance of development finance institutions (DFIs) grows, how transparent are they?
CGD Policy Blogs
America’s development finance agency is constantly being pulled in three directions. The primary mandate of the Overseas Private Investment Corporation (OPIC) is to promote development by catalyzing private capital from US firms in emerging and frontier markets. OPIC is also supposed to support US foreign policy by making commercial investments aligned with diplomatic, security, or democracy objectives. Lastly, OPIC must operate on a commercial basis so projects are both sustainable over the long-term and cost nothing to US taxpayers.
In an ideal world, development finance institutions (DFIs) should focus on the biggest constraints for businesses in developing countries. This helps to expand their impact beyond a single project or investment, thereby producing more systemic benefits. However, this is a particularly challenging issue for many DFIs given their operating models, which are typically driven by investor priorities.
Even among policymakers, there is plenty of misunderstanding around how the US government’s premier agency charged with advancing a private sector-based development agenda, the Overseas Private Investment Corporation (OPIC), actually operates. When we searched for a database with key OPIC project-level information, we couldn’t find one. So we spent months manually entering all of the publicly available information on OPIC projects into a single location, the OPIC Scraped Portfolio dataset.
For years, the Overseas Private Investment Corporation (OPIC) has been attacked by a handful of organizations as corporate welfare. But, were the charges of corporate welfare actually true? My colleague Todd Moss and I spent months looking at the data to get an answer, and here it is: no.
After two and a half great years as director of CGD’s Rethinking US Development Policy initiative, I’m handing over the reins to my colleague Scott Morris. Many of you will know Scott as a CGD Senior Fellow with deep experience from the Treasury and on Capitol Hill. He’s a thought leader on many US development issues, especially the multilateral development banks and international debt. Rethink could not be in better hands as we start thinking about a new ad
Last night the House of Representatives passed the Electrify Africa Act. They followed the Senate, which passed the same bill by unanimous consent last December. Yes, amazingly enough, Congress has finally spoken: Combatting African energy poverty is the official policy of the land, or at least will be once President Obama holds a signing ceremony in the next 14 days.
The last time Congress overhauled the US foreign assistance apparatus, John F. Kennedy was president. The Foreign Assistance Act of 1961 (FAA) made some sweeping changes. There hasn’t been a wholesale reexamination of how US development programs are structured, administered, and coordinated. Exhibit A is the fact that over 20 US agencies currently deliver aid programs. As such, there is a compelling case for finally fixing a broken, fragmented, and underperforming system. Yet pushing for a new FAA is a really bad idea. Whoever takes the White House in 2017 should not fall into this trap.
Yesterday the UK government formally launched its much-awaited Energy Africa campaign, which aims to accelerate electricity access for rural Africans. In a surprise move, DfID’s new plans include only support for small-scale solar power solutions. Typically these systems provide just enough power for a LED light bulb or two and a cellphone charger (see here and here for a few DfID favorites).