Domestic Resource Mobilization

Domestic resource mobilization must be elevated as a development priority

With the adoption of the Sustainable Development Goals (SDGs) and consensus document from the Financing for Development conference in Addis Ababa, both of which call for greater country ownership and sustainable financing for development, many agree that domestic resource mobilization must be elevated as a development priority. With the cost of implementing the SDGs estimated in the trillions of dollars, developing countries will need to rely more on their own resources. These are not inconsiderable. In 2012, for example, $7.7 trillion in taxes was collected in developing countries; at a regional level, countries in Sub-Saharan Africa collected over $500 billion in taxes in 2013, a total of ten times the official development assistance (ODA) for all of Africa. Financing for the SDGs must come from all available sources, including DRM, ODA, foreign direct investment (FDI), remittances, and private philanthropy.

The Addis Ababa Action Agenda (AAAA), adopted at the Financing for Development conference, pushed the 193 UN member states to reaffirm their commitment to stable and sustainable economic growth. Unlike the earlier FFD conferences, held in 2002 and 2008, the Addis conference focused on how ODA could be a catalyst for leveraging greater development finance rather than the main source. The AAAA endorsed the central role of DRM for developing countries to implement the SDGs supported by private sources of finance (FDI, remittances, and philanthropy). The Addis Tax Initiative (ATI), initiated by Germany, the Netherlands, the United Kingdom, and the United States, honed in on DRM and the potential that it holds for development. ATI’s members, over 30 countries and international development organizations, pledged to double total technical assistance for DRM and taxation initiatives by 2020 and increase their focus on DRM as a priority for development.

It is important to remember that DRM includes more than just taxation; broadly defined it is any source of revenue available to fund government actions, including fees on natural resource extraction, rent, tariffs, and other levies on the trade of goods. It can also include developing deeper local capital markets that would allow for lower lending rates and greater access to local currency denominated bonds. DRM can dramatically increase government revenue, allowing governments to fund development projects that best suit their priorities. The 17 SDGs and 169 sub-indicators require prioritization and planning, and while FDI and ODA may help developing countries partially finance these goals, with overall ODA budgets flat and FDI open to the whims of the market, aid recipients need a more stable source of long-term financing. A country’s own resources can and should fill that role.

 

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A Policymaker's Guide to the Global Fragility Act

The Global Fragility Act (GFA) is a real opportunity to reform how the United States approaches violent conflict prevention and mitigation. The GFA’s success is critical to the administration’s foreign policy objectives but will require swift action and strong leadership.

Brief by Erol Yayboke, Annie Pforzheimer, Janina Staguhn , and Daphne McCurdy — May 6, 2021

Online Event: USAID Economic Growth Policy Launch

Please join the Project on Prosperity and Development for a virtual launch event of USAID's new Economic Growth Policy, which advances the commitment of USAID and the broader U.S. government to promoting inclusive, sustained, and resilient economic growth in developing countries.

Event — January 14, 2021

Financing Small Business Is Critical for a Strong Post-Covid Recovery

CSIS releases a new analysis highlighting how the impact investment and development finance community can effectively mobilize capital and address the economic challenges faced by African and U.S. small-businesses can be addressed in an inclusive and resilient way.

Brief by John Simon, Agnes Dasewicz, and Sundar R. Ramanujam — September 24, 2020

Covid-19 Demands Innovative Ideas for Financing the SDGs

The Covid-19 pandemic exacerbates the challenges to achieving the 17 Sustainable Development Goals and highlights the need for innovative and scalable tools, such as guarantees, green and infrastructure bonds, and advanced purchase agreements, to fill the financing gap.

Brief by Daniel F. Runde, Christopher Metzger, and Hareem F. Abdullah — May 7, 2020

Fighting Corruption for U.S. Economic and National Security Interests

Reducing corruption and promoting economic growth in developing countries supports the United States’ economic and national security interests. Anti-corruption legislation and transparent procurement processes help U.S. companies compete and win contracts abroad.

Report by Daniel F. Runde and Christopher Metzger — April 13, 2020

The New Missing Middle in Development Finance

The CSIS Project on Prosperity and Development releases a new policy brief that addresses the critical financing gap which the global micro, small, and medium enterprise landscape faces in the growth stage of innovation.

Brief by Daniel F. Runde, Erol Yayboke, and Sundar R. Ramanujam — November 13, 2019

USAID’s Evolution As An Institution

Please join us for an exit interview with Susan Fine to hear her reflections and recommendations based on her distinguished career at USAID.

Event — October 31, 2019