Which countries are likely to capture development imaginations, as well as global investment and aid financing?
This is the second blog in a series about whether and how particular countries will define new rules for implementing and financing the Sustainable Development Goals (SDGs).
Will 2015 see some countries become “vanguards” of a new SDGs implementation and financing model? The Common African Position hints at early interest in such an approach on that continent. Arab states may take a similar approach. And if so, which countries should we be looking at? Three criteria may be most important in determining these, those with (1) develop-cratic leadership, (2) blended resource needs, and (3) space for civic accountability.
1. Where are the develop-crats?
The miracle of Afghanistan’s recent election was not that a development expert, Ashraf Ghani Ahmadzai, won the Presidency, but that the whole election was a public battle of economic ideas in a country that has been run by security strongmen for most of its modern history. Although security remains elusive and sought after by most Afghans, they chose to vote for candidates who promised public services and economic growth.
Similarly, Narendra Modi won a landslide in India, not in the old fashioned way—by demonizing neighboring countries—but by offering a future of middle class prosperity. Ghana is run by a historian, John Mahama, who ran on a platform of using oil and mining resources to drive inclusive growth. Senegal is now run by geologist Macky Sall, who offered a similar trajectory for his country. The days when only former liberation fighters and political strongmen could win an African election are coming to an end.
In searching for vanguards, it is worth seeking out countries led by politicians whose source of power is the development narrative, not just because they “get” development, because they reap the political rewards of pro-poor investments and accountable service delivery. I think of them as “develop-crats.” (But maybe there is a better word?)
2. The right blend of financial needs and opportunities?
The countries most likely to engage early in the SDGs will be those who seek to manage a strong blend of public and private, international and domestic financing. Why?
First, countries that are exclusively reliant on domestic finance are unlikely to lead an SDG conversation, because they won’t need to. Vanguards will be those who want to engage in a negotiated international transaction and have the economic self-interest in doing so. Consider Mozambique, which has discovered $200 billion worth of gas off its shores. That funding won’t come on line until the 2020s. Their public finance management capacity is weak today. And the country ranks second last on the human development index. That context is ripe for SDG engagement and a possible deal. If Mozambique publicly committed to its own people to spend 15% of its national budget on health care by 2020, what would donors and investors commit, to build public finance management capacity, strengthen their health system and help meet health needs in the next five years?
Second, donors will make such deals because they must in order to deliver lasting results at scale. The funding with most “elasticity” in the coming years won’t be aid (those numbers are likely to stay relatively steady), but rather domestic resources. The IMF estimates that $9.6 trillion a year may be generated in domestic resources through growth in low and lower middle income countries, but it is not clear how much of this will translate into better public spending, unless donors and investors create incentives for the right kinds of public investment.
Political will and capacity to raise domestic resources differs vastly across developing countries. There is real potential for aid and other international finance to strengthen internal tax collection, attract more taxable investment to countries, and ensure that natural resources are sold at a fair price. If this doesn’t happen, development trillions will be lost to bad deals, tax avoidance, corruption and waste. Whether its aid or DFI is most relevant often depends on levels of domestic resources. See this chart:
3. Where is the space for scrutiny?
The civil society space for accountable service delivery is changing rapidly, for better and worse. Not only are initiatives like the Open Government Partnership catching fire,by challenging governments to a race to the top, but technology is transforming what’s possible in terms of making economic data and government performance more salient in human lives, and allowing citizens to monitor and confront public corruption in whole new ways. For example, civil society in Afghanistan has a 100 day website, which tracks 108 different campaign promises of their new President and reports on them to citizens in clear simple language.
At the same time, the reliability and transparency of public finance and aid data is highly variable, and many states are closing civil society space and repressing dissent, recognizing the power that is lost through transparency. Whether local organized civil society and media can hold their governments accountable for revenue transparency and pro-development expenditures is under threat today all over the world.
Look for countries with developcrats, blended financing, and civil society space to engage in the kinds of self-corrective state-citizen compacts that will shape the rules of development going forward. The ability of these vanguard countries to capture development imaginations and global investment and aid financing will make them the new development darlings, and will eventually incentivize other countries to embrace the power and legitimacy that accountable service delivery brings.