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Efficient, resilient, and accountable governance systems are essential to successfully manage natural resources, provide public services, foster trade, attract private investment, and manage aid relationships. Corruption and secrecy are often at odds with such goals. Illicit financial flows, for example, undermine development and governance while secrecy in extractive industries can squander a nation’s wealth and weaken the social contract.
CGD’s work in this area focuses on contact transparency, tax evasion and avoidance, efforts to combat money laundering and terrorism financing, and the negative effects they can have on remittance flows and international security.
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Braving freezing temperatures and gusty winds, hundreds of development experts and members of the policy community packed a Washington hotel ballroom for a panel discussion on the outlook for global development policy in the new Obama administration, just four days before the inauguration of the new U.S. president.
On the panel were David Gergen, senior political analyst for CNN, editor-at-large at U.S. News and World Report, and advisor to four presidents; CGD president Nancy Birdsall; and CGD senior fellows Steve Radelet, Vijaya Ramachandran, and David Wheeler. CGD’s Lawrence MacDonald was panel moderator.
Gergen, a member of CGD’s board of directors, saw both opportunities and risks for greater attention to development under the new administration. On the one hand, new president Barack Obama has first-hand experience of poverty in developing countries, having lived as a child in Indonesia. On the other hand, Gergen said, Obama faces a crowded policy agenda and the immense fiscal demands of responding to a global financial crisis.
“We have an incoming president who will embrace development and accept some sacrifices to further the development agenda,” Gergen said. He added, however, that an anticipated flood of countercyclical spending to stimulate the economy would be followed by extremely tight budgets, possibly squeezing out development initiatives.
Birdsall responded that it is precisely in such a situation that sound policy ideas, such as those offered in CGD’s newest book, The White House and the World: A Global Development Agenda for the Next U.S. President, are most valuable
Discussion with David Gergen on Obama's Development Policy (video)
White House and the World (book)
White House and the World (briefs)
“I would ask the president to be a champion for development,” said Birdsall. “It’s not just about foreign aid. It’s about using all the tools that the United States has, including trade as a development policy, how to deal with climate change, how to maximize the development benefits of bringing the private sector to Africa, and how to think across the board about the relevance of development in making Americans more prosperous,” she said.
Panel members suggested ways that the United States could have a big positive impact on the economies of poor countries by making policy changes that also benefit Americans and cost relatively little in budgetary terms.
Ramachandran, author of a forthcoming book on ways to improve the business climate in Africa, outlined how the United States can help to foster private-sector investment to address the continent’s chronic infrastructure shortages, especially roads and power. For example, she said, U.S. companies are leaders in small-scale renewable power that could provide off-grid electricity to rural Africans.
Wheeler, an expert on development and environmental issues, said that his conversations with senior officials in China and India have convinced him that they are prepared to act to reduce their countries’ greenhouse gas emissions—provided that the United States first moves aggressively to reduce its own emissions, which on a per-capita basis are many times higher.
Radelet, who served as a senior official in the U.S. Treasury under both Democratic and Republican administrations, and is co-chair of the Modernizing Foreign Assistance Network or MFAN, urged the administration to create a National Strategy for Global Development. This would provide the basis, he said, for a grand bargain between the legislative and executive branches on modernizing U.S. foreign assistance, including new legislation to replace the burdensome and outdated Foreign Assistance Act of 1961.
Gergen said that these and other ideas in The White House and the World were “critically important for the future of the world and for redesigning American international policy.”
During a lively audience Q&A session, topics included trade, migration, corruption, and the U.S. response to humanitarian crises.
Summing up, Gergen said “Obama is incredibly strategic. This is a man who thinks long-term.”
Birdsall interjected: “That is why Obama can be a champion for development.”
“That’s exactly right,” Gergen responded.
In this paper, witha foreword by senior fellow Vijaya Ramachandran, Benjamin Eifert of UC-Berkeley investigates the effects of regulatory reform by drawing on years of data across 90 countries. He discusses the characteristics of countries that choose to reform and the results of these reforms. The paper it contains valuable insights for policymakers and institutions focused on regulatory reform in weak states.
The Extractive Industry Transparency Initiative (EITI) is a multisectoral initiative designed to help resource rich developing countries improve their governance. Although adherence is voluntary, participating governments are required to publish resource revenues and firms operating in these countries must publish what they pay governments to extract these resources. These same governments also must create multistakeholder monitoring groups to examine how governments use extractive industry revenues. Citizen participation is the foundation of the EITI, but not all participating governments allow citizens to fully participate in such activities. Susan Ariel Aaronson will present her paper, which examines government behavior under the EITI and seeks to answer why repressive as well as democratic states are cooperating with it. Many of the countries involved are making top down and grass roots governance improvements prior to and as they implement EITI and some of these countries, including relatively repressive states such as Azerbaijan, seem to be trying to signal to investors and lenders that they are intent on improving governance.
Why do some young democracies fail? Drawing on a unique data set of every democratization episode since 1960, The Fate of Young Democracies explores the underlying reasons for backsliding and reversal in the world’s fledgling democracies and offers proposals for ways that the international community can help these states stay on track toward political stability. Join us for an insightful discussion with co-author Ethan Kapstein about the underlying reasons for democratic failure and the implications for policy makers.