Ideas to Action:

Independent research for global prosperity

Domestic Resource Mobilization

To achieve the Sustainable Development Goals, finance for development must increase from “billions to trillions” per year. While prospects for public and private financing from the developed to the developing world are increasing, the key to sustainable human and infrastructure investment over the long term will be increased domestic resource mobilization (DRM)—the process through which low-income and lower middle-income countries raise and spend their own funds to provide for their people. The 2015 Addis Agenda and the ensuing Addis Tax Initiative enshrine global DRM aspirations and have prompted an acceleration in DRM-related technical assistance to LIC/LMICs.

In contrast to many efforts focused on the techniques of DRM, CGD’s project seeks to enhance understanding of the political and economic constraints to increasing DRM and the distributional consequences of DRM policies. To support this learning process, CGD will:

• Establish a common understanding of what constitutes “good” DRM;

• Understand what the structural and political constraints are to increasing DRM;

• Explore what multidimensional measures are best suited to track the efficiency and distributional impact of DRM;

• Assess the effectiveness of policy advice, financial support and technical assistance for DRM from multilateral and bilateral institutions, particularly from the LIC/LMIC policymakers’ perspective;

• Understand the impact that international finance and tax regimes have on LIC/LMICs and propose reforms that will assist LIC/LMIC development;

• Develop an agenda of new ideas and actions to enhance DRM support and effectiveness.

We will engage LIC/LMIC policymakers in their efforts to drive more effective and equitable DRM outcomes through a semi-annual roundtable of finance ministers, which will discuss fiscal policy challenges and solutions in a peer-to-peer learning environment. We will also convene a semi-annual roundtable of key players at multilateral and bilateral institutions that are active in providing technical assistance and financial support to discuss ongoing work and formulate specific strategies for enhancing DRM support and implementation.

Next year, CGD will host an international conference on DRM, convening DRM experts, policymakers, technical assistance providers and other critical actors to discuss current issues in the DRM field. These discussions will establish a constructive interchange among all players in the DRM space regarding DRM design strategies and support mechanisms.

Parent Topic