Ideas to Action:

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FY2016 Enacted and FY2018 "Skinny Budget" Request

Funding areas are divided into those that are explicitly cut in the skinny budget, those that are not specified in the skinny budget and thus vulnerable to cuts, and those that appear to be less vulnerable based on the skinny budget.

Cat Bond Issuance Since 1996: Still Mainly for Rich Country Risks

“Cat” bonds are effectively a cheaper source of large-scale insurance coverage against clearly measured risks like earthquakes, storms, or even disease outbreaks. Generally, though, coverage hasn’t trickled down to the poorer and most at-risk countries—precisely those which are most vulnerable when aid fails to arrive or arrives piecemeal. Less than a twentieth of the total value of these products issued since 1996 covers risks in countries that the World Bank classifies as upper middle-income or below (places where income per capita is $12,475 or lower). They have mainly covered risks in the US and other high income countries (HICs).

Damages Mainly in Rich Countries vs. Deaths in Poor Ones - 1980-2010

Damages Mainly in Rich Countries vs. Deaths in Poor Ones, 1980-2010

From a financial perspective, disasters appear to have been kind to developing countries. That makes sense: highways in Tokyo, for example, cost more than roads in Sri Lanka. But the costs in terms of human lives are dramatically higher in developing countries. That makes humanitarian emergencies and natural disasters highly regressive—their toll falls disproportionately on the poorest and most vulnerable. 

The Humanitarian Financing Deficit is Growing Quickly

This chart compares agencies’ requests for funding through humanitarian-response plans. Underinvestment in resilience and increasing costs due to late response show up as a rising deficit, as calls on donors’ humanitarian budgets go unmet. Since response plans are filed after crises develop, funding is late almost by design. And it arrives in the straitjacket of annual disbursements, despite the multi-year nature of many crises 

Shares of Global Aid vs. Shares of Global Poor

There are big gaps between where aid gets spent and where the poor live. In the graph, countries to the right of the diagonal line receive a share of aid that is less than their share of people living in poverty. Asia is the standout case of this mismatch.

US Aid to the Middle East and North Africa

Since 1978, barely one-third of US assistance to the Middle East and North Africa has been allocated to economic support. Since 2009, despite a long period of economic decline in the region, economic assistance has not accounted for more than 10 percent of total combined military and economic aid.

MCC Compact Funding by Sector

MCC has funded country-identified priorities across a range of sectors, and it is clear that the agency’s flexibility to do so has enabled it to fill some important gaps.

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