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41. East Asian Cities: Past Development and Onrushing Challenges

Author:
Shahid Yusuf
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The East Asian export-led development model has served as a beacon for decades. For the many urbanized and rapidly urbanizing countries, the East Asian experience with and response to emerging challenges can be equally instructive. High-income East Asian economies are at or approaching peak urbanization. China is likely to catch up within the next three decades. Since the 1950s, urbanization was accelerated by industrialization, which provided a plenitude of jobs directly and indirectly. It generated the resources that helped build urban infrastructure and housing, financed essential services, and created modern, urban livability. However, East Asian cities, like cities in other high- and middle-income countries, face new challenges. Services are displacing manufacturing as growth drivers and providers of jobs; the absorption of digital technologies, urban greening, and control of pollution/carbon emissions is more urgent; climate change is necessitating the upgrading of services and infrastructure to enhance resilience; climate change will also compel a managed withdrawal from some urban locations; and both services and physical facilities must adapt to meet the needs of aging populations. Responding to these challenges calls for strategic long-range planning, technological advances, implementation capacity, and resource mobilization. By 2050, 70 percent of the global population will live in cities. Therefore, how East Asians tackle these challenges can inform and guide policymakers in developed and developing countries alike.
Topic:
Development, Infrastructure, Urbanization, and Urban
Political Geography:
East Asia and Asia

42. Social Protection in the COVID-19 Pandemic: Lessons from South Africa

Author:
Lena Gronbach, Jeremy Seekings, and Vayda Megannon
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
South Africa responded to the stresses of the COVID-19 pandemic and lockdown using a combination of existing social protection programmes, unemployment insurance, and additional measures to support those most affected. This paper reviews policies and implementation with the objective of highlighting lessons for the global community, including on the use of digital mechanisms. The government adopted a two-pronged and largely cash-based approach: unemployment benefits for formal sector workers and cash transfers to vulnerable individuals, informal workers, and beneficiaries of existing grants. Top-up payments for existing grants were rolled out efficiently; the new Special Relief of Distress (SRD) grant posed challenges but ultimately succeeded in reaching over six million previously uncovered beneficiaries. It may even become a permanent feature of South Africa’s social protection system. Overall, the government reached over 30 million South Africans with cash-based relief measures. A distinctive feature of cash-based emergency relief was the use of digital technologies, especially in the application and verification process for the new SRD grant. The payment system, however, relied heavily on manual cash disbursements, thus failing to reflect the adoption of innovative digital technologies observed in many other African countries.
Topic:
Security, Pandemic, COVID-19, and Protection
Political Geography:
Africa and South Africa

43. Domestic Revenue Mobilization and Debt Relief: The Lack of Any Link

Author:
Mark Plant and Nancy Lee
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
As the global financial community considers how to extend debt relief accompanied by IMF adjustment programs to vulnerable low-income countries, the issue of policy conditions for fiscal adjustment will inevitably arise. This paper considers the effectiveness of conditions related to domestic revenue mobilization (DRM) in the last systematic round of debt relief in the early 2000s Highly Indebted Poor Countries Initiative and the Multilateral Debt Relief Initiative (HIPC/MDRI). We find that debt relief had no impact on low-income countries’ DRM. Countries benefitting from debt relief had roughly the same DRM as those that did not. And DRM grew only slightly over time for both sets of countries. In the months to come there will be pressure to use debt restructuring and leverage to accelerate fiscal reforms and boost domestic revenue mobilization so that LICs can be seen to be contributing “their fair share” to economic recovery and transformation. Experience with the HIPC/MDRI tells us that we must be realistic in our expectations: external forces have limited impact unless combined with strong internal will and implementation capacity.
Topic:
Debt, Economics, IMF, and Credit
Political Geography:
Global Focus

44. Stuck Near Ten Billion: Public-Private Infrastructure Finance in Sub-Saharan Africa

Author:
Nancy Lee and Mauricio Cardenas Gonzalez
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Many stress the critical role of the private sector in filling yawning sub-Saharan Africa (SSA) infrastructure finance gaps, only widened by the pandemic. Our paper looks in detail at financially closed (construction-ready) transactions with private participation in SSA from 2007-2020. Despite the “billions to trillions” vision, we find no sustained upward trends for such transactions in volumes of total finance, multilateral development bank (MDB) finance, private finance, the share or volume of local private finance, participation by international institutional investors, or finance from bilateral development finance institutions (DFIs). External finance sources were larger than local sources, with Chinese DFIs dominant and the US DFI a marginal actor. Among MDBs, the African Development Bank provided the most finance cumulatively. Investment in renewable energy outpaced investment in fossil fuel infrastructure, but MDBs continued to make significant fossil fuel investments. Investment in water and social infrastructure remains about 5 percent of the total. Policy implications include: the urgent need for greater MDB efforts to use their broad toolkits to catalyze more private infrastructure finance, including from local sources and in social sectors; the case for building on the African Development Bank’s advantages; the importance of growing the US Development Finance Corporation’s efforts; and the strong logic for more collaboration among infrastructure finance providers to SSA, including China, with MDBs providing not only finance but also fora for collaboration and support for the policy and institutional reforms that build sustainability and reduce risk for all actors.
Topic:
Infrastructure, Finance, Private Sector, and Public-Private Partnership
Political Geography:
Africa

45. Greening the US Sovereign Bond Guarantee Program: A Proposal to Boost Climate-Directed Sovereign Finance in Developing Countries

Author:
Scott Morris, Rowan Rockafellow, and Alan Cameron
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Sovereign bond guarantees (SBGs) are an effective but underutilized instrument available to the US government in support of developing country partners. By protecting bond purchasers in the event of a foreign issuer country’s default, SBGs substantially reduce borrowing costs for developing country governments. In this CGD policy paper, we estimate the costs and benefits of historical US sovereign bond guarantees in order to model the use of SBGs for climate finance purposes. We demonstrate that the US government-provided SBG has the effect of conferring the US government’s cost of borrowing on the partner government. On that basis, it represents substantial savings for these countries. Based on this analysis, we propose a $20 billion “Green” SBG program aimed at financing climate change mitigation efforts in 28 emerging market economies. We estimate that the US government could support $20 billion in bond issuances through a subsidy outlay of $2 billion, resulting in a 22 percent reduction in borrowing cost of the target countries, which represents $4 billion in budgetary saving for their governments. We propose that the subsidy appropriations in support of the guarantees be retained and recycled within the Green SBG program, which would substantially improve the financial leverage of the program over time. We also suggest that the program could be used for climate adaptation purposes by targeting a different group of developing countries
Topic:
Climate Change, Development, Finance, Sustainability, and Green Transition
Political Geography:
North America and United States of America

46. Country Platforms and Delivery of Global Public Goods

Author:
Daouda Sembene, Nancy Lee, and Mark Plant
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
This paper discusses three potential requirements for country platforms to facilitate effective delivery of GPGs. We propose that existing country platforms be repurposed to coordinate the contribution of domestic and external stakeholders to GPG delivery efforts at the country level. For this proposed approach to be successful, an explicit link must be introduced between country-level efforts and global initiatives to provide GPGs. There is also merit in setting up country and global coordination mechanisms, with relevant agencies assigned to operate them both at the national and international levels. Using relevant country platforms, we suggest that international financial institutions (IFIs) such as the IMF and multilateral development banks (MDBs) be mandated with helping developing countries meet the financing needs associated with the provision of GPGs. In addition, technical support from the IFIs should be put on the table to improve the effectiveness of developing countries’ contribution to GPG delivery. In this regard, MDBs can and must play a central role in developing capacities in these countries as part of their own contribution to GPG delivery. At the same time, securing the contribution of civil society and the private sector to GPG delivery efforts is essential given the magnitude of potential financing needs.
Topic:
International Cooperation, Finance, Multilateralism, IMF, and Public Goods
Political Geography:
Global Focus

47. IDB COVID-19 Response Projects and Gender Integration

Author:
Shelby Bourgault, Kelsey Ross, and Megan O'Donnell
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
This paper aims to determine the extent to which gender was considered in the Inter-American Development Bank’s (IDB) operations aimed at responding to the COVID pandemic and associated economic crisis. Using keywords to identify COVID response projects, we found 264 projects approved between March 1, 2020, and July 31, 2021 for our analysis. We found that 135 projects (51 percent) had publicly available project documents for analysis, and of these, 32 projects (24 percent) included gender-focused indicators in their results frameworks. Most gender indicators focus on women as participants of social protection programs or as owners of small- and medium-sized enterprises. Our recommendations to the IDB include increasing transparency by publishing more project documents and ensuring gender indicators are included in projects’ results frameworks across sectors. This project builds on previous analysis of gender integration in COVID response projects at the World Bank, Asian Development Bank, and African Development Bank.
Topic:
Pandemic, COVID-19, Social Groups, and Gender
Political Geography:
Global Focus

48. Prioritizing Public Spending on Health in Lower-Income Countries: The Role of the Global Financing Facility for Women, Children and Adolescents

Author:
Janeen Madan Keller, Rachel Silverman, Julia Kaufman, and Amanda Glassman
Publication Date:
12-2022
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The Global Financing Facility (GFF), launched in 2015, is a partnership backed by a multi-donor World Bank trust fund that aims to “prioritize and scale-up evidence-driven investments to improve reproductive, maternal, newborn, child, and adolescent health and nutrition (RMNCAH-N) interventions” in low- and lower middle-income countries. A major component of the GFF’s operational model is centered around the investment case, described by the GFF as “a description of the changes that a country wants to see with regard to reproductive, maternal, newborn, child, and adolescent health (RMNCAH) and a prioritized set of investments required to achieve these results.” Looking retrospectively at investment cases and associated ongoing World Bank operations, this paper aims to shed light on specific aspects of the GFF’s operating model, approach, theory of change, and results to date related to the “development of a costed and prioritized investment case,” and whether the investment case helps to prioritize public spending on health in the real world. The portfolio-wide findings suggest that the GFF delivers a clear value-add within the global health architecture by directing more funding to flow directly through governments via increased World Bank lending for RMNCAH-N (especially in the context of COVID-19-related service disruptions and fiscal contractions). The role of the investment case in aligning and prioritizing resources behind a consensus set of highest-value RMNCAH-N interventions within a specific funding envelope is less well documented in the public domain; GFF efforts to directly influence government RMNCAH-N spending decisions and their efficiency seem to occur primarily through follow-on resource mapping and expenditure tracking. The paper concludes with three recommendations for the GFF and its donors: (1) pursue a deliberate strategy for prioritization of RMNCAH-N services and products within the realistic budget constraint to advance evidence-based decisions on certain trade-offs; (2) increase transparency and public visibility into GFF-supported activities and funding, especially related to RMNCAH-N product procurement and overall resource tracking; and (3) explore incentives for increased donor co-financing within the framework of World Bank projects as a strategy to pool and channel more resources through government coffers.
Topic:
Health, Children, Women, Public Spending, and Gender
Political Geography:
Global Focus

49. Two Birds, One Budget: Using ODA for Influence and Development in the Indo-Pacific?

Author:
Rachael Calleja, Sam Hughes, and Beata Cichocka
Publication Date:
12-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
This paper explores the UK’s proposed “Indo-Pacific tilt” from a development perspective. In light of recent cuts to the UK’s official development assistance (ODA), we ask how the UK can use scarce development resources in the Indo-Pacific more effectively to capitalise on opportunities to support strategic objectives while ensuring that ODA remains squarely focused on development priorities. Our analysis seeks to understand both how the UK is positioned within the Indo-Pacific, which is an already-crowded development landscape, as well as where the UK’s strategic and developmental priorities in the region might meaningfully overlap. We find that while there are some opportunities for the UK to support both development objectives and strategic interests concurrently in the Indo-Pacific—such as in the provision of regional and global public goods—the countries with the greatest strategic value to the UK are not those where additional ODA could contribute most clearly to poverty reduction. We conclude the paper with six policy recommendations. Among others, we propose that the UK should consider partnering with other like-minded providers to maximise its presence in the region.
Topic:
Development, International Cooperation, Infrastructure, and Influence
Political Geography:
United Kingdom, Europe, and Indo-Pacific

50. Strengthening Regional Policy Frameworks to Better Respond to Environmental Migration: Recommendations for the UK Government

Author:
Amelia Dal Pra, Mariam Traore Chazalnoel, and Helen Dempster
Publication Date:
12-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The Bay of Bengal, the Sahel, and Small Island Developing States (SIDS) are especially vulnerable to the impacts of slow-onset climate events resulting from climate change. Global temperature warming is leading to a dramatic rise in sea levels, which will lead to coastal erosion and land loss across SIDS and the Bay of Bengal. Such warming will also contribute to increasing desertification and water scarcity issues in the Sahel. This environmental damage is irreversible and may seriously threaten economies as well as the daily lives of communities. Without strong policy interventions to bolster in-situ resiliency and increase climate change adaptation and mitigation, including migration, the regions most vulnerable to climate impacts might experience major human security and security crises. This paper provides an analysis of some of relevant regional frameworks that could be useful in addressing environmental migration across these three regions. It concludes that high-income countries such as the UK should do two things: provide financial and technical support to bolster climate adaptation in regions uniquely vulnerable to slow-onset climate events; and support the establishment and / or implementation of regional migration frameworks and free movement agreements (FMAs) that can potentially offer safe, orderly, and regular migration pathways to those affected by the impacts of slow-onset climate events.
Topic:
Climate Change, Environment, Regional Cooperation, and Regionalism
Political Geography:
Global Focus

51. Facilitating Environmental Migration through Humanitarian and Labour Pathways: Recommendations for the UK Government

Author:
Helen Dempster, Amelia Dal Pra, and Mariam Traore Chazalnoel
Publication Date:
12-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The impact of climate change, environmental degradation, and disasters on migration and human mobility is receiving more and more attention, by policymakers, academics, and the press alike. While there are gaps in the evidence base, much suggests that the vast majority of people will seek to move internally and regionally, rather than internationally. That being said, there are good reasons as to why high-income countries may want to facilitate so-called international “environmental migration” by adapting their existing legal and policy frameworks. This paper outlines how countries such as the United States of America (US), Canada, New Zealand, Australia, Japan, and various European countries have explored, created, or adapted their legal and policy frameworks to explicitly respond to international environmental migration, and the lessons learned therein. It concludes with a series of policy recommendations for the government of the United Kingdom of Great Britain and Northern Ireland (UK) as to how the UK could adapt their own legal and policy frameworks to better respond to international environmental migration.
Topic:
Environment, Migration, Governance, and Partisanship
Political Geography:
United Kingdom and Europe

52. Addressing the “Root Causes” of Irregular Migration from Central America: An Evidence Agenda for USAID

Author:
Sarah Rose, Reva Resstack, Helen Dempster, Elisa Cascardi, and Jeremy Weinstein
Publication Date:
12-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
In recent decades, the number of people migrating irregularly from the three Northern Triangle countries of Central America—El Salvador, Guatemala, and Honduras—has been increasing, putting pressure on the Biden-Harris administration to address the root causes of irregular migration and deliver “results.” Evidence suggests that these countries are undergoing a demographic and economic transition, hence emigration pressure will likely remain for the coming decades. Yet there is much an entity like USAID, the United States’ largest development agency, can do to moderate the short-run drivers of irregular migration such as violence, climate shocks, lack of economic opportunity, and inaccessibility of legal migration pathways. In this policy paper, we outline the available evidence within these areas that is directly pertinent to irregular migration and identify key evidence gaps to be filled by future research and evaluation. We conclude by outlining five recommendations for how USAID can ensure its work is evidence-based and contributes to new learning, supporting policymakers in this field for decades to come.
Topic:
Development, Immigrants, USAID, Influence, and Migrants
Political Geography:
Central America, North America, Honduras, Guatemala, El Salvador, and United States of America

53. How Can Multilateral Organizations Strengthen Global Data Governance Practices? Roundtable Summary

Author:
Michael Pisa and Ugonma Nwankwo
Publication Date:
12-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
This brief is based on a roundtable hosted by CGD as part of the Governing Data for Development project, which explores how governments can use data to support innovation, development, and inclusive growth while protecting citizens and communities against harm. The views expressed here are those of the participants and do not necessarily represent the views of CGD staff. For other briefs in the series, as well as more on the project, visit cgdev.org/governing-data. Cross-border data flows are governed through a patchwork of complex, overlapping arrangements and trade agreements. The absence of a more systematic approach to data governance at the global level may make it harder for low- and middle-income countries to participate in the global digital economy and develop their own frameworks for governing the use of data in a responsible manner. It also leaves them with limited leverage in negotiations with both Big Tech companies and wealthier jurisdictions. This meeting is the third in a series of private roundtables convened by the Center for Global Development aimed at exploring the relationship between data governance and economic development. The first event examined whether current approaches to data protection and privacy are a good fit for resource-constrained countries. The second explored whether evolving digital trade rules support or hinder economic development. This third roundtable explored the role and limitations of multilaterals in promoting better data governance. This document summarizes key takeaways from the meeting, including the remarks of four keynote speakers and themes raised in a discussion among 30 experts, who are listed in the appendix. The roundtable was moderated by Pam Dixon, founder and executive director of the World Privacy Forum, and co-chair of the working group for CGD’s Governing Data for Development project.
Topic:
International Cooperation, Governance, Digital Economy, and Multilateralism
Political Geography:
Global Focus

54. Who’s Responsible for Climate Change? New Evidence Based on Country-Level Estimates of Climate Debt

Author:
Benedict Clements, Sanjeev Gupta, and Jianhong Liu
Publication Date:
11-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
In this paper, we introduce the concept of climate debt and provide country-level estimates through 2035 under a business-as-usual scenario. These estimates can help inform the debate on climate change by providing a clear view of which countries have (until the present) contributed the most to climate change, as well as the likely path for climate debt by country over the next 15 years. We then discuss the implications for carbon emissions if the G-20 countries and EU were to adopt either of the two policy options proposed in recent months: the first by President Biden for the US and the other by the EU for its member countries. The implications for fiscal policy are that beyond the need to keep public debt at sustainable levels, countries will also need to allocate funds for expected increases in pension and health spending associated with aging populations. As a result, there may be little room for new expenditures (such as green infrastructure or subsidies for clean energy) to reduce the growth of climate debt. Countries could turn to the revenue side, in particular greater taxation of energy with carbon taxes. This would have the advantage of reducing emissions while also helping countries to fund spending on green infrastructure.
Topic:
Climate Change, Energy Policy, Environment, Humanitarian Response, and Green Transition
Political Geography:
Global Focus

55. Mapping China’s Participation in Multilateral Development Institutions and Funds

Author:
Scott Morris, Rowan Rockafellow, and Sarah Rose
Publication Date:
11-2021
Content Type:
Policy Brief
Institution:
Center for Global Development
Abstract:
China has emerged as a leading participant in multilateral development organizations. In many ways, this is a welcome development. Today’s global challenges, including COVID-19 and climate change, require an international response and have prompted renewed calls for increased multilateral engagement by the major economy countries. This, combined with the recognition of multilateral institutions’ high standards for transparency and environmental safeguards, have led the United States at times to encourage China to step up its multilateral contributions. At the same time, countervailing voices focused on strategic competition increasingly view China’s multilateral participation with skepticism. When the People’s Republic of China joined the World Bank in 1980, it was allocated 12,000 International Bank for Reconstruction and Development (IBRD) shares, becoming the Bank’s sixth largest shareholder with 3.47 percent of the of the voting power. By 2013, decades of rapid economic growth had propelled China to its current position as the IBRD’s third largest shareholder, eclipsing France, Germany, and the United Kingdom with 5.03 percent of IBRD voting power. In many ways, China’s rise in stature at the IBRD mirrors its growth in influence across the multilateral development system. This is certainly true of China’s increasing voting share in the World Bank, IMF, and UN system, all of which tie financial contributions to economic size (see Figure 1). But China’s growing importance in the multilateral system is also the product of distinct policy choices made by the Chinese government. These policy choices go beyond the wealth-based financial contributions that dictate IBRD shareholding to include voluntary financing, borrowing, and commercial contracting. In concert, they make China a unique player in the multilateral system by virtue of to its simultaneous roles as a multilateral organization donor, shareholder, aid recipient, and commercial partner.
Topic:
Development, International Cooperation, Multilateralism, and Participation
Political Geography:
China and Asia

56. Mapping China’s Multilateralism: A Data Survey of China’s Participation in Multilateral Development Institutions and Funds

Author:
Scott Morris, Rowan Rockafellow, and Sarah Rose
Publication Date:
11-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
A considerable body of recent research attempts to shed light on China’s bilateral aid and finance flows, but there have been fewer efforts focused on China’s participation in multilateral development channels. As a result, China’s role across the landscape of multilateral institutions and funds is poorly understood, even as China has emerged as a leading donor within many of these entities. Part of China’s increased multilateral engagement reflects its economic growth, with shareholding and assessed contributions based largely on economic size. But the government of China’s policy choices are also revealed, in part, through its patterns of voluntary funding, cooperation agreements, and influence through personnel instated in leadership positions. By collating data on China’s financial and non-financial engagement with multilateral development banks and other financial institutions, sector-based vertical funds, and the development entities of the United Nations, among others, this paper seeks to provide a clear picture of China’s role in the multilateral development system and the evolution of that role over the past decade. This assessment brings to light the weight of China’s voting power across the multilateral development banks, the extent to which Chinese firms benefit from procurement opportunities in multilateral institutions, and the degree to which China has achieved a singular position of being a large-scale donor and recipient in the multilateral system.
Topic:
Development, International Cooperation, Hegemony, and Multilateralism
Political Geography:
China and Asia

57. Meeting the Global Health Challenge to Reduce Death and Disability from Alcohol, Tobacco, and Sugar-Sweetened Beverage Consumption with Corrective Taxes

Author:
Chris Lane and Vinayak Bhardwaj
Publication Date:
11-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Behind the daily trauma of COVID-19 lies a larger and longer-lasting global health challenge resulting from the consumption of tobacco, alcohol, and sugar-sweetened beverages. Using a sample of 25 large advanced and emerging market economies accounting for three-quarters of global GDP, we show that about 60 million productive life years were lost every year in 2000, 2010, and 2019 from death and disability attributable to alcohol, tobacco, and diets high in sugar-sweetened beverages. Using the cost-of-illness framework, the economic value of these lost productive years in 2019 is approximately $2.1 trillion in our country sample (in 2017 purchasing power parity dollars [PPP$]). We show that over a 20-year period, a higher tax effort is associated with larger reductions in economic costs. We also show that total corrective taxes for all the products under investigation fall far short of the indirect costs of consumption in all countries. We conclude that all advanced economies and emerging markets could reap substantial macroeconomic benefits from better health by raising corrective taxes on alcohol and tobacco and by introducing corrective taxes on sugar-sweetened beverages.
Topic:
Health, Disability, Tax Systems, Health Crisis, and Addiction
Political Geography:
Global Focus

58. Navigating the Straits: Pull Financing for Climate and Development Outcomes

Author:
Ranil Dissanayake
Publication Date:
11-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
An increasing share of official development assistance is being used for climate-related activities. This trend is continuing despite the lack of comprehensive cost-effectiveness evidence to guide spending decisions and continuing concerns that few applications are effective or efficient mechanisms for either climate or development outcomes. This represents both a waste of scarce resources and a missed opportunity. This paper proposes that a well-designed pull financing mechanism, which identifies specific problems for which it will pay a pre-specified price for solutions that can scale up, has the potential to navigate these problems. When they work, a pull instrument can solve problems at scale at low cost by incentivizing private innovators to produce a socially beneficial product that people want to buy and use. However, the design challenges associated with them are not trivial: firstly, the identification and selection of technologies or problems for which the pull financing facility would be a sufficiently large portion of the market to shift incentives for innovators or producers (for technologies that exist but have not been taken up widely yet); and secondly, the ability to design contracts that incentivize socially beneficial innovation that are bought and used. This paper sets out the case for pull financing for climate and development activities, the challenges that need to be addressed to do it well, criteria for judging potential applications of pull financing and an initial indication of some sectors to which pull financing may be applied.
Topic:
Climate Change, Development, Environment, and Finance
Political Geography:
Global Focus

59. Translating Results-Based Financing from Theory to Operational Reality: Lessons from the Practical Application of RBF at the European Commission

Author:
Rachel Silverman
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
esults-based financing (RBF) is one of several broad approaches to finance official development assistance (ODA) “that attempt[s] to connect at least a portion of payment to the verified achievement of results.” Despite some relatively high-profile programs and pilots—and broad interest and curiosity—RBF approaches have yet to penetrate the routine operations of large institutional grant- and contract-based funders, many of which are governed by complex bureaucracies, restrictive financial regulations, and deeply entrenched, risk-averse corporate cultures. The European Commission (EC) is one large and influential donor that has shown a long-standing interest in RBF approaches but is still in initial phases of implementation. Informed by a research partnership between the Center for Global Development (CGD) and EC Commission Directorate-General for International Partnerships (INTPA), this Policy Paper reflects on the experience and lessons learned in attempting to operationalize RBF at scale within a large funder of ODA, with important implications for the broader international development community. Starting at the macro level, it considers the institutional prerequisites for adoption of RBF within a donor agency—in this case, the European Commission/INTPA. It then zooms into the project-level design and negotiation process, including the choice of implementing partner (in this case a United Nations agency) and political and technical stumbling blocks. It concludes with a discussion of remaining challenges for broader use.
Topic:
Development, International Cooperation, Regional Cooperation, and Finance
Political Geography:
Europe

60. How Do Humanitarian Donors Make Decisions, and What Is the Scope for Change?

Author:
Rose Worden and Patrick Saez
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
n this policy paper we review donor responses to a survey and interviews to probe the effects of the broader political and economic context in which donors operate, and identify internal constraints on humanitarian funding, planning, and making allocative decisions. We identify and highlight perceived and real constraints with which donors contend when making decisions on how to allocate limited resources. The way humanitarian donors fund is key to system-wide efficiency, effectiveness, and reforms in the humanitarian system. Donors face competing priorities when engaging in humanitarian response. They care about retaining control, must rely on limited information sources to inform decisions, and balance their approaches with other foreign policy objectives. Institutional legacies, trust, and visibility for their efforts also matter to donors. These factors have shaped how donors have approach their current commitments to Grand Bargain reforms as donors prepare to engage with the newest iteration of reform—the Grand Bargain 2.0.
Topic:
Humanitarian Aid, Reform, Institutions, and Donors
Political Geography:
Global Focus