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The Global Campaign for Aid and Development Transparency

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Home / Our Work / DFI Transparency Initiative / Objectives, Approach & Methodology

Objectives, Approach & Methodology

Objectives

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.

We are engaging with relevant stakeholders, including DFIs, NGOs, civil society, the private sector, think tanks and governments to:

  • Better understand the interplay between transparency and impactful DFI investment
  • Identify and highlight good and innovative practices
  • Develop ambitious and actionable transparency recommendations for DFIs
  • Create the DFI Transparency Tool, a public good which identifies a set of indicators by which transparency can be measured
  • Complete a comparative baseline assessment of leading DFIs using the DFI Transparency Tool
  • Advocate for the adoption of the DFI Transparency Tool and transparency recommendations

Approach and Methodology

In the first phase of the initiative, we were seeking 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. We adopted a collaborative approach and took on board progress already made by DFIs:

  • We started with a close examination of the growing body of literature that calls for greater DFI transparency[2] and built 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 identified five priority issues that formed the basis for the project’s work:
    • Basic Project Information
    • Impact Management – Objectives, Theories of Change and Impacts
    • Environmental, Social and Governance (ESG) and Accountability to Communities
    • Value of Investment: Mobilisation and Structure of Deal
    • Financial Intermediaries

Research of each of these work streams took three to four months and ran consecutively:

  • We produced a landscape analysis of disclosure for each priority area which was informed by a systematic review of published data of approximately twenty bilateral and multilateral DFIs.
  • Using a consultative process, and informed by a multi-stakeholder expert working group, we conducted in-depth research into each priority issue. We sought areas of consensus and disagreement, identified good and innovative practices, and looked for alternatives to full transparency where necessary.
  • We produced working papers for each work stream that presented the findings, arguments for increased transparency, and recommendations.
  • We supplemented our principal research with deep dives on specific areas that required further interrogation.
  • We then developed 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 examined a spectrum of practices among multilateral and bilateral DFIs to develop recommendations that are broadly applicable.
  • Finally, we developed the DFI Transparency Tool as a public good. The tool is designed to guide future DFI disclosure towards greater transparency and provide a framework of analysis for future assessments of the sector.

In the initiative’s second phase, we are using the evidence gathered during the consultative process to share our recommendations broadly and promote the DFI Transparency Tool. We are advocating with a range of stakeholders, including policy and decision makers, shareholders, DFI decision makers and civil society to garner support for greater transparency. Using the DFI Transparency Tool we will complete a pilot assessment of DFI transparency during 2022 that will produce a report containing comparative baseline assessments of leading DFIs. To complete this assessment, we will continue our multi-stakeholder approach through the following phases:

  • Methodology development: we will develop a methodology for our assessment over the first months of 2022. The methodology will establish a project sampling method, a weighting of indicator scores, and a framework for the selection of DFIs to be included in our pilot assessment. We will conduct another phase of public consultations to present and refine our methodological approach.
  • DFI selection: we will select DFIs for assessment according to the framework developed during the methodology phase. DFIs will be informed of their inclusion in the pilot assessment and a phase of targeted engagement will commence.
  • Data collection and analysis: we will collect sample data over two phases. The first phase will be a confidential preliminary analysis allowing further engagement with the relevant DFI on areas for potential improvement. The second phase will be analysed for our pilot assessment report. The full detail of how the collection and analysis will work will be determined during the methodology development phase.
  • Pilot assessment report: we will launch our pilot assessment in early 2023, providing a public, comprehensive comparative analysis of the transparency of the selected DFIs.

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.

Notes

[2] 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

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Paul James

Paul James

Senior Research Officer

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Ryan Anderton

Research Officer

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Farzana

Farzana Ahmed

Advocacy Manager

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Downloads

  • DFI Transparency Index Methodology
  • Outlined Changes to DFI Transparency Index Methodology

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