September 16, 2017Doug Hadden
Public Financial Management and country development news from last week found by the FreeBalance Strategy and Innovation Group.
STRIDES MADE IN FINANCIAL INCLUSION: Camilla Hodgson of Business Insider presented six charts about the global unbanked in the WEF Blog. Although there has been an increase in financial inclusion, “two billion people worldwide do not have a bank account or access to a financial institution via a mobile phone, or any other device.”
COMMITMENT TO DEVELOPMENT: Scandinavian countries lead the Center for Global Development 2017 Commitment Development Index. 27 of the richest countries are evaluated on the commitment to aid, finance, trade, environment, security and migration. Are multilateral aid institutions able to advance development given that “global governance rests do not look all that different today than they did in 1944.” Paola Subacchi of Chatham House questioned the relevance of the World Bank and IMF in the WEF Blog. She asserted that “it has been apparent since before the turn of the century that the post-World War II governance structures were untenable, because the assumptions that formed their foundation were beginning to crumble. In particular, with emerging economies, especially China, on the rise, the division between the West and the “rest” was narrowing fast.” Meanwhile, Ricardo Reboredo, writing in Quartz, found that Chinese aid for African infrastructure is unsustainable. “Simply put, capital accumulation and expansion under the old export-oriented model is no longer sustainable. The Chinese economy needs to move towards the production of higher value goods, an expanded services sector, and increased domestic consumption.”
EVIDENCE AND DEVELOPMENT PERFORMANCE: Development effectiveness may be limted by the the biases and capabilities of policymakers. Michael Callen, Adnan Khan, Asim I. Khwaja, Asad Liaqat and Emily Myers identified 3 barriers to policymakers using evidence for development in the Washington Post. The authors found that policymakers are constrained by the ability to interpret evidence, organizational and structural barriers, and unexpected reactions to quantitative and qualitative evidence. A paper from Christine L. Exley and Judd B. Kessler for the Harvard Kennedy School of Government, “The better is the enemy of the good” provided more insight in the behavioural effects of information. Perhaps policymakers could benefit from online courses such as Democracy and Development: Perspectives from Africa, learn about the drivers of democratic development in contemporary Africa Evan Lieberman at MIT.
ANTI-CORRUPTION LESSONS FROM KOSOVO: EU power to investigate corruption and fund anti-corruption initiatives was heralded by Rick Messick in the Global Anticorruption Blog. Messick compared the investigative powers of EULEX in Kosovo with the more limited powers of the U.N. in Guatemala. The scale of corruption in Kosovo and Guatemala may pale in comparison to the $3B Azerbaijan money laundering scheme with “thousands of covert payments, including to European politicians and journalists,” reported Luke Harding, Caelainn Barr and Dina Nagapetyants in The Guardian.
OPEN BUDGETS DATA CRITICAL FOR DEVELOPMENT SUCCESS: Claire Schouten and John Hendra described the need for governments to open the financial books to achieve the Sustainable Development Goals in the International Budget Partnership Blog. Open budgets helps coordinate development efforts among governments, donors, and civil society. Also in the International Budget Partnership Blog, Ann Blyberg reported on research from Duncan Green of Oxfam, and the Overseas Development Institution, on taking governments to court to ensure open budgets. Blyberg stated: “Courts have traditionally been reluctant to intervene in budget-related matters out of a misplaced belief that all budget decisions fall solely within the legislature’s ambit. CSOs that have managed to overcome this reluctance to win favorable decisions often then face the hurdle of ensuring that the government complies with the court’s orders.”
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