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61. Exploring How the US International Development Finance Corporation Can Support Health Sector Investments: Is the Glass Half Full or Half Empty?

Author:
Julia Kaufman, Janeen Madan Keller, and Rachel Silverman
Publication Date:
07-2021
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
Health sector investments present an opportunity for the US International Development Finance Corporation (DFC), under the Biden-Harris administration, to demonstrate meaningful global leadership and refocus on its development mandate, driving broader health benefits and contributing to global economic recovery. DFC’s early days have been defined by a mixed record, notably in the health sector. Still, in the context of the pandemic’s health and economic impacts, the agency is well positioned to help strengthen pandemic preparedness and expand equitable access to health products and innovation in low- and middle-income countries. Through investments to build private sector manufacturing and delivery capacity, DFC can help stem and reverse these losses and insure against future health crises. This policy paper explores how DFC can strategically invest in health while balancing sometimes competing policy imperatives related to health equity, commercial viability, and foreign policy interests. We first provide an overview of the development finance landscape in the health sector and select DFC health-focused investments to date. We then suggest three high-impact engagement opportunities in the health sector for DFC to consider, including building regional manufacturing hubs for health supplies; providing R&D incentives for biotechnology; and supporting robust supply chains for health-adjacent services and delivery models. Lastly, we outline key principles to guide future DFC health sector investments, such as compatibility with long-term universal health coverage goals, a learning agenda for development effectiveness, and health-specific considerations for additionality and co-financing.
Topic:
Development, Health, Finance, and Investment
Political Geography:
North America and United States of America

62. Identifying Binding Constraints on Digital Payment Services in Ethiopia: An Application of a Decision Tree Framework

Author:
Getnet Alemu, Tadele Ferde, and Alejandro Fiorito
Publication Date:
07-2021
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
While several comparable countries in sub-Saharan Africa have seen a significant increase in financial inclusion, mainly driven by digital financial services, Ethiopia still performs poorly. Even digital payment and transfer services, which lower-income and less literate segments of the population could benefit from, are rarely used. Given the low development level of Ethiopia, numerous supply and demand factors could explain this disappointing outcome. We use a decision tree framework to isolate and analyze potential constraints to find which are binding—that is, which constraints limit the expansion of digital payment services in Ethiopia. Our analysis indicates that supply-side problems are pervasive, and we find that competition problems in the essential digital infrastructure market and in the financial sector are responsible for the inadequate provision of digital payment services in Ethiopia. However, the root cause of inadequate competition, and therefore of low financial inclusion through digital payment services, is institutional deficiencies. The two key institutional deficiencies are the lack of capacity of regulatory and supervisory institutions, and the unwillingness of the central government to enable and promote competition. The dominance of public enterprises, Ethio Telecom and the Commercial Bank of Ethiopia, has kept the prices of digital payment services high, particularly for low-income populations, as fees charged for undertaking low-value transactions are very high and the cost of digital infrastructure (mobile phones and plans) is also substantial. Unless these institutional binding constraints are removed, digital payment services in Ethiopia, and digital financial services more generally, will hit a very short ceiling that limits their enormous potential to improve livelihoods in the country.
Topic:
Development, Finance, Digital Economy, and Digitalization
Political Geography:
Africa and Ethiopia

63. The Quality of Official Development Assistance

Author:
Ian Mitchell, Rachael Calleja, and Sam Hughes
Publication Date:
05-2021
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
The Quality of Official Development Assistance (QuODA) measures and compares providers of official development assistance (ODA) on quantitative indicators that matter most to development effectiveness and quality. It aims to encourage improvements to the quality of ODA by highlighting and assessing providers’ performance. QuODA considers the agency-level measures and characteristics in areas that evidence suggest matters to development and where providers have made commitments. It is a dashboard of key indicators rather than a full assessment of how effective ODA has been, which depends on a wider set of actors and factors. This is the fifth edition of QuODA; it has been substantially revised since the last iteration. The indicators are based on the evidence of what matters to ODA impact and the principles agreed by 161 counties following a series of international meetings leading up to Busan in 2011 and taken forward by the Global Partnership for Effective Development Cooperation.
Topic:
Development, International Cooperation, Humanitarian Intervention, and Development Assistance
Political Geography:
Global Focus

64. Incentivising Investment in Human Capital through the European Fund for Sustainable Development

Author:
Mikaela Gavas and Samuel Pleeck
Publication Date:
05-2021
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
As the EU prepares to significantly scale up its deployment of blended finance, guarantees, and other risk-sharing tools aimed at stimulating investment in developing countries, and, in the face of spiralling needs as a result of COVID-19, this paper analyses how the EU could use its development budget to incentivise private investment in human capital. The paper provides three contributions. First, it gives an overview of the allocation of the EU’s external investment to date. Second, based on interviews with stakeholders, it documents cases of private investment in health and education while exploring some of the barriers to a higher share of investment in these sectors by the EU and its development finance partners. Finally, it puts forward a set of proposals for how to steer greater European external investment through the European Fund for Sustainable Development Plus (EFSD+) toward human capital.
Topic:
Development, Regional Cooperation, European Union, Investment, Human Capital, and Sustainability
Political Geography:
Europe

65. An Analysis of the Binding Constraints on Digital Financial Inclusion in India Using a Decision Tree Methodology

Author:
Nandini Harihareswara and Howard Miller
Publication Date:
04-2021
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
The past decade has seen significant innovation and growth in the volume and value of digital payments in India. However, we find that the associated gains have been heavily concentrated in favor of wealthier and urban customers and have had less impact on lower income and rural populations. While some customers now have a far greater selection of quick, cheap, and convenient digital payments methods, as much as 65 percent of the population remains effectively excluded. Using a decision tree framework, we test a range of factors on the supply and demand sides that could be binding constraints on further digital finance penetration. We find that an unlevel playing field in favor of the (primarily state-owned) banking sector results in a lack of effective competition that could be inhibiting greater innovation and outreach in favor of lower-income and marginalized people. This unlevel playing field is potentially a function of institutional weakness combined with the nexus of control of the government and the banking sector, which is reinforced by the position of the National Payments Corporation of India. This control may also be viewed by the government as necessary to protect economic stability in a very dynamic market. To the extent that institutional deficiencies are the root cause of regulatory barriers to the entry of new providers and the scope of digital financial services offered, they are a binding constraint on advancing digital financial inclusion. Under this market structure, the outreach and inherent business models of digital payments and transfers do not provide sufficient perceived benefits to attract large segments of the population. Further, a lack of trust in providers combines with the perception of low benefits to generate an additional binding constraint, preventing the market from reaching a critical mass at which the bulk of the population would have the means and the incentives to use the system. Therefore, the market remains at an equilibrium below its potential.
Topic:
Development, Governance, Finance, and Digitalization
Political Geography:
India and Asia

66. How Do Development Agencies Support Climate Action?

Author:
Rachael Calleja
Publication Date:
03-2021
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
This paper explores how development agencies are integrating climate action into development portfolios in response to calls to scale-up climate engagements in alignment with both the Sustainable Development Goals and the Paris Agreement. Using data compiled on all 30 members of the Organisation for Economic Co-operation and Development’s Development Assistance Committee (OECD-DAC), this paper maps and analyzes trends in both the scale and usage of official development assistance allocated to support climate activities and the tools and approaches used to integrate climate across development activities. This paper shows that while climate has become a key priority for development agencies, there remains scope for deepening integration by improving monitoring and reporting of climate and development results, integrating climate considerations across the life cycle of projects, and searching for complementarities across agencies.
Topic:
Climate Change, Development, Environment, and Green Transition
Political Geography:
Global Focus

67. A Post-Brexit Trade Policy for Development and a More Integrated Africa

Author:
Kimberly Ann Elliott
Publication Date:
01-2020
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
The United Kingdom will confirm its departure from the European Union on 31st January 2020. As part of its independent trade policy, the government has committed to improve access to UK mar- kets for the poorest countries. This note sets out three ways it can do so: expanding duty-free market access while avoiding piecemeal trade agreements that undermine Africa’s own trade integration ef- forts; using an alternative framework for those trade agreements it does negotiate with developing countries; and supporting a “back-to-basics” multilateral negotiation at the World Trade Organiza- tion that could help to rebuild confidence in that institution and thus protect the interests of small and vulnerable countries. After a brief review of the background and context, it sets out specific pro- posals in each of these areas.
Topic:
Development, International Cooperation, International Trade and Finance, European Union, and Brexit
Political Geography:
Africa, United Kingdom, and Europe

68. From Principles to Practice: Strengthening Accountability for Gender Equality in International Development

Author:
Megan O'Donnell
Publication Date:
01-2020
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
Existing accountability mechanisms focused on global gender equality are largely retrospective in nature. Where mechanisms do probe at governments’ commitments to future progress, they often lack accompanying incentive structures (“carrots and sticks”) to encourage ambition. Countries re- port their progress implementing the Convention on the Elimination of All Forms of Discrimination against Women and the Beijing Platform for Action, participate in annual Commission on the Status of Women sessions, and touch on gender equality as part of voluntary national review reporting for the Sustainable Development Goals. Although these processes, among others, provide an opportu- nity for country reflection and for civil society engagement, they do not mandate that governments establish and adhere to forward-looking, specific commitments detailing how they aim to promote gender equality. The absence of future commitments makes it difficult for civil society actors to hold governments to account according to well-defined metrics. At the same time, governments and women’s rights advo- cates worldwide are increasingly discussing and adopting “feminist foreign policies” and “gender-re- sponsive budgeting.” There is a need to clearly define with robust and transparent metrics what these terms mean and how to hold countries who claim to be “feminist” and “gender-responsive” account- able for ambitious progress, while also encouraging other countries to increasingly prioritize gender equality.
Topic:
Development, Gender Issues, Inequality, Feminism, and Equality
Political Geography:
Global Focus

69. International Development Cooperation After Brexit

Author:
Mikaela Gavas
Publication Date:
01-2019
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
Mikaela Gavas submitted written evidence to the United Kingdom's House of Lords EU External Affairs Sub-Committee on January 31, 2019. In her evidence Gavas answered questions about the future of UK-EU development cooperation after Brexit.
Topic:
Development, Regional Cooperation, European Union, and Brexit
Political Geography:
United Kingdom and Europe

70. Learning Equity Requires More than Equality: Learning Goals and Achievement Gaps between the Rich and the Poor in Five Developing Countries

Author:
Maryam Akmal and Lant Pritchett
Publication Date:
02-2019
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
The Sustainable Development Goals (SDGs) for education include the goal that “all youth...achieve literacy and numeracy” (Target 4.6). Achieving some absolute standard of learning for all children is a key element of global equity in education. Using the Annual Status of Education Report (ASER) data from India and Pakistan, and Uwezo data from Kenya, Tanzania, and Uganda that test all children of given ages, whether in school or not, on simple measures of learning in math, reading (local language), and English, we quantify the role of achieving equality between the richest 20% and the poorest 40% in terms of grade attainment and learning achievement toward accomplishing the global equity goal of universal numeracy and literacy for all children. First, excluding Kenya, equalizing grade attainment between children from rich and poor households would only close between 8% (India) and 25% (Pakistan) of the gap to universal numeracy, and between 8% (Uganda) and 28% (Pakistan) of the gap to universal literacy. Second, children from the poorest 40% of households tend to have lower performance in literacy and numeracy at each grade. If such children had the learning profiles of children from rich households, we would close between 16% (Pakistan and Uganda) and 34% (India) of the gap to universal numeracy, and between 13% (Uganda) and 44% (India) of the gap to universal literacy. This shows that the “hidden exclusion” (WDR, 2018) of lower learning at the same grade levels—a gap that emerges in the earliest grades—is a substantial and often larger part of the equity gap compared to the more widely documented gaps in enrollment and grade attainment. Third, even with complete equality in grade attainment and learning achievement, children from poor households would be far from the equity goal of universal numeracy and literacy, as even children from the richest 20% of households are far from universal mastery of basic reading and math by ages 12-13. Achieving universal literacy and numeracy to accomplish even a minimal standard of global absolute equity will require more than just closing the rich-poor learning gap, it will take progress in learning for all.
Topic:
Development, Education, Sustainable Development Goals, and Language
Political Geography:
Pakistan, Kenya, Africa, Middle East, India, Asia, and Tanzania