Driving transparency for better development results
In November 2019, Publish What You Fund embarked on a new initiative aimed at working collaboratively with Development Finance Institutions (DFIs) and other stakeholders to increase the transparency of DFIs. Through this multi-year project, funded by the Bill & Melinda Gates Foundation, we have been looking at the use of public money by DFIs to meet global development goals. As more and more public funding is channelled through private institutions, we are using 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 grew from $12 billion in 2000 to $87 billion in 2017 – a sixfold increase.
Development needs have never been greater. The oft-cited financing gap in achieving the Sustainable Development Goals (SDGs) of $2.5 trillion annually makes clear the size of the challenge. Under the Paris Agreement, developed economies committed to mobilising $100 billion a year in climate finance from 2020. Further, the need for development finance has only increased due to the devastating impacts of the COVID-19 pandemic.
In November 2021, we published the findings of our in-depth and collaborative research, based on five work streams. We found that the current state of DFI transparency makes it difficult to see what DFIs are doing, what impact their investments are making, whether they are adhering to their accountability and environmental, social, and governance (ESG) responsibilities, and to what extent they are successfully crowding in the private sector.
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.
Based on our research and consultations, Publish What You Fund has developed the DFI Transparency Tool, a granular tool that will both help to guide DFI disclosure and provide a framework of analysis for future assessments of the sector. Using the DFI Transparency Tool we will complete a pilot assessment of DFI transparency during 2022 and release a comparative baseline assessment of leading DFIs.
 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.