Development finance trends

GHA has published a series of policy briefs which aims at analysing political trends in development finance and informing the decision making process at the French, EU and global levels:

The adoption of Agenda 2030 launched a new era for development in terms of scale and ambition. For the first time, the international community agreed on universal goals and recognised that the fight against all forms of poverty and inequalities was at a crossroads between social, environmental and economic needs. The adoption of an agenda that aims to “leave no one behind” initiated a narrative shift with equity at the heart of the policy response. 

As part of the roadmap to reach the Sustainable Development Goals (SDGs), the Addis Ababa Action Agenda launched a new development finance agenda. The international community agreed that the financial gap of US $2.5tn per year to achieve the SDGs by 2030 in developing countries will only be filled with the contribution of all sources of financing: external and domestic, public and private. As a result, Official Development Assistance (ODA) is increasingly framed as a catalyst to leverage other sources of investments, including from the private sector, in order to jump from “billions” to “trillions” and fill the funding and development gaps.

In parallel, development policy underwent a major shift. It moved from being a policy field in its own right, with a specific implementation logic (aid effectiveness principles) and historic mandate (poverty reduction) to being integrated into other policy fields such as migration management, security and defence and economic investments. While in theory this integration could have been valuable, for instance to enhance policy coherence or give greater prominence to development, development objectives have instead increasingly been subordinated to the above-mentioned policy fields. This shift considerably changed development policies’ objectives and budgets, as well as global norms. 

In order to contribute to the on-going policy dialogue on global development, GHA analysed new instruments developed by bilateral, regional and multilateral donors and their compliance with internationally recognised principles of aid effectiveness. Instruments under scrutiny are: the Alliance Sahel, the EU Emergency Trust Fund for Africa (EUTF), the EU External Investment Plan (EIP), the Global Financing Facility for Women, Children and Adolescents (GFF) and the Pandemic Emergency Financing Facility (PEF). We developed and applied an analytical framework focusing on governance set-ups, agenda-setting processes, stakeholder engagement, types of funding mechanisms, implementation channels, transparency and accountability (see Annex 3). Our analysis looked at decision-making and power dynamics both at the global and national levels to understand the design and implementation of these instruments. 

We used a mix of literature review, official data and interviews with stakeholders based in Brussels, Paris and Washington, as well as fact-finding missions in Burkina Faso (November 2018), Sierra Leone (January 2019) and Uganda (March 2019). We met with representatives of governments, donors, development agencies, parliamentarians, UN agencies, as well as local and international civil society. A list of people interviewed can be found in Annex 1. We would like to thank all stakeholders who agreed to meet with us in Brussels, Paris, Geneva, Washington, Ouagadougou, Bobo Dioulasso, Kampala and Freetown and gave us first-hand accounts on design, implementation and monitoring of these instruments.

The Glossary is available in Annex 2

A French translation will be available in the coming weeks. / Une traduction française sera disponible dans les prochaines semaines.