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Negotiating financing for development commitments: Lessons from OGP

2015 will be a critical year for global development, as countries negotiate financial commitments to implement the post-2015 development agenda, eradicate poverty and drive inclusive growth.

But how will these financial commitments be negotiated and what will bring governments together?

Taking past experience as a guide, governments will set their own internal positions and then discuss them with their peers at policy forums such as the United Nations, G-8 and G-20 meetings, and sometimes behind closed doors.

Meanwhile, civil society organizations will discuss financial “asks” among themselves and with governments — both publicly and privately — in order to push governments toward more ambitious commitments.

Eventually, governments will arrive at a joint position that will be announced at a major event, such as the International Conference on Financing for Development in July or the U.N. General Assembly meeting in September. They will likely agree to something like providing 0.7 percent of gross national income to developing countries in the form of official development assistance, targeting ODA to certain sectors or country groups, or to domestic expenditure targets for specific sectors such as health or agriculture. This process has served the international community well, yielding the Millennium Development Goals in 2000 and the Financing for Development commitments in 2002.

Lowest common denominator?

However, there may be an opportunity to improve this process. In aiming for joint commitments to which everyone can agree, the outcome often reflects the lowest common denominator among stakeholders. And once an agreement is set, there is not much incentive for individual countries to push beyond the joint goals.

Commitments often do not take advantage of stakeholders’ unique capabilities, policy environments or political interests, which are all opportunities to raise the level of ambition. Meanwhile, negotiations are also not as inclusive and transparent as they should be, since many stakeholders prefer not to raise public expectations prematurely. Most importantly, this negotiation model has a mixed track record of generating agreements that are actually fulfilled: Goals and commitments have not always been met.

The Open Government Partnership, which works to improve the quality of governance and public services by bringing countries together to become “more transparent, more accountable, and more responsive to their own citizens,” has developed an innovative approach to multilateral commitments that could provide valuable lessons to the Financing for Development community.

When countries join the OGP, they commit to broad principles outlined in the Open Government Declaration. Once signed up to this overarching vision, countries develop their own two-year action plan with concrete open government reform commitments.

These commitments are tailored to each country’s context and needs, and are thus diverse while remaining relevant to the values of transparency, accountability and citizen participation.

A participatory, open, multistakeholder process

Action plans are co-created through a participatory, open, multistakeholder process with civil society. Co-creation and peer exchange are important tools to push governments toward making more ambitious commitments.

Implementation of the commitments and the quality of the consultation process are regularly evaluated by an independent reporting mechanism, which helps highlight best practice and get countries to achieve their commitments.

The post-2015 financing for development process and the OGP share similar goals and challenges. In both, governments must come together to make concrete commitments toward an overarching vision of the future. In addition, civil society plays an important role in formulating policy and oversight.

The differences lie in how these goals are achieved and the challenges are tackled. The co-creation process of the OGP is more inclusive, going well beyond stakeholder consultations. And because the OGP allows for a diversity of commitments, governments can set goals related to their own capabilities, without being limited by the need to reach compromise.

How can the post-2015 financing for development negotiation process learn from the OGP? Imagine if one government were to commit to provide funding to finish the job on the health MDGs in East Africa, while another promises to allocate financing for climate change adaptation to the most vulnerable countries. A third could invest in developing vaccines for neglected diseases.

Developing country governments could make commitments such as promising to raise tax revenues to 20 percent of gross domestic product or, in the case of a natural-resource-rich country, creating a social fund that would finance health services.

Civil society organizations, emerging donors and private companies would earn an equal seat at the table by tailoring commitments to their own capabilities and resources. All this could help raise the ambition of countries and the likelihood of follow through, since countries would be following their own particular interests.

The biggest threat to the success of such a process is “free-riding.” The traditional multilateral process wherein governments agree to the same set of targets is designed to avoid free-riding and any shirking of responsibility, as all countries commit to the same level of comparable effort. Co-creation with civil society and transparency could help avoid free-riding, though this requires a strong civil society across all countries.

Another concern is coordinating commitments so they cover the full spectrum of funding needs. The problem of “aid orphans” and underinvested sectors that are systematically neglected could become even more severe as stakeholders pick and choose focus areas. Multilateral organizations with a broader mandate could help fill these gaps.

The politics and parameters that govern the post-2015 Financing for Development negotiations will not transform overnight — nor should they. But the innovative OGP model provides important food for thought about ways to facilitate more ambitious commitments, embrace and even celebrate diversity, and create an open and transparent co-creation process.

A system where stakeholders — including recipient governments, emerging donors, civil society organizations and the private sector — participate as peers and contribute according to their own capabilities, may produce something bigger and more exciting than compromise.

Such a system could perhaps encourage governments to agree to more ambitious commitments and promote a true spirit of “race to the top” among stakeholders.

The above article has been re-published from Devex.

Photo source: Flickr; Author: madcarabao_11

Filed Under: Aid Challenges and Solutions
Open Government Partnership