This week the U.S. – the world’s single largest bilateral donor – will join other governments for meetings at the UN to consider the draft of the expected outcome document ahead of the third International Conference on Financing for Development (FfD3) in Addis Ababa in July.
Part of the purpose of this effort is to better understand the evolving financing of development flows.
As many have rightly pointed out, the financing landscape has changed considerably since Monterrey in 2002 and Doha in 2008, making it much more complicated to track and adequately address all of the finance flowing in and out of a country. The number of actors is also greater, further complicating the picture. And the sums are huge – over half a trillion U.S. dollars flowed from developed to developing countries in 2013, with a third coming from governments, funded by taxpayers.
Lots of work, reports, draft language, and discussions have already happened in the preparations for Addis. This is as it should be. This is complicated stuff. But as we sort through the analysis and consider the new ideas and best approaches, let’s try to apply some common sense and optimize the solutions that are already working or have the potential to work better.
Given the complicated landscape of sustainable development, there are several fundamentals worth keeping in mind.
- First, the lack of transparency about how and where money is both supposed to and is actually spent – and with what result – is systematically blocking the ability of developing countries to meet their needs, especially the poorest of those countries. Opening up and using this vast treasure trove of information will be game changing.
- Second, open data standards – which take raw data and put it into a structured, comparable, and useable form – have made enormous strides in the last few years. As US officials with colleagues from other governments work through the FfD solutions, let’s look first to the existing initiatives and strengthen them. In other words, let’s not reinvent the open data and transparency wheels.
The goal in Addis is not just to ensure that there are sufficient funds for development, but that those funds are appropriately targeted and used effectively. Open data standards and transparency play key roles – allowing donors and recipients to plan, citizens to hold governments to account, and all to learn from what works and what does not. How can governments – including the US – make meaningful and measureable commitments, address the preconditions necessary for sustainable development, and ensure that there is a strong follow up process? There are three basic recommendations:
- Commit to publishing information on all development flows. With all the different sources of finance — public and private, domestic and international – it is essential that we have a complete picture of all resources. We need all development actors to commit to publishing timely, comprehensive, and forward-looking information on their activities by 2020. This should be done in a common, open, electronic format, based on existing open data standards. This can build on the progress of the International Aid Transparency Initiative (IATI), which has demonstrated that publication to such an open standard can be done. Currently, there are over 300 organizations, including governments, multilaterals, private-public partnerships, climate finance funds, foundations, private sector implementers, and national and international NGOs already publishing to IATI. Let’s build on the success to date.
- Support joined-up data standards and transparency initiatives. It’s not that we need more data, we need more data that is useable and comparable. This means avoiding data silos by joining up different flows so they are comparable. There are currently a number of transparency initiatives – the Open Government Partnership (OGP), the Global Initiative for Fiscal Transparency (GIFT), IATI, Open Contracting, and the Extractive Industries Transparency Initiative (EITI). Let’s build on these existing efforts and join up these flows.
- Promote capacity building and data use. Open data has all kinds of potential benefits, but for it to really be an effective development tool it must be useable and used. It is in the interest of the U.S. and other donors to promote capacity building for all actors – including national and subnational decision makers as well as those who want to hold their government to account. And this data use should include a particular focus on aligning public finance flows with recipient country budgets – allowing for better coordinating, planning, and accountability at the country level. Experience has shown that when data is used, its quality improves. Let’s enable all stakeholders to use this valuable data, thus helping to improve outcomes. Only then will it become the powerful tool it has the potential to be.
The U.S. has made the commitment to transparency and open data with its own foreign assistance. Let’s take it a step further and make it part of the global solution towards sustainable development for the post-2015 world.