1Over the past two decades, a fast expanding globalisation has translated into rapid world growth with increased economic, social and ecological interdependence across nations. But it has also caused or exacerbated significant cross-border and global externalities. Awareness of this new reality has shifted over time from narrow specialised circles to a much larger audience; the information technology (IT) revolution has expanded dramatically the access to information of the world citizen.
2Today a broad recognition exists on the nature and scope of global public risks, and their impact on development. Climate change is one such challenge which transcends national boundaries and requires concerted worldwide collective action to reduce global greenhouse gases and to support climate-resilient and low-carbon investments in developing countries. There is also a growing international consensus on the urgency to act. Without a vigorous shift to a more resource-efficient and low carbon economy, the world will be confronted by 2050 with a massive further threat to already stressed ecosystems. This could jeopardise the development priorities of the international community. Lifting people out of poverty and achieving sustainable growth will therefore increasingly have to be intertwined with making steady progress in addressing global risks. Indeed, the poor do bear the brunt of more frequent natural disasters, increased water scarcity or hazards to health and agriculture; research and analytical work have now provided solid evidence confirming early empirical findings.
3The threat of pandemics, the weakening of the international financial system, a resurging of protectionism, the harm to the environment or the severe risks related to climate change and conflicts require actions beyond the capability and resources of individual countries. What is needed are internationally agreed, sustainable solutions that take into account the interests of the developing countries. In this regard, consultations and negotiations are happening on the international scene to formulate global public policies in order to respond to the challenges. But how much of this effervescence is making a difference to the poor?
4Based on available evidence and recent evaluation work by the World Bank, the Organisation for Economic Cooperation and Development (OECD) Development Assistance Committee (DAC) and some bilateral donors, this chapter aims at highlighting the results achieved in the implementation of the ambitious official discourse on global public policies, and at suggesting necessary changes for aid agencies to be more consistent and effective in translating their policy commitments into their work.
5The United Nations (UN) system and its specialised international agencies have a pre-eminent role and responsibility to steer the political process to reach international consensus on global public policies and norms. But as illustrated by the ongoing multilateral trade or climate change negotiations, such exercises are complex and often take many years before a comprehensive agreement is reached. In the meantime, a ‘wait-and-see’ approach would be disastrous, weakening dramatically the credibility and impact of the international efforts to reduce world poverty and to promote sustainable development.
6In this context, it is noteworthy that most multilateral and bilateral aid agencies – consistent with their mandate and building on their close dialogue with developing countries – have engaged early in the discussion on the relevance and potential impact of global public policies for development and for the poor. Although they are and will remain only ‘small’ actors in addressing global challenges, aid agencies are playing a major role to inform the debate and to initiate pragmatic support to developing countries. This is reflected through substantive information, publication and advocacy undertaken by bilateral aid agencies within their own countries, interacting with Parliament, civil society and the public at large. Similarly, the World Development Reports on ‘Development and Climate Change’ (World Bank, 2010) and on ‘Conflict, Security and Development’ (World Bank, 2011) are contributing concretely to the international debate on global risks, by assessing the dramatic consequences for the developing countries, and by identifying and costing possible responses.
7Even in the absence of comprehensive international agreements, aid agencies have been chartering a new cooperation course, focused on today’s urgent development needs yet more mindful of the long-term global risks. This has translated into a notable shift in the formulation of their cooperation strategies in recent years, with a clearer commitment towards mainstreaming global issues into policies and programmes, while ensuring full alignment of their operations with the national development priorities of the partner countries.
8The World Bank decided, in 2007, to integrate selected global public good concerns into all aspects of its work. The Bank’s country teams were expected to integrate this new dimension into the Bank’s country strategies and operations, in close dialogue with the partner countries. Moreover, the Bank was to expand its strategic participation into global programmes, to explore new financing modalities, to promote informed and constructive debate on global issues, and to increase its support to the delivery of regional public goods (World Bank, 2007). Most bilateral aid agencies have embarked on similar undertakings. The OECD has recently confirmed a significant move by many bilateral aid agencies towards addressing global issues in their strategy and policy formulation, as part of a renewed effort to meet the Millennium Development Goals (MDGs); multilateral partnerships seem also to benefit from a renewed interest, most prominently by the US in their new development agenda emphasising multilateralism (OECD/DCD, 2011).
9Despite uneven progress in the negotiation on global public policies, a considerable amount of aid has been pledged to help developing countries meeting global risks. A dozen major partnerships to deliver global and regional goods have been established in the past decade, while multi-donors trust funds have skyrocketed to play a crucial role towards the same purpose; most recent data available indicate that in 2007–08 trust funds accounted for about 11 per cent of total official development assistance (ODA) (IEG, 2011b). Billions of dollars have been announced in support of global initiatives including the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM), the Global Environment Facility (GEF), the Global Agriculture and Food Security Program (GAFSP) or the Climate Investment Funds (CIF). During the period 2002–10, the World Bank has contributed to leverage US$57.5 billion under such arrangements. In the context of the climate change, in 2010–12, donors have pledged US$30 billion for fast-starting operations in support of both adaptation and mitigation; they have also committed to mobilising US$100 billion per year from public and private sources by 2020.
10Beyond traditional aid channels, new actors are playing an increasingly influential role. Emerging economies such as China, India or Brazil are becoming significant new donors with aid volumes representing already about 8–9 per cent of total ODA flows (ECOSOC, 2008). Private entrepreneurs and philanthropic foundations, as well as civil society organisations, are active partners for delivering regional and global public goods in developing countries. Moreover, new financing mechanisms have also been introduced to facilitate the funding of high priority global public goods, often bereft of a solid international normative framework. For example, the Advance Market Commitments (AMC) is an innovative way to address market failures and to incentivise companies to create and manufacture vaccines primarily needed in poor countries; donors commit money to guarantee the price of vaccines once they have been developed, thus creating the potential for a viable future market. Catastrophic risk insurance facilities and carbon finance provide new means to poor countries facing respectively short-term liquidity constraints in the aftermath of disasters or funding for medium-term investments in relation to mitigation and adaptation to climate change.
11The commitment of aid agencies to address global risks and to support preventive or remedial measures has delivered some visible results in recent years. As an illustration, the GFATM has made a significant contribution in providing life-saving antiretroviral therapy for people living with human immunodeficiency virus (HIV), tuberculosis treatment and insecticide-treated nets to prevent the transmission of malaria; the GFATM estimates that, every day, its funded programmes save at least 4400 lives and prevent thousands of new infections (GFATM, 2011). Similarly, in 2009, the strong and well-coordinated collective international response under the global programme for H1N1 and avian influenza control successfully contained a severe pandemic which was the first such worldwide occurrence in decades.
12The surge in food prices in 2008–09 represented another major threat to the fight against poverty. Joint efforts by the international community averted a major crisis, providing rapidly considerable resources and policy support to affected poor countries. The Global Food Crisis Response Program (GFRP) mobilised more than US$2 billion, and the World Bank estimates that these resources helped nearly 40 million vulnerable people in 44 countries.
13Recent reports by the Independent Evaluation Group of the World Bank have confirmed that partnership programmes and multi-donors trust funds have emerged in the last decade as the principal vehicle to deliver global and regional public goods. Relevant and effective, these instruments have permitted to involve new development actors (emerging donors, private sector and philanthropic foundations, civil society organisations) with a stronger focus on achieving the MDGs. This pooled grant financing for global public goods has also played a major role in filling a gap in the multilateral system to promote innovative efforts and investments also in middle-income countries; indeed the latter – which are home to many of the world’s most important environmental assets and of most poor – are otherwise not eligible for such concessional funding from multilateral development banks. Overall, the partnership programmes and trust funds are effectively stimulating the delivery of global public goods, as reflected by the CIF (US$6.5 billion) which is expected by the World Bank to leverage US$45 billion of private and public investments in clean technology and renewable energy, forestry and climate resilience.
14In specific areas, such as the adaptation to climate change, several aid agencies have embarked on pilot operations with their partner countries. But at the same time, traditional projects and programmes in relevant sectors such as food security, water or environmental protection have received renewed attention with increased funding.
15Beyond the rhetoric, ambitious pledges and some pilot- or crisis-responses to address global risks and challenges, there is only scant, weak and anecdotal evidence so far on the actual impact of these efforts in the fight against poverty and for sustainable development. While acknowledging significant outputs under some global partnership programmes such as the fight against pandemics, it remains difficult so far to link directly these results to a dramatic progress towards the MDGs and to change the life, condition and prospects of the ‘bottom billion’.
16This relates partly to the deficient quality of the results framework and monitoring and evaluation systems which have been reported in the external evaluations of several global programmes (e.g. Macro International Inc., 2009; IEG, 2011a). But this situation also reflects on the very nature of most ‘vertical’ programmes. Unprecedented amount of funding and attention to needy and well-targeted causes have achieved impressive outputs; but the longer-term results are still difficult to measure. Many open questions remain regarding the limited sustainability of these programmes, their excessive project versus programme approach, the possible distortion of national priorities, the eventual disruption of national delivery systems, the insufficient focus on capacity-building or the negative spillover on non-targeted populations.
17More than one decade after the release of the United Nations Development Programme (UNDP) Report on the Global Public Goods (Kaul et al., 1999), it remains extremely difficult to assess the actual implementation progress and outcome of global public policies; only few evaluations have been released so far by aid agencies. This being said, the available evidence tends to confirm a rather modest overall benefit to the poor. The vulnerability of developing countries to international food price crisis, land degradation or water scarcity has not been reduced in the recent years; health hazards, protectionism and natural disasters remain persistent threats to national and sustainable development strategies. Why is it so?
- 1 Development Assistance Committee peer reviews are available at: http://www.oecd.org/document/41/0,3 (...)
18Aid agencies have taken concrete and pragmatic steps to respond to needs of developing countries facing global risks; these well-targeted efforts have benefited millions of affected and vulnerable people worldwide. On the other hand, the stated intentions and commitments of the aid agencies towards global public goods were more ambitious. Beyond the support to specific projects and partnerships, they had the ambition to mainstream these global themes into their regular country strategies and operations. On this front, the aid agencies have clearly underperformed. In most agencies one observes a striking lack of specifics on how to translate the new corporate priorities into policy actions. Indeed, country directors and their teams rarely avail of the incentives and instruments to advance an agenda that is complex or may not immediately appeal to their counterparts. Nor do they receive the necessary internal budgets to be able to do so effectively. Little has also happened in the strengthening of the accountability systems, internal skills and knowledge sharing mechanisms that could create a stronger capability and momentum. In short, as reflected in most OECD/DAC Peers Reviews conducted in 2010 and early 2011, aid agencies appear to be still poorly equipped to bridge the gap between expectations related to global needs and the regular development cooperation.1
19At the World Bank, recent reviews of development effectiveness have also highlighted this disappointing reality (IEG, 2008, 2009a). They indicate that the treatment of global public goods in Country Assistance Strategies has not significantly expanded over time; thematic networks have not provided the cross-country research, expertise and support needed to foster global public goods at individual country level; even the explicit mentioning of global public goods has been found to be diluted when passing from the thematic network anchors to the regional strategies. The global programmes have often failed to demonstrate how they bring added value to country programmes and the Bank’s operations.
20The country-based allocation and delivery model, which is an uncontested pillar of international development cooperation, presents also specific challenges for advancing the cause of global public policies. Indeed, this model – which rightly gives primacy to the partners’ national decision making on policies and programmes – provides an adequate platform to promote global public goods with significant benefits to be captured at country level (i.e. fight against communicable diseases). But it fails to provide a robust basis to address other global public goods with less immediate returns at national level (i.e. cleaner air or protecting the earth’s climate). This dimension has still to be reflected upon by the aid agencies.
21External evaluations of global partnerships and trust funds often highlight the strong qualitative correlation between effectiveness of the programmes’ governance and the achievement of their objectives. In a recent review of 17 such programmes, the Independent Evaluation Group found that 13 had moderate to significant shortcomings in relation to accountability, efficiency, transparency or fairness (IEG, 2011a). The insufficient involvement of the partner countries in the formulation and coordination of the responses to global risks has increasingly been recognised as affecting efficiency, performance and outcome; this was one important finding of the five-year evaluation of the GFATM (Macro International Inc., 2009). Evidence confirms that delivery mechanisms with shared governance have performed much more effectively. In this regard, aid agencies need to be more consistent in the application of the internationally agreed principles of aid effectiveness, and ensure that mechanisms to deliver global public goods fully adhere to these principles.
22But one has also to admit that many partner countries, and particularly middle-income countries, remain cautious – and even reluctant – when engaging on the issue of global public policies. While most developing countries agree that climate change is one of the biggest long-term risks to their sustainable development, many of them underline their ‘no-choice’ obligation to continue to privilege measures that deliver immediate benefits to the poor, such as accelerated access to jobs, electricity or basic social services. Trade-offs in the allocation of scarce public finance and foreign aid are indeed extremely difficult to decide upon; many governments insist on addressing short-term pro-poor needs versus investing for a more sustainable future growth. This situation translates into a further constraint to a rapid implementation of global public policies. In this regard, developing countries themselves have a shared responsibility for the mixed outcome of these efforts.
23Despite impressive pledges, the actual aid flows to developing countries to face global risks are more disappointing, on three fronts. First, the additionality of the resources is being questioned; although the total volume of ODA has reached a historical level in 2010, many donor countries have not matched their financial pledges to global public goods with a full respect of their commitment to increasing their ODA. This implies much room for the reallocation of resources, from the traditional poverty-reduction agenda to new priorities around global public goods. This trend is a source of potential misunderstanding between donors and aid recipients, the former aiming at fulfilling their international engagement to face global challenges while the latter being concerned with a perceived new constraint on aid, based on donors’ self-interest.
24Second, there has been no noticeable shift, during the past decade, in the share of total multilateral aid in ODA. The strong emergence of global public goods has not translated into an increased relative role of multilateral organisations, despite their established mandate and competence. While substantial flows of aid have been channelled through multi-donors partnerships or trust fund arrangements, the core contributions to multilateral institutions have fallen to a low of 28 per cent of total ODA in 2009, from a peak of 33 per cent in 2001 (OECD, 2011).
25Third, several pledges are simply failing to materialise; the commitment made by the G-8 in 2009 at L’Aquila to mobilise US$20 billion for the GAFSP is a case in point, with less than one billion having been raised by July 2011 (GAFSP, 2011). The current slow and limited progress in the design of the Green Climate Fund casts already some doubts on the capacity of the international community to deliver in time on the commitments made in Copenhagen and Cancun.
26The emergence of new public and private donors in recent years is rather good news, particularly when it means more funding for poor countries. But this proliferation of development actors adds complexity to the aid architecture which is already confronted with a more worrying trend, resulting from the recent fast growing recourse by donors to partnerships and multi-donors trust funds arrangements. This evolution reflects the dissatisfaction of donors with traditional aid mechanisms, due to limitation in bilateral aid and perceived gaps in the operation of existing multilateral institutions. Overall, these new trends lead to more fragmentation of aid and an increased management complexity, with significant potential problems that require careful attention.
27Involved in 120 partnerships and more than 1000 active main trust funds, dealing with 200 government or private donors, the World Bank is the quintessence of this new complexity. Positive is the confirmation that the Bank is recognised as an efficient and attractive partner for development. But the situation is also a source of concern. Internally, the Bank has demonstrated great difficulty to steer this proliferation of funding sources towards efficiency and effective use. Recent independent evaluations have highlighted the deficient integration of these instruments into the Bank’s sector and country strategies, and have called for increased strategic direction and oversight by the Bank’s management (IEG, 2011a,b).
28This situation represents a huge additional challenge for the developing countries. When considering the global health sector, more than 100 major development partners and institutions are presently involved worldwide. Only some of them are formally committed towards the Paris Declaration principles (ownership, alignment, harmonisation, managing for results and mutual accountability). For poor countries, the situation entails significant costs and risks. Large contributions by vertical funds may derail national health strategies and priorities, by distorting or by-passing the budgetary process, and disrupting the national health delivery system due to fierce competition for scarce health workers. In addition, a plethora of funding sources imposes high transaction costs and heavy reporting requirements to already constrained national management capacities.
29Over the past decade, there has been a clear and increasingly consensual identification and recognition of the nature and scope of the global public ills and risks, and their potentially dramatic impact on the developing countries. Even more impressive has been the progressive mastery across the world in formulating and shaping the strategies and some mechanisms to address the challenges, and in providing precise estimates of the means required. Much political and academic rhetoric has celebrated the gradual emergence of global public policies and the related strong commitments to action.
30But implementation has lagged behind.
31While most of the disappointment can be attributed to the slow progress in the international negotiations on global public policies, aid agencies have nevertheless a shared responsibility, having so far delivered rather poorly on some of their stated key intentions. Yes, some actions and concrete responses to global challenges have happened; huge resources have been mobilised to support well-targeted partnerships and multi-donors trust funds during the past decade. Millions of poor and vulnerable people have benefited from these operations. But these results still fall short of the necessary strategic and systemic transformations required for achieving a more sustainable development which can ensure a broader access to global public goods and improved living conditions to mankind. Building on the success achieved so far, and despite frustrating stalemate or slow progress in international negotiations, aid agencies have to significantly revamp their efforts to deliver global public policies. There are two main areas for further action: mainstreaming global public policies into operations and revisiting the international aid architecture.
32Global public policies relate to the whole process towards sustainable development, and they should therefore not be addressed in separate, fragmented actions. When embarking on the track of adaptation to climate change, the developing countries have to reflect in a very holistic manner on the multiple dimensions of managing the challenge, from reforming agriculture and forest management to addressing water scarcity, food security, energy or transport. Similarly, to be relevant and effective on the global public goods, the aid agencies need to position their support in such a broad perspective. For this purpose, the traditional country-based cooperation model remains an appropriate platform for defining a work programme for sustainable development with the partner countries, as long as there is a reasonable convergence on the national and global interests and the time horizon for taking action. Otherwise, priority could be focused on supporting advocacy and research on these global public goods with no immediate capture at national level, as a contribution to better inform national debate in developing countries.
33Dedicated staff with solid thematic, technical and management competences to advance global public themes has to be mobilised. But experience has shown that aid agencies must also address other factors necessary to trigger a successful mainstreaming, such as adequate staff incentives, skills development, results-based approaches and strong accountability systems. Moreover, special attention should be given to ensure a closer than usual linkage between the operational and thematic units, in order for the aid agency to capitalise its full potential of knowledge, experience and competence in shaping its support to the complex needs of developing countries facing global risks. This is an ambitious agenda, beyond ‘business as usual’. It is comforting to note that already some concrete steps are being undertaken by some aid agencies.
34Indeed, the World Bank has recently embarked on significant internal reforms, including the review of its organisational matrix, the delivery instruments and its human resources policies. These reforms will address some of the key requirements for a better mainstreaming of global public policies into the country strategies and operations. In this regard, some recent Country Partnership Strategies (CPS) of the World Bank clearly show an improving practice in mainstreaming global public concerns. This is, for example, the case in the new CPS Costa Rica (2012–15) which is geared to support the long-term country goal of reaching carbon neutrality by 2021. Similarly, the CPS Bangladesh (2011–14) and the latest progress report on the implementation of the CPS Indonesia clearly address the necessary further efforts to adjust and expand the Bank’s support towards environmental sustainability and disaster risk mitigation. These developments are positive signs of more consistent progress across the institution in better integrating global challenges into the Bank’s traditional support to ‘sustainable growth’.
- 2 See http://www.deza.admin.ch/en/Home/Activities (accessed on 8 November 2011) (...)
35Some bilateral agencies have also taken steps to better articulate their operational response to the global risks being faced by developing countries. In this regard, the recent reorganisation of the Swiss Agency for Development and Cooperation (SDC) presents an interesting option for the way forward. This reorganisation is indeed delivering a strong message as regards Switzerland’s commitment to global public policies. While thematic networks have now been merged within the operational units, four global programmes (climate change, water, food security, migration) have been launched; country strategies are starting to better integrate all those dimensions. With specific budgetary allocations (representing 17 per cent of total SDC bilateral aid in 2010), dedicated staff, and a responsibility to ensure a broad sector monitoring, the global programmes aim at providing a policy added value to the regular projects portfolio. This is being achieved through fast-tracking innovative operations, programmes and partnerships with a view to enhance Swiss contribution and delivery to support developing countries facing major global challenges. Two examples: (i) the SDC is actively involved in a project which aims at addressing the critical challenge of water security in the Middle East through the development of collaborative solutions for sustainable regional water management; (ii) in China, the SDC supports a coordinated Swiss response to the invitation by the Ministry of Environment Protection to join in the drafting of national and provincial laws on climate change as well as in the revision of the clean air legal framework.2 This SDC internal transformation builds on a robust signal given by the Swiss Parliament in February 2011, when it approved a dramatic increase of Swiss ODA (to reach 0.5 per cent of gross national income by 2015) and attributed most additional resources for interventions related to water and climate change, as well as to multilateral aid. An ambitious management for results is being put in place to ensure detailed reporting and full accountability vis-à-vis the Parliament.
36The formulation and implementation of policies and operations to tackle climate change, to fight communicable disease, to improve food security or to address water scarcity – as part of a national strategy for sustainable development and poverty reduction – require massive efforts by the developing countries. To support this undertaking, aid agencies have to adjust their business and delivery model. Mainstreaming global public policies into cooperation strategies and building effective global-country linkages do not happen automatically. It is a complex process that implies substantial changes in the traditional business-delivery model for aid. In this regard, it is noteworthy that the OECD succeeded to formulate in 2009, in a joint effort of its development and environment committees under the lead of the Netherlands and Switzerland, substantive policy guidance on integrating climate change adaptation into development cooperation (OECD et al., 2009).
37Nevertheless, as already indicated, institutional, organisational and operational reforms remain crucial to reach the goal. The key changes for moving from the ‘business as usual’ model cannot be underestimated; they imply considerable commitment and political will. They should focus in particular on: (i) effectively integrating global challenges into country cooperation strategies; (ii) formulating, in close dialogue with partners, a comprehensive aid programme which encompasses an optimal mix of instruments (ending ‘silo’ approaches) and innovation; (iii) decentralising responsibilities and capabilities to country offices; (iv) deepening thematic skills and competence for selected sectors; (v) providing adequate staff incentives; (vi) strengthening performance management and accountability. Moving forward, the credibility of aid agencies on the global public goods agenda will be concretely tested in their capacity to deliver such internal reforms.
38Recent trends in international aid delivery are causes of concern and require careful attention. The aid architecture has indeed moved towards a model of ‘hyper-collective’ action, with a proliferation of development partners and an increased aid fragmentation (Severino and Ray, 2010). Practice also varies widely in implementing principles of sound aid delivery. The coordination and effectiveness of collective efforts have become more challenging, affecting the potential benefit to the poor. How to manage this increased complexity, in order to ensure proper coordination, transparency and accountability for results? Much is at stake for the developing countries, with high potential risks and costs.
39The better provision of global public goods requires a more open and comprehensive collaboration between aid agencies and development partners at large. The international community must therefore continue improving its aid delivery. In this context, the role of existing multilateral institutions could be revisited, to better capitalise their competence and experience. But they have first to adapt to the new paradigm. For example, multilateral development banks are primarily implementation agencies; their role could usefully evolve towards a stronger focus on establishing and piloting global collaborative platforms, incentivising good management and partnership practices, while mobilising resources for global responses. If no such alternative emerges, then the pressure for creating new organisations or mechanisms – in an already overpopulated international architecture – will persist, delivering only suboptimal systems for funding global public policies. The ongoing discussion on the design of the Green Climate Fund is a case in point; the outcome of the negotiation will tell on the readiness and capacity of the international community to address the challenge.
40The matter is not so much to find a mundane consensus on how to shape this or that new funding mechanism. What is really at stake is the capacity of the international community to define and support a relevant and effective response to address and mitigate the very serious global public bads that affect already today, and may devastate in the future, the poor in the low-income countries. Implementing global public policies should become truly an urgent priority for the world. To expand the supply of global public goods for a more prosperous, fairer, safer and more sustainable world, drastic actions are now needed! Fragmentation and deficient coordination and alignment of efforts will definitely not foot the bill.