Weak institutions are both a cause and a consequence of underdevelopment. Improving governance is widely regarded as critical to accelerating economic opportunities, democracy, and security. This is especially important for fragile states and countries emerging from conflict. Despite this, the United States and other donor governments have few financial tools that are demonstrably effective at stimulating and delivering improved governance.
The same ideals that guided America’s earliest women of courage now lead our country into the world to combat the dehumanization of women in every form. We will not accept that women and girls are sold into modern-day slavery. We will not accept that women and girls are denied an education. We will not accept so-called honor killings, and we’ll do everything that we can to end forced early marriages. And we will work to improve health-care opportunities for all women so that they can help to build a more hopeful future for themselves and for their own children.
Climate change is a threat not only to prosperity in the United States but also to national security, foreign policy, and development objectives throughout the world. Hurricane Sandy served as a reminder of the destruction to life and property from extreme weather events, which are likely to become more frequent and severe. Likewise, extended drought in the Southwest illustrates how climate change could affect agriculture, energy, recreation, and other major sectors of the US economy. The implications of climate change for the development prospects of poor countries are even worse. Lacking infrastructure, financial assets, insurance mechanisms, or strong institutions to cushion the impacts, developing societies remain highly vulnerable to natural disasters, including those resulting from increasingly irregular climatic conditions. The poorest households are most vulnerable — their houses often perch on steep, landslide-prone hillsides around cities or in coastal floodplains, and smallholder farmers lack irrigation and depend on increasingly erratic seasonal rains.
As late as 1930, only 1 in 10 rural Americans had access to electricity. In subsequent years, rapidly increasing power generation and growing the electrical grid across the country became major pillars of the American battle against domestic poverty and a foundation for decades of economic growth and wealth creation. Today, energy access is universal in the United States. Reliable and affordable electricity is considered a basic necessity of life, an indispensable input to almost every aspect of modern living.
That same transformation is possible today in large parts of the developing world, where lack of access to modern energy harms quality of life and constrains economic growth. A concerted policy effort by the United States could help unleash tremendous human and market potential around the world. Pushing to promote electricity generation and access could significantly contribute to doing good in developing countries — and doing well for the United States.
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.
MCC’s model has received much recognition. However, since the agency controls just a small portion of the US foreign assistance budget, it alone has not fulfilled — and cannot be expected to fulfill — the founding vision of transforming US foreign assistance policy. Partly in response to the recommendations stemming from the 2010 Presidential Policy Directive (PPD) on Global Development, the larger agencies, especially the US Agency for International Development (USAID), have commendably worked to incorporate many of the same principles included in MCC’s model. For the most part, however, those principles are applied to a still-limited portion of the overall US foreign assistance portfolio. The next US president should continue to support MCC as a separate institution and support efforts to more thoroughly extend the good practices promoted in MCC’s model throughout US foreign assistance in general.
In the absence of effective international institutions, the United States has become the world’s de facto first responder for global health crises such as HIV/AIDS and new threats like Ebola. The US government has the technical know-how, financial and logistical resources, and unparalleled political support to act quickly and save lives. Initiatives such as the President’s Emergency Plan for AIDS Relief (PEPFAR) and the President’s Malaria Initiative are widely considered among the most effective aid programs in the world.
Yet US global health approaches are based on increasingly outdated engagement models, which fail to reflect emerging challenges, threats, and financial constraints. The next US president, working closely with Congress, should modernize how US global health programs are organized, deployed, and overseen. By taking three specific steps, the United States can reduce the need for costly first responses and generate more health and economic impact for every US taxpayer dollar spent.
While global development is about much more than aid, US foreign assistance is, and will remain, one of the most visible tools for US development policy in many countries. The US government spends less than 1 percent of its annual budget — about $23 billion — on nonmilitary foreign assistance across the globe. These programs have consistently come under fire for failing to achieve measurable and sustainable results, ignoring local priorities and contexts, perpetuating bureaucratic inefficiencies and inflexibility, and repeating mistakes over time. A paradigm shift within US aid agencies is needed. In this brief, we outline concrete proposals that would address many of the traditional shortcomings of US foreign aid approaches.
US leadership in multilateral institutions such as the World Bank and regional development banks is flagging. These institutions, rated as some of the most effective development actors globally, provide clear advantages to the United States in terms of geostrategic interests, cost-effectiveness, and results on the ground. Restoring US leadership in institutions like the World Bank will mean giving a greater priority to MDB funding, which today accounts for less than 10 percent of the total US foreign assistance budget and less than 0.1 percent of the total federal budget. Prioritizing multilateral assistance in an era of flat or declining foreign assistance budgets will necessarily mean some reallocation from other pots of foreign assistance money, as well as an effort to address the structural impediments to considering reallocations.
A Grand Bargain for Private Investment: Defining Commitments and Implementation under the Progress Pledge
To fully realize the potential of private investment for development impact and articulate commitments under the Progress Pledge, we propose a “grand bargain” between developing countries, donors, and private investors, with mutual commitments and reciprocal benefits.
This brief is a summary of the book Oil to Cash: Fighting the Resource Curse through Cash Transfers (Washington, DC: Center for Global Development, 2015).
Even as Congress was mandating large increases in the consumption of biofuels a decade ago, the world was changing. In the early 2000s, replacing fossil fuels with biofuels made from corn, sugar, or oilseeds seemed like a good idea. Increased crop demand would prop up prices for farmers, and replacing petroleum with renewable energy would reduce greenhouse gas (GHG) emissions and promote energy independence.
Gavi, the Vaccine Alliance, pools donor funds to increase immunization rates in developing countries. Vaccines have saved millions of lives. Results from new research at the Center for Global Development suggest Gavi could save more lives by shifting support away from lower-cost vaccines provided to middle-income countries toward more underused vaccines and support to the poorest countries.
Government procurement worldwide is worth around $9.5 trillion a year. Oil, gas, and mining rents (the gap between the price of the goods produced and the cost of production) amount to around $5 trillion, which is 4.8 percent of global GDP. Governments routinely sign multibillion-dollar contracts regarding the use of public property including those natural resources. The resulting contracts are public documents, for which default practice should be in favor of publication.
Why Forests? Why Now? A Preview of the Science, Economics, and Politics of Tropical Forests and Climate Change
Why Forests? Why Now? draws upon science, economics, and politics to show that tropical forests are essential for climate stability and sustainable development, that now is the time for action, and that payment-for-performance finance is a course of action with great potential for success.
The Brazil-Norway Agreement with Performance-Based Payments for Forest Conservation: Successes, Challenges, and Lessons
In May 2014, Nancy Birdsall, William Savedoff, and Frances Seymour visited Brazil as part of a three-country study to gain insights into the value of future expansion of performance-based payments in other countries. This brief is based on discussions with government officials, NGO staff, private entrepreneurs, and independent researchers in Brazil about the policies and programs that are associated with reduced deforestation and forest degradation in Brazil, with particular attention to the influence of the Brazil-Norway Agreement and the Amazon Fund.
The Quality of Official Development Assistance (QuODA) measures donors’ performance on 31 indicators of aid quality to which donors have made commitments. The indicators are grouped into four dimensions associated with effective aid: maximizing efficiency, fostering institutions, reducing the burden on partner countries, and transparency and learning. The 2014 edition finds that donors are overall becoming more transparent and better at fostering partner country institutions but that there has been little progress at maximizing efficiency or reducing the burden on partner countries.