Attention presidential transition teams: the Rethinking US Development Policy team at the Center for Global Development strongly urges you to include these three big ideas in your first year budget submission to Congress and pursue these three smart reforms during your first year.
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 Related US efforts have not been deployed in an efficient or strategic manner because authorities are outdated, staff resources are insufficient, and tools are dispersed across multiple agencies.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.
Since its establishment more than 50 years ago, the US Agency for International Development (USAID) has become a $17-billion-a-year agency stretched across the globe, operating in 125 countries and 36 different program areas. It covers nearly every development challenge, including those surrounding health, food security, microfinance, governance, counterterrorism, macroeconomic stability, trade, and transnational crime.
But USAID, the largest bilateral provider of development assistance in the world in absolute terms, could better maximize its development impact. It has been three decades since a US president instructed the agency to conduct a comprehensive top-to-bottom review of its programs. This is despite dramatic changes in basic development challenges around the world and in the broad economic and political landscape within which the agency operates.
In this project, we analyzed whether mobile phone-based surveys are a feasible and cost-effective approach for gathering statistically representative information in four low-income countries (Afghanistan, Ethiopia, Mozambique, and Zimbabwe).
Bringing US Development Finance into the 21st Century: Proposal for a Self-Sustaining, Full-Service USDFC
The imperative for US development finance has increased significantly due to a number of factors over the last decade. There is growing demand for private investment and finance from businesses, citizens, and governments in developing countries. Given the scale of challenges and opportunities, especially in promoting infrastructure investments and expanding productive sectors, there is an increasingly recognized need to promote private sector-based solutions.
Advancing the US–Africa Trade and Development Agenda: Aligning US Policy Tools to Address Core Competitiveness Constraints
On July 29, 2014, senior fellow and director of CGD’s Rethinking US Development Policy Initiative Ben Leo testified before the House Ways and Means Subcommittee on Trade at a hearing about the future of the African Growth and Opportunity Act (AGOA) .
Getting Serious about Underperformance of the African Growth and Opportunity Act: Policy Options for Supporting Trade Potential in Africa
With the African Growth and Opportunity Act (AGOA) scheduled to expire in September 2015, the US Congress and Obama Administration will need to consider its status this year.
Maximizing Access to Energy: Estimates of Access and Generation for the Overseas Private Investment Corporation’s Portfolio
We conservatively estimate that more than 60 million additional people in poor nations could gain access to electricity if the Overseas Private Investment Corporation were allowed to invest in natural gas projects, not just renewables.
The United States government has made repeated declarations over the last decade to align its assistance programs behind developing countries’ priorities. By utilizing public attitude surveys for 42 African and Latin American countries, this paper examines how well the US has implemented this guiding principle. Building upon the Quality of Official Development Assistance Assessment (QuODA) approach, I identify what people cite most frequently as the ‘most pressing problems’ facing their nations and then measure the percentage of US assistance commitments that are directed towards addressing them.
A strengthened OPIC—more efficiently deploying existing tools at no additional budget cost—would (1) increase US commercial access in emerging economies, (2) reflect economic, social, and political priorities in developing countries, (3) promote flagship US initiatives during austere budget conditions, and (4) support stability in fragile or frontline states.
MDG Progress Index 2011: The Good (Country Progress), the Bad (Slippage), and the Ugly (Fickle Data)
Ben Leo and Ross Thuotte check on the progress countries are making toward the Millennium Development Goals.
Can Donors Be Flexible within Restrictive Budget Systems? Options for Innovative Financing Mechanisms - Working Paper 226
This paper focuses on how budgetary scorekeeping systems affect governments’ ability or willingness to support innovative development finance initiatives and explores several options to overcome the restrictions the systems often impose.
In this working paper, the authors introduce an MDG Progress Index to assess how on or off track countries are toward MDG targets.
Against the backdrop of the fast approaching Millennium Development Goals deadline, World Bank shareholders have an opportunity to dramatically increase resources available for the poorest, most vulnerable countries. By better leveraging the IBRD’s balance sheet for creditworthy blend and hardened term countries, IDA could have provided up to an additional $7.5 billion for IDA-only countries during the IDA-15 period.
Leveraging World Bank Resources for the Poorest: IDA Blended Financing Facility Proposal - Working Paper 214
CGD research fellow Ben Leo estimates that the World Bank could provide an extra $7.5 billion to the poorest countries over the next three years by adjusting the balance sheets of IDA and IBRD, its main lending arms.
Benjamin Leo, formerly of the U.S. Treasury and National Security Council and a key behind-the-scenes player in the inception and implementation of Multilateral Debt Relief Initiatives, examines the potential risk of renewed debt re-accumulation by countries that have only recently completed the HIPC/MDRI process that was to prevent a repeat of excessive debt accumulation.