Driving transparency for better development results
Publish What You Fund is embarking on a new initiative aimed at working collaboratively with Development Finance Institutions (DFIs) and other stakeholders to increase the transparency of DFIs. Through this 2 ½ year project, funded by the Bill & Melinda Gates Foundation, we are looking at the use of public money by DFIs to meet global development goals. As more and more development aid is channelled through private institutions, we will use an evidenced-based, multi-stakeholder approach to advocate for greater transparency and accountability of DFIs.
The scale of DFI finance is significant and growing. The annual non-sovereign, private development investments by multilateral and bilateral DFIs has grown from $12 billion in 2000 to $87 billion in 2017– a six fold increase. In October 2017, the UK’s Department for International Development announced a £3.5 billion investment in its DFI, CDC Group. Canada and the US created new DFIs in 2018 and 2019, and Australia is also considering creating its own DFI. However, despite their rising prominence, very few DFIs share information on their private sector portfolios. This makes it both difficult to assess their development impact and to learn from different projects and approaches.
Greater transparency can start to lay the foundation for more informed decision making, more accountability and better allocation of resources, including information to assess the development impact of and learnings from DFI investments.
Our main objective is to increase transparency on the use of public funds, including official development assistance (ODA), for private sector investments through DFIs. This is vital for ensuring more accountable and effective use of scarce public resources, including assessing the development impact of and learnings from DFI investments. Additionally, such information can allow DFIs to demonstrate their added value and impact as well as to increase support for their use of public money.
Publish What You Fund will engage with relevant stakeholders, including DFIs, NGOs, civil society, think tanks and governments to:
- Better understand the interplay between transparency and impactful investment
- Identify and highlight good and innovative practices
- Develop ambitious and actionable transparency recommendations for DFIs
- Identify potential public goods that could support increased transparency
- Advocate for the adoption of transparency recommendations
Approach and Methodology
In the first phase of the initiative, we will seek a deeper understanding of priority issues for development and DFIs, including how the information and data underpinning these issues and practices can be more transparent. Our approach will be collaborative and will take on board progress already made by DFIs:
- We will start with a close examination of the growing body of literature that calls for greater DFI transparency and build on progress that has already been made, including during the consultation process held between DFIs and the International Aid Transparency Initiative (IATI) in 2014 and more recently the Organisation for Economic Co-operation and Development’s (OECD’s) Tri Hita Karana Roadmap for Blended Finance working group.
- With guidance from a multi-stakeholder project advisory board, we will identify five to six priority issues that will form the basis for the project’s work.
- Using a consultative process, we will utilise working groups to delve into each priority issue. We will seek areas of consensus and disagreement, identify good and innovative practices, and look for alternatives to full transparency where necessary.
- We will then develop transparency recommendations for DFIs that are both ambitious and actionable, and which would allow DFIs to share more information, including the development impact of their investments. We acknowledge that DFIs have differing business models, and thus will examine a spectrum of practices among multilateral and bilateral DFIs with an aim to develop recommendations that are broadly applicable.
- Additionally, we will identify whether a public good/goods would be useful to increase access to DFI information and/or assessing progress towards greater transparency.
In the initiative’s second phase, we will use the evidence gathered during the consultative process to share our recommendations broadly. We will advocate with a range of stakeholders, including policy and decision makers, shareholders, DFI decision makers and civil society to garner support for greater transparency.
Why Publish What You Fund?
We are an independent NGO working globally to make aid and development efforts more transparent and effective. Over the past ten years we have established constructive and open relationships with a broad range of donors, including DFIs. We have both supported them in their efforts to increase aid transparency levels while concurrently holding them to account via the Aid Transparency Index process.
We want to apply our expertise in analysing, visualising and presenting aid data and financial flow information to the development finance context. We believe that our combination of practical experience, research and advocacy in the aid arena can transfer to the broader development space, helping to bring about wider transparency and more transformative change.
 We use the term DFI to include International Financial Institutions (IFIs), bilateral and multilateral development banks which have either solely public sector investment portfolios, private sector investment portfolios, or a mix of the two. We recognise that there are diverse definitions for what constitutes a DFI, and that the inherent differences in terms of governance and structure are important. For the purposes of this work we are seeking to include organisations which invest public money and which have developmental impact, poverty alleviation and/or contribution towards the SDGs as part of their core objectives. Understandably we will endeavour to focus our efforts on those organisations which are seen as leaders and norm setters within the DFI community.
 Public good mechanism/tools could include a potential platform for semi-anonymised data, a set of indicators by which transparency can be measured and/or an index that would produce findings and rankings.
 For example: Oxfam’s Open books: How development finance institutions can be transparent in their financial intermediary lending, and why they should be; and Overseas Development Institute’s Blended finance in the poorest countries: the need for a better approach