As of today, February 13, only 150 days remain until the major U.N. Financing for Development (FfD) conference in Addis Ababa, Ethiopia. Starting on July 13, government leaders from around the world will convene to set ground rules for investing in the world’s sustainable development goals (SDG) to 2030, which heads of state and governments will confirm this September in New York. Since Addis will look, in part, to define new approaches to infrastructure financing, it will also frame terms for a new climate accord due by December in Paris. Both practically and politically, all roads pass through Addis in 2015.

The FfD timetable implies 21 weeks to forge agreements that shift global sustainable development from its business-as-usual trajectory. The agenda is multi-faceted. On the government side, it ranges from thematic issues like financing secondary education and ocean preservation to geography-specific issues like official development assistance for least developed countries and small-island developing states. It includes complex multilateral issues like how to ramp up non-concessional lending to emerging middle-income economies.

Crucially, the agenda extends beyond governments too. Private companies will provide a large share of the resources, technology, and employment that will underpin overarching success. Therefore one of the Addis meeting’s greatest tasks is to identify incentives for private investment in priority areas, alongside ground rules for public-private partnerships. Augmented corporate reporting standards, for example, are needed to ensure fair play.

These issues can only be tackled if the world’s finance, foreign, and development ministries work with line ministries and private sector counterparts to craft financial instruments and policies capable of tackling SDG problems at scale. The last major pre-Addis convening of finance ministers takes place at the World Bank/IMF Spring Meetings, starting on April 17. Since this is the key juncture for those ministers to sign off on proposals, it implies only 63 days actually remain to lock in the key ingredients for Addis.

When considering this year’s challenge, the early history of the Millennium Development Goals (MDGs) is instructive. The March 2002 Monterrey FfD conference is well-known to have been instrumental in launching the MDGs. Much less appreciated are the complementary breakthroughs that took shape around the same time and shifted the entire terrain for global development: the heavily indebted poor countries (HIPC) agreement in 1999, the WHO Commission on Macroeconomics and Health in 2000-2001, the launch of the Global Alliance for Vaccines and Immunizations (now GAVI Alliance) in 2000, and the launch of the Global Fund to Fight AIDS, TB, and Malaria in 2002.

Each of these initiatives played a crucial role in launching the MDGs too. HIPC laid the groundwork for scaled-up social sector investments in low-income countries. The Commission on Macroeconomics and Health established a Monterrey-equivalent consensus for the health sector alone. It defined the essential requirements for health systems that formed arguably the greatest gap in international development efforts during the 1990s. Meanwhile, GAVI and the Global Fund launched a new form of results-oriented multilateralism that bridged public, private, scientific, and non-profit sectors at all levels. On the ground, as developing countries started to register breakthrough results, especially in health, global debates gathered steam on how to achieve all the MDGs.

The implication is that, with such a short window remaining until the Spring Meetings, policymakers need to focus on more than setting new rules for sustainable development financing. They also need to confirm specific, high-impact policies and initiatives that can kick-start immediate action. Analytically, negotiators need to have in mind the sources and uses of investment most essential to SDG success, so that high-level political efforts can focus on solving the problems of greatest consequence. As starting suggestions, Homi Kharas and I have described 9 priority commitments for both public and private actors.

Policymakers also need to recognize that they face two distinct buckets of problems. One includes those that can be solved in time for Addis. The other includes problems that still need to be resolved, but simply require more time to work out over the coming 18-24 months. For the latter bucket, success requires that Addis does not simply punt the issues down the road through loose agreements of intent. Instead, Addis needs to set clear deadlines and points of accountability that can be tracked in the months to come.

The good news is that a growing number of the world’s policy, business, and civil society leaders are eager to make progress. Last month I had the privilege to attend the World Economic Forum’s annual meeting in Davos, Switzerland. One bellwether aspect of the conference was the exceptional range of CEOs from around the world who spoke with clarity and sincerity about the challenge and importance of launching bold SDGs in 2015. This came directly on the heels of the launch of Action/2015, an unprecedented civil society collaboration spanning dozens of countries around the world.

Successful outcomes in Addis—and later New York and Paris—will hinge on active engagement spanning business, government, and civil society alike. In Davos, the challenge was elegantly captured during the closing plenary session by Katherine Garrett-Cox, the CEO of Alliance Trust and long-time leader in the field of sustainable investment. Sharing a stage with the likes of the World Bank President Jim Yong Kim and Oxfam International Executive Director Winnie Byanyima, Garrett-Cox issued a poignant call to action by stressing that “2015 is going to be the ultimate test as to whether public private partnerships actually work.” While stressing the time sensitivity of this year’s policy debates, she also emphasized the role of personal leadership: “We all have a responsibility to say, do you actually want to be part of shaping history or do you want to be consigned to it?” 

The Addis Ababa FfD conference will mark a pivotal juncture on the world’s efforts to achieve sustainable development. The coming 150 days offer a rare window to shape the course for the better. 

A little over a year ago, Brookings and the China Development Research Foundation cohosted a discussion on how to best prepare future generations through early childhood development. Madame Liu Yandong, vice premier of the People’s Republic of China, and Hillary Rodham Clinton, former U.S. Secretary of State, presented dual keynote addresses emphasizing the importance of early childhood development programs and their potential for having long-term global impact.

Madame Liu anticipated that China would soon release a national plan for development of children in poor areas, with a goal “to ensure the healthy growth of every child in China.” She cited data demonstrating how China has met the U.N. Millennium Development Goals to reduce infant and child mortality rates. While acknowledging the “daunting challenge” of promoting children's development in China, which is home to nearly 310 million children, Madame Liu remarked that “investment in early childhood development is a human capital investment with the highest return.” She noted that Chinese President Xi Jinping “attaches great importance to early childhood development,” thus sharing a vision expressed by President Barack Obama.

In December, China’s State Council issued the National Child Development Plan (for 2014‒2020) for Poverty-Stricken Areas (link in Chinese), which aims specifically to reach 40 million rural children in 680 counties. This plan prioritizes early interventions not only to increase child survival, but also to promote healthy child development, from birth to the completion of compulsory education, through provision of quality care and comprehensive protection. The goals are to raise the level of child development in the targeted counties to or near the national average; to reduce under-5 stunting to 10 percent of children; and to reduce the rates of infant and under-5 mortality to 12 per 1,000 children and 15 per 1,000 children, respectively.

This directive encourages national, provincial, and local governments to innovate continually (by conducting pilot studies and then evaluating and revising them);  disseminate the lessons learned; expand capacity in the “know-how” of healthy child development; apply and use data to inform policy and programs; and leverage increased funding from public and private sources. China’s success in innovation and implementation derives from its capability and flexibility to continually experiment with pilot initiatives, to leverage and translate lessons from these pilots to policy, and to scale up—as it did when introducing the reforms of the 1980s and 1990s. 

As development agencies look beyond the goals for 2015 and on to 2030, how early child development is framed in the development architecture really matters. To move forward, there must be a shift from beyond child survival to children’s holistic development by promoting their capabilities. Among the key tasks to consider are redirection of social policies to focus on young children ages 0‒6 years, expansion of public health and education models to incorporate the science of early human development, and collection and use of data to track how well children are doing and to quantify levels of inequality in child development across population groups. 

Population measures that are designed and used to track child development must focus on objective assessments of what children actually “look like,” as opposed to subjective appraisals of where they should be on a milestone chart. Such assessments would then provide evidence for making sound policy decisions and aligning policies with program impacts.  Countries currently and routinely collect data on rates of infant, maternal, and child mortality, as well as breastfeeding and immunization. While it is essential to have reliable data on child survival and access to services, now is the time when governments can and should be seeking indicators that go beyond mere survival, and capture, in addition, how well children are developing.

Building on successful pilots, China’s recent National Nutrition Intervention Program expands coverage of freely provided nutritional supplementation to all young children in remote poor counties. This pilot-to-policy translation was led by the China Development Research Foundation (CDRF). CDRF is now piloting and evaluating a “nutrition plus parenting” intervention modelled after a successful program in Jamaica that has also been replicated in other Latin American countries. It is also planning an independent evaluation of a village-based family skills and child development program emphasizing nurturing care for “left-behind” children, ages 0-6, developed and implemented by the Half the Sky Foundation. With its emphasis on continual evaluation-feedback-revision and translation of effective programs into policy, China is uniquely positioned to share the knowledge and lessons it generates with other developing countries and, ultimately, to leverage increased investment and capacity in early child development both within China and globally.

In just a few short months a post-2015 Education for All agenda will be adopted in Korea at the World Education Forum, and in September the new Sustainable Development Goals will be agreed upon. Many are interested in ensuring a strong post-2015 agenda for education, but we must also ensure urgent and focused action if we are to lend a strong foundation, legitimacy, and credibility to these new and ambitious goals.

Fifteen years ago, the global community set its aspirations to reach the Education For All and Millennium Development Goals (MDGs) by 2015. Yet the new “Millennium Development Goal Two Scorecard”—the second MDG is the one focused on education— released by A World at School demonstrates that we still have some work to do, especially if we are to make it clear that the global community means business when it makes promises to children.

With less than one year remaining to achieve universal education, many countries have yet to establish strategies to achieve this goal. The MDG scorecard finds that only 13 of the 29 countries with over 500,000 out-of-school children—less than half—have a strategy to achieve the second MDG. The majority of the high-burden countries have no comprehensive action plan that includes interventions with associated costs or target dates for deliverables. This means that in the very year we are to reach our goals, not all of the sector plans financed by the international community include a vision or strategy to achieve them.  

Only four of the 29 countries with more than 500,000 children out of school have achieved the recommended level of domestic education financing—20 percent of the national budget. While many countries have made pledges to increase funds, most have not been realized.

Lastly, 22 of the 29 countries in the scorecard are considered “conflict or fragile states,” with 20 alone in the conflict state category. The 2014 data also shows that only 1 percent of humanitarian funding went to education. Keeping in mind that middle-income countries, such as those impacted by the Syria crisis, are not eligible for development assistance from the current global education funding models, there is a clear gap in the existing financing architecture.

Yet it is not too late. While the scorecard shows failing marks, the commitments of donors and developing countries alike do show some success stories. We also know what works to improve the prospects of children having the basic right to go to school and learn: strong plans, donor and country coordination, trained teachers, supportive delivery systems, learning materials, and predictable, adequate financing.

As we head into the Oslo Summit for Global Education in July, which aims to improve bilateral donor coordination to establish a stronger foundation for achieving results for the most marginalized, I would like to challenge the global community. Could we achieve just three basic tasks for our children this year?

1. Ensure that every off-track country has a solid strategy for universal education with timelines, targets, and realistic costing.
2. Support countries to allocate domestic financing by aligning and coordinating bilateral and multilateral aid to make it possible.
3. Close the financing gap for education in emergencies and fix the aid architecture so that education no longer falls through the cracks where it is needed most.

We have had 15 years since launching the MDGs. What are we waiting for? 

Fourteen years ago, as preparation for the 2002 Monterrey Conference on Financing for Development, two colleagues and I wrote a paper estimating the costs of achieving the Millennium Development Goals. While the paper was widely cited and our estimate—an additional $50 billion—was the same as that adopted by the conference (see for example Kofi Annan’s speech), I have been feeling increasingly uncomfortable with some of the methods we used to arrive at an estimate. A number of thoughtful people have also criticized us (here and here). I now think the whole exercise was wrong on at least three counts.

1. It was the wrong question. When you set a personal goal, such as losing a certain amount of weight in a year, you start with all the actions you will take—joining a fitness club to exercise regularly, eating certain foods, and so on. Of course, some of these activities will cost money, but you never start with the costs. By contrast, with the MDGs, once the goals were established, the focus very quickly shifted to the costs—how much additional aid would be needed to achieve the goals? Everyone recognized that it would take more than money, but by starting with the costs, the discussion of all the policy and institutional reforms needed to accelerate progress—not to mention make the additional resources productive—became an add-on rather than the centerpiece of the debate. Furthermore, the policy and institutional reforms were difficult to measure and monitor, whereas it was easier to see if aid had increased by $50 billion. This gave the misleading impression that, if the additional resources were not available, the MDGs would not be reached. In the event, we learned that the countries that made the most progress towards the goals were not necessarily the ones that received the most additional aid. Rather, strong economic growth and improved policies and institutions were the main factors. Instead of “how much would it cost to reach the MDGs,” the right question would be: “If you reached the MDGs, how much would it have cost?”
2. It was probably the wrong answer. When we were (ahem) invited to undertake the costing exercise, we wanted to avoid the double-counting that plagued previous exercises that calculated the cost of achieving each individual goal—and then added them up. So we calculated the cost of reaching the first goal, a 50 percent reduction in the 1990 poverty rate by 2015, only. The estimate was around $50 billion. We recognized that, in reducing poverty to this level, progress towards the other goals—primary education, child survival, etc.—would also be made. Nevertheless, we separately calculated the costs of achieving the education and health goals from the bottom up, by estimating the unit costs of children in school, health care, and so on, and scaling up to the amount needed to reach the goals. This also came to about $50 billion. Again, we recognized that reaching the primary education and child survival goals would go a long way to reaching the poverty-reduction goal. That’s when we decided that, since the goals were complementary, we would completely avoid double-counting (and satisfy the various constituencies for each of the goals) by concluding that the cost of reaching the goals was $50 billion. This may have been an underestimate, but we had not one but two different ways of arriving at the same figure.

That is not to say that each of these two methods was foolproof. We estimated the costs of reaching the poverty-reduction goal by first calculating the growth needed to reduce poverty in each country (applying an estimated growth elasticity of poverty), and then calculating the investment needed to achieve the growth using a fixed incremental capital-output ratio. Neither poverty reduction nor growth follows these linear patterns, but it was the best we could do for all developing countries. 

Similarly, calculations of the cost of the human-development goals involved, in the case of child mortality, looking at cross-country regressions of the determinants of child survival, taking the coefficient on health spending, and essentially inverting it (if $1 of health spending leads to x children surviving, then to reach the goal of, say, 100 children surviving would require $100/x). The only problem was that, in almost all of these cross-country regressions, the coefficient on health spending was not significantly different from zero (the reasons can be found in this paper). So the confidence interval of the cost estimate could be between zero and infinity. (It could also have been negative, especially if the policy and institutional reforms involved cutting wasteful subsidies to improve service delivery, but we chose not to mention that.

3. It is the wrong way to approach development. Poor people are poor because they are stuck in a low-level political equilibrium. When teachers are absent from the classroom 25 percent of the time, students don’t learn. But the same teachers run the electoral campaigns of local politicians who, in turn, give them a job to which they don’t need to show up. Doctors are absent from public health clinics at least as much as teachers—and when present, spend an average of 39 minutes a day seeing patients—because they prefer to work in the fee-paying private practice, and medical unions are politically powerful enough to resist reform. Poor people have to pay high prices for off-grid infrastructure (water tanker operators, candlepower) because politicians perpetuate subsidized water and electricity in order to control whom the utility services. And they lack jobs because of exorbitant transport prices (thanks to protected trucking monopolies) or other monopolies granted to politically connected firms that stand in the way of export competitiveness.

In this setting, approaching development as a problem of finance—the amount of money it will take to achieve the goals—can be counterproductive. From the donor’s side, a focus on raising the $50 billion in resources distracts from investing in the knowledge assistance needed to help unblock these political equilibria. And from the government's perspective, many of the reforms that are needed to accelerate poverty reduction are politically difficult. Discussions of financing needs enables policymakers to avoid these difficult reforms, while giving them an excuse for missing the goals (“the money was not enough”). 

In short, by costing the Millennium Development Goals, I may have helped shift attention away from what is needed to reach the goals, and hence contributed to the perpetuation of poverty. Shame on me.

Enormous amounts of time and effort are going into getting agreement on a strategy for sustainable development this September. The Open Working Group outcome document and the secretary-general’s synthesis report are just the start of an intense process of negotiations on goals and targets that are well underway. But as reported in various business school studies, 60 percent to 90 percent of corporations fail at strategy execution. This suggests it is time to get serious about how to implement the sustainable development goals (SDGs), the topic of the U.N.’s conference on finance for development at Addis Ababa in July this year.

There are lots of steps to strategy implementation. A thoughtful corporation might develop a detailed action plan with specific work assignments, ask whether there is a dedicated implementation team or process, assess human capabilities and assignments, and monitor outcomes and results to fine-tune everything over time. What it will also do is fund the program, first by calculating ballpark figures, then by refining those into more detailed costing commitments that can be expressed in budgets and business plans.

In yesterday’s post, my co-editor of this blog, Shanta Devarajan, wondered whether it was right to try and cost the Millennium Development Goals (MDGs), and concluded he was wrong to have attempted it. I think he is being too hard on himself. It is vital to have a financing plan to accompany any strategy. The problem that he ran into is that his global “ballpark” figures were not deconstructed into detailed budgets and business plans at the country level, where implementation actually occurs.

For the SDGs, it is important not to repeat this mistake. There are already several efforts to arrive at “ballpark” numbers for selected goals, summarized in the Sustainable Development Solutions Network paper and the report by the intergovernmental committee of experts on sustainable development finance. What is missing is the detail that would translate this overview into budgets at the country level.

Of course business plans and budgets are only one element of a strategy implementation process. As I suggest above, countries should have specific action plans outlining policies, organization, capacity development, and monitoring and fine-tuning. So Shanta is undoubtedly correct when he says that “how much would it cost to achieve the MDGs?” is the wrong question. It can’t be answered in the absence of a structured implementation plan. Equally, it is not possible to have an implementation plan without also addressing financing issues. “How much does it cost?” is one part of the answer to the full question, which is “what it would it take to achieve the SDGs?”

It is important not to forget about the non-financial dimensions of implementation too. Money does not solve all ills nor address all problems. Countries and their development partners must think about technological and organizational change for effective delivery of goods and services. It is interesting that the research quoted by Shanta shows that the impact of government spending on health and education is very different across the world and not systematically related to the outcomes or goals that were highlighted in the MDGs. A far more rigorous approach to the effectiveness of public spending will be required for the SDGs, and many countries will have to think about how to improve cost-effectiveness to good-practice levels before they get overly concerned with preparing detailed cost estimates.

Properly structured country implementation plans and country financing plans have the potential to have far-reaching impact. More and more countries are putting together sector plans in education, health, and agriculture, for example. Global funds in health and agriculture also have technical steering committees to vet country plans and ensure that there is a sizeable “bang-for-the-buck.” And it is not just developing countries that do this. The G-20 countries have also been preparing national growth strategies that include sections on how to address infrastructural bottlenecks to growth. Such country-level planning should become accepted practice for all goals.

A well-structured policy and financing implementation plan at the country level would open the door for more effective monitoring and accountability processes. They provide a transparent benchmark of who is expected to do what, on what time frame and with what results. It is this kind of public accountability that could disrupt the “low-level political equilibrium” that has stymied progress in some countries. In such cases, the debate has to shift from “how can aid provide a solution?” to a partnership where governments have full responsibility for their own development programs and make every effort to use their own resources to invest in their futures. But those governments must also be able to count on the international community to leverage their efforts to end poverty by providing at least a certain minimum set of basic needs in health, nutrition, education, water, and energy.

Once one accepts the idea of providing minimum basic services, the role of finance (domestic and external) becomes clearer. According to the International Comparison Project, there were 38 governments spending less than PPP$300 per person on all poverty-related goods and services. These countries cannot be expected to fund basic needs completely from their own resources. Consider a country with a GDP per capita of $1,000, the top end of the low-income threshold. Assume the government collects 20 percent of GDP in taxes, or $200 per person. Assume that it spends half of this on basic services for the SDGs and the other half on defense, administration, and other public goods. Is it sensible to think that poverty—in all its dimensions—could be ended with this level of public spending? The best analyses from the health sector and other disciplines suggest the answer is a clear no. This is essential to understanding why increased official development assistance is essential to achieving the SDGs in low-income countries. It is also why my colleague John McArthur and I have called for a commitment by governments to a minimum per capita spending level on basic services, drawing from tax revenues, aid and other resources.

We now expect governments to raise their ambition to end poverty for everyone, to leave no one behind, as they set about implementing the SDGs. More rather than less country-level analysis is essential to understanding what might be required. Governments should develop their own detailed implementation strategies, with financing included, so that they can continue to discuss and refine them in consultation with development partners and other stakeholders.

Recently I read that World Bank staff were unhappy about major cuts to the institution’s budget. This prompted me to try to figure out what the Bank’s proper budget should be to meet its goal of ending extreme poverty by 2030. I applied a variety of empirical techniques, but in the end realized that the question could not actually be answered because the Bank’s policies and institutional structures are the thing that matter most. It is the wrong question to ask what the World Bank’s budget should be. The right question to ask is: “If extreme poverty is eliminated, what should the Bank’s budget have been?” I am somewhat embarrassed to have tried to answer the budget question since attempting to do so might perpetuate misunderstandings among World Bank staff who believe their work is affected by the presence of a predictable salary….

This logic might seem far-fetched, but it came to mind as a surprisingly apt analogue when I was reading my friend Shanta Devarajan’s rhetorical flourishes while reflecting on his old MDG financing paper in a blog post earlier this week on Future Development. Like my colleague Homi Kharas, I think Shanta’s blog is too self-flagellating, although for different reasons.  

The Millennium Development Goals (MDGs) were launched in the early 2000s as a global response to many years of structural adjustment programs and Washington Consensus-style efforts that focused on policy reforms while scaling back public resources. In sub-Saharan Africa, the consequences ranged from a missed generation of investments in agriculture to an extended period of economic stagnation to widespread health outcome catastrophes. The raging AIDS pandemic was pushing down life expectancies in many countries, famously including Botswana despite the country’s strong economic policies.

In the lead up to the seminal March 2002 Monterrey conference on Financing for Development, provisional costing studies were crucial for shifting the resource-policy pendulum back in to balance. These included the high-profile 2001 Zedillo report (which included heavyweights like Jacques Delors and Manmohan Singh); the  in-depth 2001 Commission on Macroeconomics and Health; and, yes, the World Bank’s 2002 paper, which was filled with caveats on the primacy of institutions and policies.

I spent many years in the middle of the professional MDG policy debates and can’t recall a single occasion where the 2002 World Bank study was referenced as a definitive assessment of MDG financing needs. It was always appreciated as a “quick-and-dirty” assessment prepared for a specific political moment. More rigorous, although still explicitly indicative, costing exercises were published in 2005.  One was presented by my own U.N. Millennium Project team, a product of roughly 18 months of bottom-up work in synthesizing supply and demand-side fiscal actions for a series of low-income countries. The other was presented by the Commission for Africa, where Nicholas Stern’s research team produced very consistent results for one region.

In more recent years, many prominent studies have continued to advance our understanding of global development financing needs. For example, the 2013 Lancet Commission on Investing in Health, led by Larry Summers and Dean Jamison, assessed the investments required to achieve a “grand convergence” in health outcomes by 2035. At a more operational level, GAVI’s medium-term analysis helped inform its highly successful recent replenishment to roll out a new wave of global immunizations programs that will directly save millions of lives over the next five years.

One of the most under-appreciated tools for assessing goal-oriented, cross-sector, country-level investments remains the Maquette for MDG Simulations (MAMS), first developed under François Bourguignon when he was a World Bank chief economist. In a funny wrinkle of MDG history, the Bank’s operational side consistently resisted requests to support more rigorous country-level MDG costings, although this was a primary recommendation in the original paper by Shanta and colleagues. Even after the G-8’s high-profile 2005 aid commitments to Africa, it was left to the IMF and UNDP to write up the macroeconomics of “Gleneagles Scenarios.“

The health sphere has seen the most dramatic MDG breakthroughs. The most clear cut example is the advent of global AIDS treatment programs. In 2000, more than 25 million Africans were infected with HIV and there was no international effort—none at all—to make antiretroviral therapy available. Roughly 2 million people were estimated to be dying every year, simply because they could not afford medicine. This was a low-level global political equilibrium, not a domestic one. Total development assistance for health was worth only around $2 per African, according to the Institute for Health Metrics and Evaluation.

Today there are more than 8 million Africans on life-saving AIDS treatment thanks to the aid-financed launch of the Global Fund to Fight AIDS, tubercolosis, and malaria and the U.S. Presidential Emergency Program for AIDS Relief. These institutions were not launched by economic growth in Africa, although they have probably helped to boost growth. Their scale-up was the product of discernible global policy efforts and resource allocations, backed by MDG mobilization. For the average African country, health aid has increased more than fivefold, to around $13 per capita in 2011.

Africa’s child survival story is equally historic, if more complex, since mortality has many underlying causes. As a rough proxy for health system outcomes, Figure 1 shows that accelerations in under-5 mortality rate declines before and after 2001 are positively correlated with increases in health aid across low-income African countries. The correlation coefficient is 0.52 and all of the major accelerations were accompanied by major aid increases. No serious analyst suggests money “buys” outcomes.  But no serious analysis suggests these outcomes would have arrived in the absence of money.

Financing for the SDGs entails much greater complexity than the MDGs. There are more issues, countries, and forms of financing to consider. One understandable response is to feel overwhelmed and deem the task impractical. This yields the paradox of more complexity prompting less analysis. A better response is to break the challenge down in to manageable problems—separating out those that we already understand from those that we might figure out with a bit more work, and those that might need a better framing in order to make a first dent.

Even the U.N.’s provisional recent summary of sectoral costings has already played a useful policy role. Intergovernmental negotiators now commonly refer to the need for “at least a trillion dollars” of incremental annual investment, with the big numbers driven by infrastructure costs. The figure represents a small fraction of total global investment, but it is big enough to prompt a new outlook for those accustomed to thinking in terms of millions and billions. And although the $1 trillion number is extremely rough in its composition, it quickly helped governments realize that even if all OECD donor countries reached the 0.7 percent aid target then the total would only add up to some $300-350 billion per year. This quickly consolidated the understanding that SDG financing will hinge hugely on domestic resources and private investment in addition to aid.

Costing exercises need to build thoughtfully and carefully on the caveats and lessons of past assessments. Thankfully, many do. In retrospect, early analyses were pivotal to raising and guiding resources that drove subsequent MDG successes. Shanta and colleagues’ quick study might fall short of contemporary analytical standards, but it added a helpful assessment at a key juncture. Considering the extraordinary number of incremental lives saved and improved since, Shanta and his co-authors can be rightly proud of their contribution.

1. Girls' education as a force multiplier

Girls’ education functions as a force multiplier in international development, yielding economic and social returns at the individual, family and societal levels. Educated mothers are less likely to die of complications related to pregnancy, and their children experience lower rates of mortality and malnutrition. As a result of improvements in education for women of reproductive age, an estimated 2.1 million children’s lives were saved between 1990 and 2009. 

Education is associated with increased contraception use; less underage premarital sex; lower HIV/AIDS risks; and reduced child marriage, early births, and fertility rates. Educating girls also yields intergenerational benefits because the children of educated mothers tend to be healthier and better-educated themselves.

Educating girls also contributes to economic growth—increasing a girl’s secondary education by one year over the average raises her future income by 10 to 20 percent.

In addition to its health benefits, education can augment women’s labor force participation and earning potential. This can lead to reduced poverty, greater political participation by women, and women’s increased agency and assertion of their rights at the household and community levels. Educating girls also contributes to economic growth—increasing a girl’s secondary education by one year over the average raises her future income by 10 to 20 percent. 

Girls’ and boys’ right to education is widely accepted in international human rights law, and thus has been enshrined in numerous conventions—including the Universal Declaration of Human Rights, the Convention on the Rights of the Child, and the International Covenant on Economic, Social and Cultural Rights. The Convention on the Elimination of all Forms of Discrimination Against Women sets forth a norm for the fair and equal treatment of women. International humanitarian law protects all children’s right to education during armed conflict. 

The social and economic benefits of education also illustrate the clear business case for schooling, based on returns from investments in education. For example, a recent report showed that for a typical company in India, an investment of $1 in a child’s education today will return $53 in value to the employer by the time the individual enters the workforce.

Download the full paper (PDF) »

The UNESCO Global Monitoring Report (GMR) launched its annual report card this week on the sidelines of the World Bank and IMF spring meetings. The report presents a comprehensive, 500-page overview of education progress over the past 15 years.

So what is the verdict? Overall the report presents a mixed but rather bleak picture. Only one-third of countries achieved all measurable Education for All goals. The headline statistics paint the picture. About 121 million children and adolescents were still out of school in 2012 and the poorest children were four times more likely to be out of school. Learning deficits are huge and nearly 800 million adults are illiterate.

But how depressed should we be? What does the fact that we have not achieved the EFA goals tell us? Could more be done? Certainly. But the failure to meet these goals also tells us about the dangers of setting unrealistic targets. The EFA goals were set to be achieved in less than two decades. This would have required a rate of progress in many countries much faster than has ever been achieved in history. When we look at the numbers more closely—and recognize that many goals were not achievable in the first place—a more optimistic message of significant acceleration of progress over the past 15 years emerges. More than 34 million more children are in school now than would have been had the trends from the 1990s persisted. This acceleration should be celebrated!

Moving forward into the post-2015 era, the key question is how we can further accelerate progress while remaining realistic about what can be achieved. A number of recent studies have highlighted that the highest social returns can be found in investments in quality preprimary education, followed by primary and (lower) secondary education—not in vocational training, higher levels of education, or adult training. The SDGs should take this into account with their focus.

Yet why is it that given these fabulous returns, we have not been able to make a more successful case for investment in education? While a number of countries have increased spending, many developing countries are spending much less than the recommended 4-6 percent of GNP on education. Support from donors has been waning in recent years and less than 5 percent of official development assistance (ODA) is currently devoted to basic education (including lower secondary education). In my remarks at the GMR launch I highlighted three things that will be needed to achieve the “drastic change” the report recommends.

1. Create stronger compacts with governments. Delivering universal preprimary, primary, and lower secondary education in 82 of the poorest countries by 2030 will cost a total of $239 billion annually between 2015 and 2030. The GMR estimates that country governments currently only cover about 40 percent of the cost (about $100 billion out of $239 billion required) and will need to increase this to 90 percent. But, in addition to spending more, countries will also need to spend better. Greater efforts will need to be directed towards ensuring that available resources are focused on those most in need. A recent study by UNICEF as well as our research in Kenya shows how public resources are often allocated in ways that are not pro-poor. Higher levels of education are often subsidized to the detriment of financing quality primary education for the poorest. In Malawi (where basic education fees have been abolished) 70 percent of resources are spent on the 10 percent that are most educated. Examples, such as the one we found in Bangladesh, where primary spending is largely pro-poor are rare.
   
   Fulfilling the ambition of universal basic education will also require much greater efforts from external actors. The GMR estimates that filling the financing gap will require a 300 percent increase in education aid over the next 15 years, from the current $5 billion to $22 billion on average annually. This is an ambitious proposition. Total net ODA has only increased 66 percent in real terms since 2000 and education ODA has increased more slowly, resulting in a lower share of total ODA going toward education. Even if we assumed ODA could reach the U.N. target of 0.7 percent of GNI (which would have been equivalent to an estimated $325 billion in 2013), the financing gap would still not be filled, unless donors devote a much larger share of their ODA to education.
2. Look beyond the usual suspects. Clearly, solutions beyond more traditional funding will also be needed. In addition to improving the effectiveness and allocation of governments and donors, new sources of finance need to be found. Private actors are becoming bigger players in education in developing countries. The GMR highlights the role played by non-state actors in bringing education to the neediest, but its analysis of the potential of new forms of finance is surprisingly short. Non-state financing and philanthropic efforts in education remain low. A recent study highlighted that barely 10 percent of corporate social responsibility funds of major international corporations are spent on education, much below the recommended 20 percent. For financing goals around education to be met will require action beyond the usual ODA suspects and must include all actors. The desire to include a larger set of players in the education financing is one of the drivers behind the recent calls to establish a Global Fund for Education.
3.  Develop a narrative around critical investments. The education sector lacks a clear narrative around what kinds of investments are critical to achieve learning at scale. Others sectors have been more successful at this. The ongoing Commission on the New Climate Economy, for example, is showing the way. It identifies key actions governments can take to achieve economic growth that is also sustainable. What are the critical investments Ministers of Finance and Education should make to achieve access with learning? The GMR highlights more than 35 policy options, but given scarce resources and even scarcer political opportunities there is a need to prioritize and create a stronger narrative about the key actions and policies governments and donors could pursue. As a recent World Bank paper points out, reviews of what works have also often reached contradicting conclusions. Better data and evidence on financing, learning outcomes, and “what works to achieve learning at scale” are needed to help answer this question. At Brookings, we are aiming to contribute to this through our Millions Learning project.

As we move beyond 2015 and a set of Sustainable Development Goals are formed to continued global development efforts, the GMR will be reinventing itself and become the Global Education Monitoring Report. Using its strong analytical approach, it could play an important role in providing the evidence to create stronger compacts, attract new players, and guide policymakers to make the critical investments needed.

Following Shanta’s confession of his past professional sin in costing the MDGs, it is now my turn to share my experience with a fundamentally flawed belief.

In my youth and up until the 1990s I still thought, like most activists on the left did, that the solution to global poverty lay in taking resources away from the rich and redistributing them to the poor. At that time the world had a relatively stable structure with the so-called first world (market-based rich countries), second world (the socialist countries), and third world (the remaining countries, almost all of them very poor). Fighting inequality and injustice was seen as the same as redistribution. It was and still is a very human approach to many of the ills that are still affecting us across the world. People who care about others want to fight the injustices of the world.

At the global level, we believed in the “dependency theory,” which assumes that rich countries acquired their wealth through “exploitation” of poor countries. It is true that there has been exploitation of dramatic scales in history; even today, many tragedies are related to global inequality (just look at all those stranded and dying in the Mediterranean). However, the fact that Northern countries are rich because Southern countries are poor is misguided. I still remember the moment when my professor called these beliefs “pure nonsense.” I shuddered because I felt that this was an outrageous statement. It took a while until I grasped that countries like the East Asian Tigers and many other emerging economies grew rich despite their alleged dependency on the West.

Too often we follow a “fixed-cake” fallacy. The main mistake many people make, and I was among them, is to assume that the economic cake is fixed in size and things will stay as they are today. If that were true, it would be even more challenging to fight poverty and injustice because many people would need to reduce their standard of living for others to gain something. Fortunately, the cake does grow. Since 1990, global GDP has more than doubled from $47 trillion to 99 trillion (PPP, 2011 Int$). Most of this growth has happened in countries that were as poor 25 years ago as most of Africa is today. Today’s GDP of emerging markets and developing countries is larger than the total GDP of the world in 1990 (see Figure 1). If the world only focused on redistribution, many of these previously poor countries could have never grown rich. 

Figure 1: The cake doubled since 1990, mainly thanks to emerging economies 

So how did countries like South Korea, Chile, and India overcome the dependency they were said to be in? Instead of pursuing protectionist trade and economic policies as suggested by dependency theorists, these economies opened themselves up to foreign trade and supported export-oriented production. Other countries, especially in sub-Saharan Africa, are still trying to catch-up. But they are left behind because of too little—not too much—trade. If sub-Saharan Africa suddenly ceased to exist there would be little impact on a country like Germany, whose trade with the region is now at around 1 percent and only starting to pick up gradually. If there were more trade, poor countries would likely be much wealthier.

Catching-up is easier if every person can develop their full potential, if there is equality of opportunity. Joseph Stiglitz’s recent argument that rising inequality in societies hampers development, especially if incompetent people reach power and maintain it at the detriment of the poor, is a prescient warning of the dangers of inequality. At the same time, this is should not be mistaken with the fact that some degree of inequality is a natural consequence of development. Just imagine life some 10,000 years ago. With very few exceptions, everyone would have been considered poor by today’s definition. As many people get richer, the gap between those escaping poverty and those left behind is naturally getting larger, a trend we observe even as a larger share of people escape poverty.

In short: Whenever you listen to politicians, watch out if they want you to believe in the fixed cake fallacy. Instead, think of development as a dynamic process. Think of young people not just as those in need of jobs, but also those creating jobs. Think of an interconnected knowledge world, where what you have in your brain and heart matters more than what you have in your pockets. Then you won’t make the same intellectual mistakes I made.

In 2000, the first set of Millennium Development Goals pledged to halve the proportion of people living in poverty as well as those living with hunger by 2015. This was less ambitious than the goal adopted by the World Food Summit in 1996, which aimed to cut the number of hungry by half.

The World Bank and the Food and Agricultural Organization (FAO) respectively monitor these poverty and hunger targets. The World Bank declared victory in poverty reduction in 2010, well before the target date of 2015. But with regards to hunger, the latest FAO report noted that globally about 795 million people are still undernourished—about 216 million less than in 1990, but a slow decline from the nearly 991 million hungry who lived in developing countries in 1990, the domain of the MDGs. The MDG’s hunger target of proportional decline was missed by only a small margin. Yet meeting the World Food Summit goal would have required bringing this number down to about 515 million, some 265 million fewer than the latest 2014-2016 estimate.

The achievement on hunger reduction seems underwhelming relative to the reported absolute levels and rates of decline in poverty. An estimated 1.9 billion lived below $1.25 in 1990-1992, nearly a billion more than the 990.7 million hungry estimated by the FAO in 1990. The decline in hungry of 216 million by 2015 was only about a quarter of the estimated decline in the number of poor at 835.5 million in 2015. The biggest decline has occurred in China and Southeast Asia. Chandy and Kharas have questioned the Chinese numbers that describe the country’s progress against poverty. Most of the remaining poverty as well as hunger is in South Asia and sub-Saharan Africa. In 2015, sub-Saharan Africa contained 403.2 million poor and 220 million hungry. In South Asia the corresponding numbers, respectively, are 310.6 million and 281.4 million. Both the World Bank and FAO have also predicted the likely numbers of poor and hungry through 2030 (Figures 1 and 2). Again the World Bank projects poverty to decline more rapidly, with most of the remaining 334.6 million poor out of total projected poor of 411.8 million being in sub-Saharan Africa. In South Asia, the projected 42.5 million would be only 10.3 percent of the global poor by 2030.

Source: http://www.worldbank.org/en/publication/global-monitoring-report and http://iresearch.worldbank.org/PovcalNet/index.htm.

Source: http://www.fao.org/docrep/016/ap106e/ap106e.pdf

In contrast, the FAO projects a slower decline with hunger prevalence more evenly spread between South Asia and sub-Saharan Africa in 2030. Again, India dominates the South Asian picture and the Indian numbers are expected to be high notwithstanding some of the largest programs of safety nets in the world in place, including food distribution, employment guarantee schemes, and school feeding programs, among others.

Exploring the poverty-hunger relationship is overdue. Politically, every secretary-general of the United Nations, every World Bank president since Robert McNamara and every FAO director-general since its establishment have asserted that poverty and food insecurity are inexorably linked. Technically, the poor spend a larger share of their income on food and have higher income and price elasticities of demand than the well off. Even a small increase in food prices pulls people down into poverty; an estimated 46 million fell through the poverty line during the 2007-2008 food and financial crisis. Importantly, lessons from goal setting and their measurement under MDGs should influence adoption of the upcoming set of Sustainable Development Goals and their measurement. SDGs being developed will replace the expiring MDGs and run through 2030.

A part of the difference in performance of the two indicators is explained by how they are measured. The World Bank’s poverty measure PovcalNet is derived from Household Budget Surveys or Income and Expenditure surveys. The FAO measures the prevalence of undernourishment (PoU) at national, regional, and global levels, using dietary energy supply derived from the Food Balance Sheets using official national food statistics provided by member governments adjusted for distribution of income using a parametric procedure. Four dimensions of food security—availability, access, utilization, and stability—are updated annually. Available for nearly all countries, the PoU is the most widely quoted estimate of undernourishment.

In response to criticism, the FAO has refined its aggregate measure and increasingly used food consumption data from National Household Surveys  to compute a set of food security statistics at national and sub-national levels (including gender disaggregated data) to derive coefficients on the distribution of food consumption within the population (coefficients of variation and skewness).There is a growing demand on the FAO to publish estimates of household food consumption going beyond calories to diet diversity measures. But some of the frequently measured indicators do not offer easy solutions to the PoU deficiencies.

It is more difficult to measure household and individual food intake than measuring income or expenditures. Household surveys used to estimate poverty have often proved inadequate for computing the level of caloric intake and even more inadequate for measuring diet diversity and micro-nutrient intake. In principle household survey data can be used to estimate the distribution of calories across population groups and income quintiles, but there are at least three challenges.

1. the quantification of calories derived from food that is eaten away from home
2. understanding intra-household access to food, particularly by women and children
3. the widespread absence of data for national or global estimations

Even for poverty measurement, over 70 countries do not meet the criteria of two surveys in a 10-year period at a five-year interval. The data gap is much larger for food/caloric consumption. Some data-rich countries like India do not exploit data adequately for policy purposes. Hence, the difficulty in abandoning the PoU for a household-survey based measure to estimate national and global hunger. But the push for more consumption-based surveys is growing, including effort to repurpose existing surveys in light of their many uses, irrespective of whether these surveys will ultimately replace the PoU. The existing surveys unambiguously show the need for better food consumption data. The World Bank and FAO are beginning to pursue this effort jointly, but if the world is serious about the SDGs and global monitoring it will need to spend far more resources than the two institutions currently deploy and support complementary national capacity development to obtain global estimates.

This research is part of Uma Lele’s forthcoming book, Food for All: International Institutions and the Transformation of Agriculture.

It is our hope that this year will be marked in history as the year when the world agreed on an ambitious global plan to eradicate poverty and ensure that all children have access to a high-quality basic education. Achieving these education goals will require all hands on deck. Governments, donors and nonstate actors will need to work together to deliver on this promise. Significantly more financing will be required, and resources will need to be spent in the most effective way.

We can build on substantial progress made since the beginning of the millennium. Between 1999 and 2012, the number of out-of-school children decreased from 106 million to 58 million; two-thirds more children were enrolled in primary school; gender parity improved, with the number of countries with fewer than 90 girls enrolled in primary school for every 100 boys falling from 33 to 16; transition and retention rates improved, and the lower secondary gross enrollment ratio increased from 71 to 85 percent. The pace of progress has accelerated compared with earlier trends, revealing the benefits gained from the increased investment in education goals over the past decade following the reaffirmation of the EFA goals and the MDGs.

However, progress has been uneven, and the remaining challenges disproportionally affect the most marginalized populations. Children in rural areas have been twice as likely as those in urban areas to never go to school; the poorest children are five times less likely to complete primary school than the richest; 36 percent of out-of-school children are in conflict affected zones; and 16 of the 20 countries furthest from reaching the Education for All goals are in Sub-Saharan Africa.

This report focuses on how a subset of the targets related to basic education—that is, that all children should complete high-quality pre-primary, primary and lower secondary education—can be financed. This focus was chosen because these basic education goals form the basis of all other goals. They have also been shown to have the highest social returns in developing countries and are likely to be the focus of the bulk of public finance in the years to come. We recognize that the financing of basic education will depend on the extent to which actors can address financing constraints at higher levels of education, which are currently absorbing large shares of public resources in many countries. Solutions to increase financing for basic education need to go hand in hand with developing alternative financing options (e.g., loan programs and selective scholarships) at higher levels of education.

This report reviews the financing efforts for the education sector in developing countries during the past decade and assesses what will be required in the coming years to reach the basic education goals by 2030. We draw on a variety of data sources as well as five country case studies—for Afghanistan, Lebanon, Malawi, Nigeria and Pakistan. The report has been prepared with an eye to inform the Oslo Summit on Education for Development and other international meetings this year that provide a unique opportunity for political leaders and heads of donor agencies to get efforts to fulfill the promises of the United Nations’ new Sustainable Development Goals (SDGs) off to a motivated start.

We explore how much total spending will need to increase between now and 2020 to be on track to reach the basic education goals by 2030. This shorter time horizon was chosen because it is within government and donor planning cycles and is also less sensitive to potential errors in projections of revenue and spending further into the future. Using costing estimates for 2020 for low-income countries (LICs) and lower-middle-income countries (LMICs) produced by the UNESCO Education for All Global Monitoring Report (GMR), as well as our own estimates for upper-middle-income countries (UMICs), we calculate that in 2020, a total annual investment of $30 billion will be required in LICs, $181 billion in LMICs and $326 billion in UMICs (excluding China) to be on track to meet the basic education goals (including pre-primary, primary and lower secondary). This report analyzes how domestic and external resources have evolved over the past decade and how, in the light of these historical trends, the required investments can be mobilized.

Download the full report »

Thousands of delegates have descended on Addis Ababa to set the new financing architecture for a new global partnership. This event, the Third Financing for Development Conference, organized by the New Partnership for Africa’s Development (NEPAD) Agency and Sustainable Development Solutions Network (SDSN), is a high-level conference aiming to address emerging issues in international development cooperation, especially in light of the Sustainable Development Goals and shifting global dynamics. Its outcomes will also address the issue of means of implementation, referring to the “how” the goals set out in the post-2015 development agenda can be achieved.

In particular, closing the infrastructure gap is a top priority for this year’s conference. Water and sanitation, energy, and transport services are just some of the infrastructure sectors sorely in need of financing. For example, in Africa different sectors are being funded by different sources, but without any coordination.

On Monday, as part of the conference, I moderated a panel themed, "Unlocking Public and Private Capital for African Infrastructure," which included Professor Sachs, director of the Sustainable Development Solutions Network and special advisor to U.N. Secretary-General Ban Ki-moon on the Millennium Development Goals; Dr. Ibrahim Mayaki, chief executive officer of the NEPAD Planning and Coordinating Agency; Joseph Stiglitz, Nobel laureate in economics and professor at Columbia University; Dr. Sanjay Peters, associate professor at the Copenhagen Business School; Malcolm Gray, global head of ESG at Investec Asset Management; and James Zhan, director of investment and enterprise, at UNCTAD. The event also brought together other leading representatives from the private and public sector, as well as global think tanks.

This panel explored potential priority subsectors for infrastructure financing as well as how to unlock that financing, especially in Africa. Below are some top takeaways from the event:

• Closing Africa’s infrastructure gap is a top priority in order to put the continent on a path for double digit growth and sustainable development, according to Prof. Jeff Sachs. “There is no choice: Africa needs 10 percent per year of economic growth in the next 15 years,” Professor Sachs said. The only way to achieve this, he emphasized, is to focus on large-scale investments in transnational infrastructure projects in power, roads, broadband, and other core regional infrastructure needs.
• For Africa to realize the 2030 timeframe, the global community must rally around the NEPAD agenda as the continent’s strategy for implementing cross-border infrastructure projects, Prof. Sachs urged. “We need to help support NEPAD achieve its goals,” he said. The NEPAD Agency has identified Africa’s most important infrastructure needs within the context of the Program for Infrastructure Development in Africa (PIDA), which provides the framework to implement 51 priority program and projects in the sectors of energy, transport, broadband and trans boundary water.
• Speaking on the issue of how to crowd in investment, Prof. Sachs encouraged African economies to forge partnerships with East Asia, tap into capital markets, and strengthen continental bodies such as the NEPAD Agency and African Development Bank.
• Dr. Mayaki highlighted that Africa’s challenge is not a lack of resources, but a lack of bankable projects. “We need to invest in the capacity to invest,” he said. It is about proposing structured projects. The CEO especially noted the complementary instruments that have been developed to build the necessary capacity for early-stage project preparation and the Africa50 Fund to finance the implementation of PIDA and other regional infrastructure projects. Dr. Mayaki also underscored the important role of regional economic communities in providing the enabling environment for project implementation, through harmonized policies and regulatory frameworks.
• On his part, Prof. Stiglitz noted that financial markets have “failed to translate pools of savings into productive investment." There is need to better match these large-scale resources with financing priorities of developing countries. “The world has the resources with which to do this. Allocating more of these resources to inclusive development would be good for the global economy,” he said.
• The best way for Africa to achieve its infrastructure goals is to tap into a Global Infrastructure Investment Platform (GIIP), Prof. Stiglitz said. The objective of GIIP is to put forward an ambitious proposal that would allow long-term investors to ramp up their infrastructure asset holdings, with an allocation target of up to 10 percent of assets under management over a 15-year horizon.
• Malcolm Gray expressed some skepticism about large-scale infrastructure projects and noted that small-scale projects could attract private sector financing, especially in the energy and information and communication technology sectors.
• Gray explained that although institutional investors such as pension funds and sovereign wealth funds have a need for long-term investment opportunities, their intermediaries (consultants, asset managers, and issuers of securities) have a shorter-term horizon and do not have expertise in illiquid investments. There is some progress, however, as recent changes in the South African regulatory framework now allow pension funds to invest up to 25 percent of their assets in illiquid investments such as private equity and infrastructure funds. The new regulation also supports environmental and social consideration in investment.
• Finally Mr. Zhan presented the main findings of UNCTAD's new World Investment Report, including proposals to reform the international investment regime. He noted a new methodology developed by UNCTAD, which estimates the contribution of affiliates of foreign multinational enterprises (MNE) to government budgets in developing countries at about $730 billion annually or 10 percent of total government revenues. This new methodology is a useful contribution to the debate on domestic revenue mobilization and base erosion and profit shifting (BEPS) as the largest share of infrastructure financing comes from government budgets.

After the productive exploration of these important and complex issues, the NEPAD Agency, SDSN, UNCTAD, and Africa Growth Initiative at Brookings agreed to continue the conversation by setting up a working group that will move Africa’s regional infrastructure financing agenda forward.

In advance of President Obama’s trip to East Africa on July 23, the Africa Growth Initiative has prepared short travel companions on the economic environments in both Ethiopia and Kenya. The president’s visit to Ethiopia, a rapidly growing economy and the seat of the African Union, underpins the United States’ commitment not only to trade and investment with sub-Saharan Africa, but also its willingness to engage the continent as a whole. Below are key facts on Ethiopia’s economy to consider as President Obama travels to the region. Facts on Kenya can be found here.

Ethiopia is the fifth-fastest growing economy of the 188 International Monetary Fund member countries. The Ethiopian economy has enjoyed strong economic growth with average GDP growth over 10 percent in the past decade, compared to a 5.4 percent average throughout sub-Saharan Africa. This growth has been largely a result of government-led development policies with an emphasis on public investment, commercialization of agriculture, and non-farm private sector development.

Ethiopia is on its way to become a "climate resilient" economy by 2025: Ethiopia has the second-highest hydropower generating capacity in Africa, after the Democratic Republic of the Congo, and the continent’s biggest windfarm. Despite limited hydrocarbon resources compared to neighboring oil-rich nations, Ethiopia exports power to parts of Kenya, Djibouti, and Sudan.

Ethiopia is at the focal point of emerging economies' interest with various delegations of foreign investors from other emerging economies seeking investment opportunities in the country. A recent Brookings report documents highlights the role played by Chinese investments in Ethiopia’s infrastructure financing. Similarly, India is the biggest investor in land in Ethiopia, with Indian companies accounting for almost 70 percent of the land acquired by foreigners.

Ethiopia has made progress towards reaching most of the Millennium Development Goals. Together with strong government action and the largest social protection scheme in the region, Ethiopia has seen remarkable progress towards its development targets. Apart from the overall decline in poverty (reduced by 33 percent since 2000), positive gains have been made in terms of education, health and reducing the prevalence of HIV and AIDS.

Ethiopia has prioritized infrastructure development and regional integration. Ethiopia is investing heavily in physical infrastructure as part of its development strategy. This includes the development and upgrading of the country's power, transport, and telecommunications facilities, with a brand new railway network and the construction of a number of hydroelectric power stations that will allow the country to continue to export power to neighboring countries.

Ethiopia opened the first space observatory in East Africa. The country will also launch its first satellite in the next few years to study meteorology and boost telecommunications.

Ethiopia has made significant progress in improving its economic performance in recent years thanks to the implementation of sound economic policies and financial support from the international community. The following challenges could undermine this rapid economic expansion:

Though economy continues to grow impressively, structural transformation lags. The Ethiopian economy is based on agriculture, which accounts for about 45 percent of GDP and roughly 60 percent of export earnings. Over three-quarters of the population is still employed in the sector, and efforts to pull labor into more productive sectors like manufacturing and service sectors are limited.

Ethiopia’s per capita GDP of $505 is one of the world’s lowest. Though per capita GDP is on the rise—7.2 percent in 2014—it is still the one of the poorest in the world, ranking 173 out of 187 countries on the Human Development Index. Similarly, despite Ethiopia outperforming many sub-Saharan countries in poverty reduction, widespread malnutrition continues to haunt the nation. Estimates suggest that the country loses around 16.5 percent of its GDP each year to the long-term effects of child malnutrition. Dependency on agriculture—coffee in particular—leaves the large rural population vulnerable to droughts, natural disasters, and other economic shocks. Recent periods of rapid inflationary pressures reaching a peak of over 40 percent in 2011 with food prices rising at 100 percent, and large refugee inflows from Eritrea and South Sudan (Ethiopia is Africa’s largest refugee-hosting country) further aggravate these trends.

The country still relies heavily on aid to achieve its development goals. Ethiopia receives the most USAID assistance of any sub-Saharan African country, ranked seventh worldwide. Even among other donors, Ethiopia remains the single-largest recipient of official development assistance in sub-Saharan Africa.

The state continues to maintain control of key economic sectors.  With just over 2 percent internet penetration and 27 percent cellular telephone subscriptions, Ethiopia has one of the lowest rates of internet and mobile telephone penetration in the world. Persistent state interventions (including nationwide internet filtering), public sector monopoly over the telecom sector (investment in telecommunications must be in partnership with the Ethiopian government), and a relatively closed economy have suppressed the growth of economic freedom over the past five years.

Editor’s note: This blog post is part of the Millions Learning project, which seeks to understand how large-scale improvements can be made in learning across various sectors and disciplines. In the following, Chabbott compares BRAC's experience scaling up an innovation in health with its work in primary education.

In the transition from Millennium to Sustainable Development Goals, the international development field has been atwitter with the importance of innovation and scaling up. Ambitious global goals cannot be achieved with business as usual; innovation will be necessary and on a large scale. It appears, however, that while many organizations can generate innovations, few can scale them up quickly.

Since 1971, BRAC has grown from a small Bangladeshi relief organization into the largest NGO in the world, earning a global reputation for scaling up. In our recently published book “Institutionalizing Health and Education for All,” Mushtaque Chowdhury and I recently looked at two of BRAC’s innovations in health and in primary education, hoping to make BRAC’s approach to scaling up more transparent.

Between 1979 and 1990, BRAC taught women in nearly 12 million households how to make and use a homemade oral rehydration solution—lobon-gur—and thereby dramatically and permanently reduce child deaths from diarrhea. Inspired by that experience, between 1985 and 1992 BRAC established 11,000 one-room, non-formal primary education (NFPE) centers (grades 1-3). Featured at an Education For All (EFA) round table in 1990, NFPE later proposed expanding to serve 6 million Bangladeshi children by 2000. When the government did not support that proposal, BRAC stopped expanding but continued operating about 34,000 centers. NFPE also continued to expand in other ways: upgrading its centers to full five-grade primary schools and establishing more than 20,000 pre-schools by 2010.

As BRAC’s first researcher in 1977, now its vice-chair, Dr. Chowdhury conducted much research on lobon-gur and, later, NFPE. For several decades, I have been studying community schools like NFPE and researching EFA efforts at the global level. We both recognized that lobon-gur was a simpler innovation, but careful comparison with NFPE brought many other factors to light.

We first identified similarities between the lobon-gur and NFPE scaling up efforts. We agreed that, (1) the nature of BRAC as an organization, and (2) Bangladesh as a development context played a major role in both efforts. BRAC’s process of scaling up, from field trial to final phase of the scale up, was similar in both cases: innovate, implement, measure, adapt, repeat. Unexpected major issues at each stage of scaling up demanded significant adaptation of both NFPE and lobon-gur throughout the scaling up process.  

In both sectors, BRAC innovated not just the deliverable—lobon-gur and a one-classroom center—but delivery agents and delivery support systems. For both programs, BRAC identified and trained new paraprofessionals (secondary school completers living in the target areas) and provided them better, more consistent support than the official system provided to professionals in those contexts. In addition to regional training centers and laboratories, human resources, public relations, and printing divisions, BRAC embedded teams of program officers in the target areas to provide onsite support. Finally, more than 80 percent of rural Bangladesh—over 56 million people—spoke one language and engaged in farming, fishing, or related enterprises. BRAC needed only one model to reach an enormous number of people. Later, when it expanded into urban slums and later still in other countries, BRAC had to adapt both lobon-gur and NFPE to these new contexts.

Specific characteristics of the innovations also helped to explain different outcomes. Proponents of conventional models of primary health care and primary education systems challenged both models. However, lobon-gur had several advantages in overcoming that challenge, including:

1. A low-cost, scientifically validated, stand-alone model was on-the-shelf before the initiative began.
2. A critical mass of the scientific community was prepared to rally around a selective intervention rather than hold out for a comprehensive (a complete primary care system) approach. Oral rehydration was developed by an international scientific research center and international researchers documented lobon-gur’s development in international journals.
3. A quick, compelling, scientifically validated intermediate outcome measure could validate progress. Lobon-gur staff needed some way to measure progress—or lack of it—before children died. A quick, cheap, universal test (chlorine concentration) determined whether mothers could make an effective lobon-gur. In contrast, the NFPE-specific learning measures that NFPE developed in-house were liable—for lack of universal measures—to be dismissed as biased.
4. The alternative was imminent physical, potentially fatal, harm. Cholera poses a visible, immediate threat to children’s lives in a way illiteracy does not.
5. Diarrheal disease was a humanitarian crisis; literacy was not. The lobon-gur initiative launched 8 years after Bangladesh fought a liberation war and suffered multiple disasters, in a period dominated by humanitarian norms, i.e., something is better than nothing. By 1990, as NFPE was scaling up, Bangladesh’s existential crises had receded and development norms came to the fore. These norms favor global blueprints of best practice, such as the conventional, graded primary school.

Such norms also favored sustainability in the form of permanent organizations, such as governments, which, paradoxically, rarely innovate or scale up anything quickly. Many, however, expand by incorporation. Bangladesh created its official primary system by nationalizing most pre-existing private schools shortly after independence.

These case studies provoke several propositions:   

• Expect no consensus. No amount of rigorous, scientific evidence reduces arguments about the appropriate mix of comprehensive (primary health care systems) vs. selective (lobon-gur) approaches. Partisans of either approach will have to proceed without consensus.
• Many can innovate, few can deliver. Even the simplest innovations need delivery systems and a major bottleneck to scaling up is organizations. Organizations that have proven records of providing services of good quality to the most disadvantaged communities, that are able to innovate at each stage of scaling up, are scarce. Government bureaucracies rarely fit the bill, though their buy-in is critical.
• One credible intermediate outcome measure is worth hundreds-of-thousands of words.
• Early investments in science enable faster scaling up later. The education sector has not made necessary investments in the types of basic research that can improve the conventional, slow-expanding model of primary school and/or provide the scientific foundation for simple, game-changing innovations. That sort of research may require research centers—not program evaluation—embedded in countries with the farthest to go to meet EFA goals and with close ties to research centers of excellence in other countries.

2015 is a pivotal year. Three major workstreams among all the world’s nations are going forward this year under the auspices of the United Nations to develop goals, financing, and frameworks for the “post-2015 sustainable development agenda.” First, after two years of wide-ranging consultation, the U.N. General Assembly in New York in September will endorse a new set of global goals for 2030 to follow on from the Millennium Development Goals (MDGs) that culminate this year. Second, to support this effort, a financing for development (FFD) conference took place in July in Addis Ababa, Ethiopia, to identify innovative ways of mobilizing private and public resources for the massive investments necessary to achieve the new goals. And third, in Paris in December the final negotiating session will complete work on a global climate change framework. 

These three landmark summits will, with luck, provide the broad strategic vision, the specific goals, and the financing modalities for addressing the full range of systemic threats. Most of all, these three summit meetings will mobilize the relevant stakeholders and actors crucial for implementing the post-2015 agenda—governments, international organizations, business, finance, civil society, and parliaments—into a concerted effort to achieve transformational outcomes. Achieving systemic sustainability is a comprehensive, inclusive effort requiring all actors and all countries to be engaged.

These three processes represent a potential historic turning point from “business-as-usual” practices and trends and to making the systemic transformations that are required to avoid transgressing planetary boundaries and critical tipping points. Missing from the global discourse so far is a realistic assessment of the political decisions and institutional innovations that would be required to implement the post-2015 sustainable development agenda (P2015).

For 2015, it is necessary is to make sure that by the end of year the three workstreams have been welded together as a singular vision for global systemic transformation involving all countries, all domestic actors, and all international institutions. The worst outcome would be that the new Sustainable Development Goals (SDGs) for 2030 are seen as simply an extension of the 2015 MDGs—as only development goals exclusively involving developing countries. This outcome would abort the broader purposes of the P2015 agenda to achieve systemic sustainability and to involve all nations and reduce it to a development agenda for the developing world that by itself would be insufficient to make the transformations required.

Systemic risks of financial instability, insufficient job-creating economic growth, increasing inequality, inadequate access to education, health, water and sanitation, and electricity, “breaking points” in planetary limits, and the stubborn prevalence of poverty along with widespread loss of confidence of people in leaders and institutions now require urgent attention and together signal the need for systemic transformation.

As a result, several significant structural changes in institution arrangements and governance are needed as prerequisites for systemic transformation. These entail (i) political decisions by country leaders and parliaments to ensure societal engagement, (ii) institutional innovations in national government processes to coordinate implementation, (iii) strengthening the existing global system of international institutions to include all actors, (iv) the creation of an international monitoring mechanism to oversee systemic sustainability trajectories, and (v) realize the benefits that would accrue to the entire P2015 agenda by the engagement of the systemically important countries through fuller utilization of  G20 leaders summits and finance ministers meetings as enhanced global steering mechanisms toward sustainable development.   Each of these changes builds on and depends on each other.

I. Each nation makes a domestic commitment to a new trajectory toward 2030

For global goal-setting to be implemented, it is essential that each nation go beyond a formal agreement at the international level to then embark on a national process of deliberation, debate, and decision-making that adapts the global goals to the domestic institutional and cultural context and commits the nation to them as a long-term trajectory around which to organize its own systemic transformation efforts. Such a process would be an explicitly political process involving national leaders, parliaments or rule-making bodies, societal leaders, business executives, and experts to increase public awareness and to guide the public conversation toward an intrinsically national decision which prioritizes the global goals in ways which fit domestic concerns and circumstances. This political process would avoid the “one-size-fits-all” approach and internalize and legitimate each national sustainability trajectory.

So far, despite widespread consultation on the SDGs, very little attention has been focused on the follow-up to a formal international agreement on them at the U.N. General Assembly in September 2015. The first step in implementation of the SDGs and the P2015 agenda more broadly is to generate a national commitment to them through a process in which relevant domestic actors modify, adapt, and adopt a national trajectory the embodies the hopes, concerns and priorities of the people of each country. Without this step, it is unlikely that national systemic sustainability trajectories will diverge significantly enough from business-as-usual trends to make a difference. More attention needs to now be given to this crucial first step.  And explicit mention of the need for it should appear in the UNGA decisions in New York in September.

II. A national government institutional innovation for systemic transformation

The key feature of systemic risks is that each risk generates spillover effects that go beyond the confines of the risk itself into other domains. This means that to manage any systemic risk requires broad, inter-disciplinary, multi-sectoral approaches. Most governments have ministries or departments that manage specific sectoral programs in agriculture, industry, energy, health, education, environment, and the like when most challenges now are inter-sectoral and hence inter-ministerial. Furthermore, spillover linkages create opportunities in which integrated approaches to problems can capture intrinsic synergies that generate higher-yield outcomes if sectoral strategies are simultaneous and coordinated.

The consequence of spillovers and synergies for national governments is that “whole-of-government” coordinating committees are a necessary institutional innovation to manage effective strategies for systemic transformation. South Korea has used inter-ministerial cabinet level committees that include private business and financial executives as a means of addressing significant interconnected issues or problems requiring multi-sectoral approaches. The Korea Presidential Committee on Green Growth, which contained more than 20 ministers and agency heads with at least as many private sector leaders, proved to be an extremely effective means of implementing South Korea’s commitment to green growth.

III.  A single global system of international institutions

The need for a single mechanism for coordinating the global system of international institutions to implement the P2015 agenda of systemic transformation is clear. However, there are a number of other larger reasons why the forging of such a mechanism is crucial now.

The Brettons Woods era is over. It was over even before the initiative by China to establish the Asia Infrastructure Investment Bank (AIIB) in Beijing and the New Development Bank (NDB) in Shanghai. It was over because of the proliferation in recent years of private and official agencies and actors in development cooperation and because of the massive growth in capital flows that not only dwarf official development assistance (concessional foreign aid) but also IMF resources in the global financial system. New donors are not just governments but charities, foundations, NGOs, celebrities, and wealthy individuals. New private sources of financing have mushroomed with new forms of sourcing and new technologies. The dominance of the IMF and the World Bank has declined because of these massive changes in the context.

The emergence of China and other emerging market economies requires acknowledgement as a fact of life, not as a marginal change. China in particular deserves to be received into the world community as a constructive participant and have its institutions be part of the global system of international institutions, not apart from it. Indeed, China’s Premier, Li Keqiang, stated at the World Economic Forum in early 2015 that “the world order established after World War II must be maintained, not overturned.”

The economic, social and environmental imperatives of this moment are that the world’s people and the P2015 agenda require that all international institutions of consequence be part of a single coordinated effort over the next 15 years to implement the post-2015 agenda for sustainable development. The geopolitical imperatives of this moment also require that China and China’s new institutions be thoroughly involved as full participants and leaders in the post-2015 era. If nothing else, the scale of global investment and effort to build and rebuild infrastructure requires it.

It is also the case that the post-2015 era will require major replenishments in the World Bank and existing regional development banks, and significantly stronger coordination among them to address global infrastructure investment needs in which the AIIB and the NDB must now be fully involved. The American public and the U.S. Congress need to fully grasp the crucial importance for the United States, of the IMF quota increase and governance reform.  These have been agreed to by most governments but their implementation is stalled in the U.S. Congress. To preserve the IMF’s role in the global financial system and the role of the U.S. in the international community, the IMF quota increase and IMF governance reform must be passed and put into practice. Congressional action becomes all the more necessary as the effort is made to reshape the global system of international institutions to accommodate new powers and new institutions within a single system rather than stumble into a fragmented, fractured, and fractious global order where differences prevail over common interests.

The IMF cannot carry out its significant responsibility for global financial stability without more resources. Other countries cannot add to IMF resources proportionately without U.S. participation in the IMF quota increase.   Without the US contribution, IMF members will have to fund the IMF outside the regular IMF quota system, which means de-facto going around the United States and reducing dramatically the influence of the U.S. in the leadership of the IMF. This is a self-inflicted wound on the U.S., which will damage U.S. credibility, weaken the IMF, and increase the risk of global financial instability. By blocking the IMF governance reforms in the IMF agreed to by the G-20 in 2010, the U.S. is single-handedly blocking the implementation of the enlargement of voting shares commensurate with increased emerging market economic weights.  This failure to act is now widely acknowledged by American thought leaders to be encouraging divergence rather than convergence in the global system of institutions, damaging U.S. interests.

IV. Toward a single monitoring mechanism for the global system of international institutions

The P2015 agenda requires a big push toward institutionalizing a single mechanism for the coordination of the global system of international institutions.  The international coordination arrangement today, is the Global Partnership for Effective Development Cooperation created at the Busan High-Level Forum on Aid Effectiveness in 2011.  This arrangement, which recognizes the increasingly complex context and the heightened tensions between emerging donor countries and traditional western donors, created a loose network of country platforms, regional arrangements, building blocks and forums to pluralize the architecture to reflect the increasingly complex set of agents and actors. This was an artfully arranged compromise, responding to the contemporary force field four years ago.

Now is a different moment. The issues facing the world are both systemic and urgent; they are not confined to the development of developing countries, and still less to foreign aid. Geopolitical tensions are, if anything, higher now than then.  But they also create greater incentives to find areas of cooperation and consensus among major powers who have fundamentally different perspectives on other issues. Maximizing the sweet spots where agreement and common interest can prevail is now of geopolitical importance.  Gaining agreement on institutional innovations to guide the global system of international institutions in the P2015 era would be vital for effective outcomes but also importantly ease geopolitical tensions.

Measurement matters; monitoring and evaluation is a strategic necessity to implementing any agenda, and still more so, an agenda for systemic transformation.  As a result, the monitoring and evaluation system that accompanies the P2015 SDGs will be crucial to guiding the implementation of them.  The UN, the OECD, the World Bank, and the IMF all have participated in joint data gathering efforts under the IDGs  in the 1990s and the MDGs in the 2000s.   Each of these institutions has a crucial role to play, but they need to be brought together now under one umbrella to orchestrate their contributions to a comprehensive global data system and to help the G20 finance ministers coordinate their functional programs.   

The OECD has established a strong reputation in recent years for standard setting in a variety of dimensions of the global agenda.  Given the strong role of the OECD in relation to the G20 and its broad outreach to “Key Partners” among the emerging market economies, the OECD could be expected to take a strong role in global benchmarking and monitoring and evaluation of the P2015 Agenda.  The accession of China to the OECD Development Centre, which now has over fifty member countries, and the presence and public speech of Chinese Premier Li Keqiang at the OECD on July 1^st, bolsters the outreach of the OECD and its global profile.

But national reporting is the centerpiece and the critical dimension of monitoring and evaluation.  To guide the national reporting systems and evaluate their results, a  new institutional arrangement is needed that is based on national leaders with responsibility for implementation of the sustainable development agendas from each country and is undertaken within the parameters of the global SDGs and the P2015 benchmarks.

V.   Strengthening global governance and G20 roles

G-20 leaders could make a significant contribution to providing the impetus toward advancing systemic sustainability by creating a G-20 Global Sustainable Development Council charged with pulling together the national statistical indicators and implementing benchmarks on the SDGs in G-20 countries.  The G-20 Global Sustainable Development Council (G-20 GSDC) would consist of the heads of the presidential committees on sustainable development charged with coordinating P2015 implementation in G-20 countries.  Representing systemically important countries, they would also be charged with assessing the degree to which national policies and domestic efforts by G20 countries generate positive or negative spillover effects for the rest of the world.  This G-20 GSDC would also contribute to the setting of standards for the global monitoring effort, orchestrated perhaps by the OECD, drawing on national data bases from all countries using the capacities of the international institutions to generate understanding of global progress toward systemic sustainability. 

The UN is not in a position to coordinate the global system of international institutions in their functional roles in global sustainable development efforts.  The G-20 itself could take steps through the meetings of G-20 Finance Ministers to guide the global system of international institutions in the implementation phase of the P2015 agenda to begin in 2016. The G-20 already has a track record in coordinating international institutions in the response to the global financial crisis in 2008 and its aftermath. The G-20 created the Financial Stability Board (FSB), enlarged the resources for the IMF, agreed to reform the IMF’s governance structure, orchestrated relations between the IMF and the FSB, brought the OECD into the mainstream of G-20 responsibilities and has bridged relations with the United Nations by bringing in finance ministers to the financing for development conference in Addis under Turkey’s G-20 leadership. 

There is a clear need to coordinate the financing efforts of the IMF, with the World Bank and the other regional multilateral development banks (RMDBs), with the AIIB and the BRICS NDB, and with other public and private sector funding sources, and to assess the global institutional effort as whole in relation to the P2015 SDG trajectories.  The G-20 Finance Ministers grouping would seem to be uniquely positioned to be an effective and credible means of coordinating these otherwise disparate institutional efforts.  The ECOSOC Development Cooperation Forum and the Busuan Global Partnership provide open inclusive space for knowledge sharing and consultation but need to be supplemented by smaller bodies capable of making decisions and providing strategic direction.

Following the agreements reached in the three U.N. workstreams for 2015, the China G-20 could urge the creation of a formal institutionalized global monitoring and coordinating mechanism at the China G-20 Summit in September 2016. By having the G-20 create a G-20 Global Sustainable Development Council (G-20 GSDC), it could build on the national commitments to SDG trajectories to be made next year by U.N. members countries and on the newly formed national coordinating committees established by governments to implement the P2015 Agenda, giving the G-20 GSDC functional effectiveness, clout and credibility.   Whereas there is a clear need to compensate for the sized-biased representation of the G20 with still more intensive G-20 outreach and inclusion, including perhaps eventually considering shifting to a constituency based membership, for now the need in this pivotal year is to use the momentum to make political decisions and institutional innovations which will crystallize the P2015 strategic vision toward systemic sustainability into mechanisms and means of implementation.

By moving forward on these recommendations, the G-20 Leaders Summits would be strengthened by involving G-20 leaders in the people-centered P2015 Agenda, going beyond finance to issues closer to peoples’ homes and hearts. Systemically important countries would be seen as leading on systemically important issues.  The G-20 Finance Ministers would be seen as playing an appropriate role by serving as the mobilizing and coordinating mechanism for the global system of international institutions for the P2015 Agenda.  And the G-20 GSDC would become the effective focal point for assessing systemic sustainability not only within G20 countries but also in terms of their positive and negative spillover effects on systemic sustainability paths of other countries, contributing to standard setting and benchmarking for global monitoring and evaluation.    These global governance innovations could re-energize the G20 and provide the international community with the leadership, the coordination and the monitoring capabilities that it needs to implement the P2015 Agenda. 

As the MDGs culminate this year, as the three U.N. workstreams on SDGs, FFD, and UNFCC are completed, the world needs to think ahead to the implementation phase of the P2015 sustainable development agenda. Given the scale and scope of the P2015 agenda, these five governance innovations need to be focused on now so they can be put in place in 2016.

These will ensure (i) that national political commitments and engagement by all countries are made by designing, adopting, and implementing their own sustainable development trajectories and action plans; (ii) that national presidential committees are established, composed of key ministers and private sector leaders to coordinate each country’s comprehensive integrated sustainability strategy; (iii) that all governments and international institutions are accepted by and participate in a single global system of international institutions;   (iv) that a G-20 monitoring mechanism be created by the China G-20 in September 2016 that is comprised of the super-minister officials heading the national presidential coordinating committees implementing the P2015 agenda domestically in G-20 countries, as a first step;  and (v) that the G-20 Summit leaders in Antalya in November 2015 and in China in September 2016 make clear their own commitment to the P2015 agenda and their responsibility for its adaption, adoption and implementation internally in their countries but also for assessing G-20 spillover impacts on the rest of the world, as well as for deploying their G-20 finance ministers to mobilize and coordinate the global system of international institutions toward achieving the P2015 agenda.

Without these five structural changes, it will be more likely that most countries and actors will follow current trends rather than ratchet up to the transformational trajectories necessary to achieve systemic sustainability nationally and globally by 2030.

Ye Yu, Xue Lei and Zha Xiaogag, “The Role of Developing Countries in Global Economic Governance---With a Special Analysis on China’s Role”, UNDP, Second High-level Policy Forum on Global Governance: Scoping Papers, (Beijing: UNDP, October 2014).

Zhang Haibing, “A Critique of the G-20’s Role in UN’s post-2015 Development Agenda”, in Catrina Schlager and Chen Dongxiao (eds), China and the G-20: The Interplay between an Emerging Power and an Emerging Institution, (Shanghai: Shanghai Institutes for International Studies [SIIS] and the Friedrich Ebert Stiftung [FES], 2015) 290-208.

Global Review, (Shanghai:  SIIS, 2015,) 97-105.

Colin I. Bradford, “Global Economic Governance and the Role International Institutions”, UNDP, Second High-level Policy Forum on Global Governance: Scoping Papers, (Beijing: UNDP, October 2014).

Colin I. Bradford, “Action implications of focusing now on implementation of the   post-2015 agenda.”, (Washington: The Brookings Institution, Global Economy and Development paper, September 2015).

Colin I. Bradford, “Systemic Sustainability as the Strategic Imperative for the Future”, (Washington: The Bookings Institution, Global Economy and Development paper; September 2015). 

Wonhyuk Lim and Richard Carey, “Connecting Up Platforms and Processes for Global Development to 2015 and Beyond:  What can the G-20 do to improve coordination and deliver development impact?”, (Paris: OECD  Paper, February 2013).

Xiaoyun Li and Richard Carey, “The BRICS and the International Development System: Challenge and Convergence”, (Sussex: Institute for Development Studies, Evidence Report No. 58, March 2014).

Xu Jiajun and Richard Carey, “China’s Development Finance: Ambition, Impact and Transparency,” (Sussex :  Institute for Development Studies, IDS Policy Brief, 2015).

Soogil Young, “Domestic Actions for Implementing Integrated Comprehensive Strategies:  Lessons from Korea’s Experience with Its Green Growth Strategy”, Washington: Paper for the Brookings conference on “Governance Innovations to Implement the Post-2015 Agenda for Sustainable Development”, March 30, 2015).

Editor's Note: This is a chapter from "The Last Mile in Ending Extreme Poverty," which explores the challenges and steps needed to end extreme poverty.

In 1990 approximately half of the population in the developing world lived on less than US$1.25 a day. By 2010 some 700 million people had been lifted out of poverty, dropping that rate to 22 percent, and fulfilling the first Millennium Development Goal of cutting extreme poverty in half (UN 2014). Still, a billion people continue to live below the $1.25-a-day line, and achieving the “last mile” in eradicating poverty will require a different set of instruments, institutions, and policy regimes than has been commonly used.

This chapter argues that, although much progress against extreme poverty in low- and middle-income countries has been accomplished through so-called inclusive growth, the elimination of consumption-based poverty will require greater attention to the political economy of social protection in developing nations. Since the 1990s, increases in labor-based income have been responsible for most of the achievement in poverty reduction. But for the large middle- income countries (where most of the world’s extreme poor currently live), evidence suggests that the effect of labor income on consumption will hereafter diminish considerably, with the poorest individuals remaining vulnerable to a variety of shocks, thus requiring a more effective social floor below which they cannot fall. In middle-income countries, it may be that growth has lifted all the poor out of extreme poverty who can be lifted; for the rest, social policy will be needed.

What kind of social policy mix is needed? While it is technically possible to devise precise, leakage-free, redistributive mechanisms that can raise consumption among the extreme poor and protect those on the edge of poverty, the political reality is that critical support among the nonpoor for these types of schemes is the lowest where it is needed most, namely, in countries with large populations of extreme poor. Consequently, if these countries continue their typical policy mix of “inclusive” growth strategies combined with targeted transfer programs, movement along the last mile will be slow. Instead, the last mile in poverty reduction is more likely to be sustainable through comprehensive, even universal, social policies in which the nonpoor are included.

By 2030, however, most of the world’s extreme poor will live in fragile states, many of which are low-income countries. In these countries, of course, there remains much mileage to be gained from growth. However, reforms to social policies in these countries also have their place. Here the challenge is to weave together the various strands of highly fragmentary antipoverty programs into more uniform, effective systems of social protection that preserve cohesion.

Much of this chapter draws upon the history of poverty reduction and social policy reform in advanced, industrialized economies. Of course, countries in the developing world have followed different trajectories—with respect to the timing of industrialization, reliance on service sectors, and the role of the state in the economy in the context of postcolonial development. This chapter argues, however, that the mechanisms by which extreme poverty was reduced in richer countries when those countries were much poorer—through “welfare states” financed through a tax system in which all citizens held a stake, but that also reduced the multiple vulnerabilities faced by the poor—apply with equal force in developing countries today. From Brazil to India to sub-Saharan Africa one already sees hints of these historic forces at work: a long-undermined commitment to the tax system; middle-class resentments against corruption and poor service delivery; and a political awakening that has upended long-lived alliances between ruling elites and particular constituencies in which the middle classes are sidelined. Indeed, the process of welfare-state building—much like state building itself—has not been a peaceful one. In Western Europe and in the United States in the nineteenth and early twentieth centuries, it was characterized by social unrest, political extremism, and economic turmoil. Whether countries where the extreme poor live can develop durable institutions of social protection will depend on a number of factors, including the broader macroeconomic environment, the effect of globalization on the types of risks countries face, the establishment of domestic political alliances between the poor and the nonpoor, and the ability of aid recipients to temper the strong preference for targeting among the donor community.

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“The Earth in the coming decades could cease to be a ‘safe operating space’ for human beings,” concludes a paper by 18 researchers “trying to gauge the breaking points in the natural world,” published in Science in January 2015. That our planetary environment seems to be approaching “breaking points” is but one of several systemic threats looming on the horizon or lurking under the surface.

Since the economic crisis in 2008, the world has learned that financial instability is a global threat to sustainable livelihoods and economic progress. The underlying dynamics of technological change seem to be more labor displacing than labor absorbing, creating increasing anxiety that employment and career trajectories are permanently threatened. These two challenges undermine public confidence in the market economy, in institutions, and in political leaders. They constitute systemic threats to the credibility of markets and democracy to generate socially and politically sustainable outcomes for societies.

The fact that one billion people still live in extreme poverty, that there are scores of countries that are considered to be “failed states,” and that genocide, virulent violence, and terrorism are fed by this human condition of extreme deprivation together constitute a social systemic threat, global in scope. These challenges together merge with a growing public awareness of global inequality between nations and of increasing inequality within nations. The power of money in public life, whether in the form of overt corruption or covert influence, disenfranchises ordinary people and feeds anger and distrust of the current economic system. 

These challenges are global in reach, systemic in scale, and urgent. They require deliberate decisions to abandon “business-as-usual” approaches, to rethink current practices and engage in actions to transform the underlying fundamentals in order to avoid the collapse and catastrophe of systems that average people depend upon for normal life.  

Systemic risks are real. Generating new pathways to systemic sustainability are the new imperatives. Holistic approaches are essential, since the economic, social, environmental, and political elements of systemic risk are interrelated.  “Sustainable development,” once the label for environmentally sensitive development paths for developing countries, is now the new imperative for systemic sustainability for the global community as a whole.

2015 is a pivotal year for global transformation. Three major work streams among all nations are going forward this year under the auspices of the United Nations to develop goals, financing, and frameworks for the “post-2015 Sustainable Development Agenda.”  First, in New York in September—after two years of wide-ranging consultation—the U.N. General Assembly will endorse a new set of global development goals to be achieved by 2030, to build upon and replace the Millennium Development Goals (MDGs) that culminate this year. Second, to support this effort, a Financing for Development (FFD) conference took place in July in Addis Ababa, Ethiopia, to identify innovative ways to mobilize private and public resources for the massive investments necessary to achieve the new goals. And third, in Paris in December, the final negotiating session will complete work on a global climate change framework.  

These three landmark summits will, with luck, provide the broad strategic vision, the specific goals, and the financing for addressing the full range of systemic threats.  Most of all, these events, along with the G-20 summit of leaders of the major economies in November in Antalya, Turkey, will mobilize the relevant stakeholders and actors crucial for implementing the post-2015 agenda—governments, international organizations, business, finance, civil society, and parliaments—into a concerted effort to achieve transformational outcomes. Achieving systemic sustainability is a comprehensive, inclusive effort requiring all actors and all countries to be engaged. [3]

Four major elements need to be in place for this process to become a real instrument for achieving systemic sustainability across the board. 

First, because everyone everywhere faces systemic threats, the response needs to be universal. The post-2015 agenda must be seen as involving advanced industrial countries, emerging market economies, and developing nations. Systemic sustainability is not a development agenda limited to developing countries, nor just a project to eradicate poverty, nor just an agenda for development cooperation and foreign aid. It is a high policy agenda for all countries that goes to the core of economics, governance, and society, addressing fundamental dynamics in finance, energy, employment, equity, growth, governance, and institutions.

Second, systemic threats are generated because of spillover effects from activities that used to be considered self-contained and circumscribed in their impact. The world of silos and vertical self-sufficiency has given way to an integrated world in which horizontal linkages are as important as vertical specialization. The result of these interlinkages is that synergies can be realized by taking comprehensive integrated approaches to major issues. In this new context, positive-sum benefits are potentially more easily realized, but integrated strategies are necessary for doing so. 

This new context of spillovers and synergies has two implications. The domestic dimension is that whole-of-government approaches are necessary for addressing systemic sustainability. Cross-sectoral, inter-ministerial approaches are essential.  Since markets alone are not able to realize optimal outcomes in the widespread presence of externalities, the only way to realize the positive sum potential of synergies is through coordination among related actors. On the international dimension, this new context also requires more cooperation and coordination than competition to realize synergistic, positive-sum outcomes.

Third, domestic political pressures are primary. This may be a variant of the old saying that “all politics is local.”  However, the aftermath of the 2008 global financial crisis has been a world of hurt in which impacted publics are feeling anger and alienation from an economic system that has threatened their jobs, incomes, pensions, homes, and livelihoods. The task of leaders is not to pander to these plights but to lead their people to understand the vital linkage between domestic conditions and external forces and the degree to which the global context inevitably impacts on domestic conditions. Leaders need to be able to explain to their people that systemic threats have inextricable global–domestic linkages that need to be managed, not ignored.

Fourth, given all this, it is absolutely necessary that the global system of international institutions be “on the same page,” share the same vision, strategy, and goals, rather than each taking its primary mandate as a writ for independence from the common agenda. 

The major challenges for global governance in this pivotal turn from goal-setting in 2015 to the beginning of implementation in 2016 are to ensure (i) that all countries adapt and adopt the post-2015 agenda in ways that are congruent with their national culture and context while at the same time committing to reporting on all aspects of the agenda; (ii) that whole-of-government institutional mechanisms and processes are put in place domestically to realize the synergies that can accrue only from comprehensive, integrated approaches and that international cooperation mechanisms gain greater traction to reap the positive-sum outcomes from global consultation, coordination, and cooperation;  (iii) that national political leaders learn new modes of domestic and international leadership that are capable of articulating the new context and new systemic risks that need to be managed both internally and globally; and (iv) that each international institution realizes the need to be part of a system-wide global effort to achieve systemic sustainability through concerted efforts of all relevant actors working together on behalf of a common global agenda. [2]

Currently under discussion are 17 Sustainable Development Goals (SDGs) and 169 indicators for 2030 to extend and replace the eight MDGs for 2015, which had 21 targets and a variety of indicators, which in turn extended and replaced seven International Development Goals (IDGs) agreed to in 1995 by development cooperation ministers from OECD countries. There is much chatter now about whether the SDGs and indicators are too many, too ambitious, and too widespread.  The Economist asserts that the SDGs “would be worse than useless,” dubbing them “stupid development goals”. And Charles Kenney at the Center for Global Development in a thoughtful piece argues that “we lost the plot.” 

It may be true that there is too much detail. Two previous efforts, one by the Centre for International Governance Innovation (CIGI) and the Korean Development Institute (KDI) had 10 goals, and the other, the U.N. High Level Panel of Eminent Persons report in 2013 had 12 goals.[iii] This quibble alone does not prevent the use of political imagination to conjure a storyline that connects the 17 proposed SDGs with the vision of the post-2015 Sustainable Development Agenda as addressing systemic threats and having comprehensive integrated strategies for addressing them. 

Fourteen of the 17 SDGs can be clustered into four overarching strategic components: poverty (2); access (6); sustainability (5); and partnership (1). The other three goals have to do with growth and governance (institutions), which were underpinnings for both the IDGs and the MDGs though not embodied in the sets of goals themselves. The four SDG components seamlessly continue the storyline of the IDGs and the MDGs, both of which included poverty as the first goal, gender equality- education-and-health as issues of access, an environmental sustainability goal, and (in the MDGs) a partnership goal. The two underpinning components of growth and governance remain crucial and, if anything, are still more important today than 20 years ago when the global goal-setting process began. 

Continuity of strategic direction in transformational change is an asset, ensuring persistence and staying power until the goal is fulfilled.

The SDGs now convey a sense of the scale and scope of systemic threats. The sustainability goals (goals 11 through 15) highlight the environmental threats from urbanization, over-consumption/production, climate change, destruction of ocean life, to ecosystems, forests, deserts, land, and biodiversity. No knowledgeable person would leave out any of these issues when considering threats to environmental sustainability. 

The fact that goal 10, to “reduce inequality within and among countries,” is on the list of SDGs signals a new fact of political life that inequality is now front-and-center on the political agenda globally and nationally in many countries, advanced, emerging, and developing. This goal is really the “chapeaux” for goals 3 through 7, which deal with health, education, gender, water and sanitation, and energy for all—the access goals that must be met to “reduce inequality within and among countries.” It is inconceivable that a group of global goals for a sustainable future in the 21st century would leave out any of these goals crucial for achieving social sustainability, and undoubtedly political sustainability as well. 

Reducing inequality is not an end in itself but a means of providing skills and livelihoods for people in a knowledge-based global economy and hence the social and political sustainability required for stable growth. Growth is both a means and an end.

The two poverty goals are now more ambitious and inclusive than earlier. “Ending poverty” is different from reducing it, as in the IDGs and MDGs. And “ending hunger” through food security, nutrition, and sustainable agriculture are means to the end of eliminating poverty. For the Economist, eliminating extreme poverty should be the most important goal, stating that “it would have a much better chance of being achieved if it stood at the head of a very short list.”

This observation would apply if the SDGs are again intended to be, as the IDGs and MDGs were previously, development goals for developing countries. But development for developing countries is not the primary thrust and drive of the post-2015 agenda taken as a whole.  

The world is now facing systemic risks that threaten unacceptable collapse in social, political, economic, and environmental systems. A global community under threat from systemic risks needs a strategic vision and a pathway forward with specific guideposts, benchmarks, and means of implementation. 

The SDGs, the FFD documents and the U.N. Framework Convention on Climate Change accords will not be perfect. But, the three U.N. processes in 2015 capture the main elements, attempt to get specific in terms of priority actions and accountability, and together will provide a vision for the future for achieving systemic sustainability in its multiple, interconnected dimensions.

To think that simplifying the wording is going to simplify the problems is illusory. To narrow the vision to poor countries and poor people is to misunderstand the systemic nature of the threats and the scope and scale of them. 

This is a global agenda for all. Partnership now means we are all in the same boat, no longer acting on a global North-South axis of donor and recipient. Without the participation of all nations, all stakeholders, and all the international institutions, actual transformation will fall short of necessary transformation, and the world will reach breaking points that will inflict pain, suffering, and high costs on everyone in the future. The post-2015 Sustainable Development Agenda for 2030 brings an awareness of the future into the present and makes us understand that the time for action is now. 

Endnotes:

[1] For an example of a recent multistakeholder interactive conference on this set of issues, review the related report on the Brookings-Finland private meeting on March 30, 2015 on “implementing the post 2015 sustainable development agenda.

[2] See “Action Implications of Focusing Now on the Implementation of the post-2015 Agenda,” which outlines in more detail the key elements of implementation that need to be set in motion during 2015 and 2016, emphasizing especially roles for the Turkey G-20 summit in 2015 and the China G-20 summit in 2016.  

The consequences of the global financial crisis still ripple through the international system after the initial surge in global economic cooperation and governance immediately following the crisis. The ultimate effects have been that, while some elements of the international system of institutions have gotten stronger, the system as a whole is now seen as weaker, fractured, and driven more by geopolitical conflict than by institutional norms and frameworks.

The issue is how to move the global policy agenda forward in such a way that substantive progress induces institutional strengthening. The next two years offer new opportunities for creating a positive symbiosis between policy advance and systemic improvements.

I. The U.N. global agenda

The United Nations global agenda has three tracks that relate to each other and provide opportunities to pull the world together around an integrated, comprehensive strategic vision for the world’s people and strengthen the international system in the process.

The first track is the elaboration of a sustainable development agenda for each and all countries, not just developing countries, but advanced industrial economies and emerging market countries too. This effort is already well underway and will result in a summit of global leaders in September 2015 at the U.N. General Assembly (UNGA) in New York. This process entails a set of Sustainable Development Goals (SDGs) for 2030 to be developed and affirmed by and for all countries, and which succeed the Millennium Development Goals (MDGs) that culminate in 2015 and applied only to developing countries. This post-2015 goal-setting process will provide the substantive, cross-cutting, multidimensional agenda for the next 15 years. It is simultaneously a social, economic, and environmental agenda that relates goals to each other in functional terms requiring coordination among public and private sectors, ministries, civil society groups, and international institutions.

The second track is the financing for development (FFD) track, which goes well beyond reliance conceptually and practically on foreign aid or official development assistance as in the past. FFD for the SDGs includes a focus, first and foremost, on domestic sources of finance beyond government revenues. FFD is engaged in searches for innovative sources of finance, private sector mobilization of resources, creative market incentives and mechanisms, initiatives by civil society organizations, and development of entrepreneurial and small- and medium-size business opportunities that address global issues. This effort resulted in a global leaders meeting in Addis Ababa, Ethiopia in July of 2015 that reached agreement on the major thrusts for mobilizing resources for the post-2015 agenda (Kharas and MacArthur (2014)).

The third track is the global climate change negotiations currently under way to achieve a global agreement on the United Nations Framework Climate Change Convention (UNFCCC), which will result in a global summit in Paris in December of 2015. While these detailed negotiations on climate are a separate track, it is clear that the sustainable human development trajectories being put forward in the post-2015 agenda impact and are crucially affected by the efficacy of the climate change arrangements worked out in the UNFCCC agreements in 2015.

Whereas these three tracks operationally are going forward separately, the substantive aspects of each track affect and are affected by the content of the other two. The ultimate convergence of these three streams of activities and actions will have to occur in the beginning of 2016 at the global, regional, and national levels if the implementation phase is to be successful. A business-as-usual approach will not be satisfactory if at the global level, for example, the international institutions are unable to coordinate their work, or if at the national level ministries remain within their “silos” of sectoral expertise and responsibility.

Synergies exist between goal areas that cannot be realized without coordination across sectors and institutions, impacting goal achievement (see OECD 2014 PCD). A systemic approach is necessary at all levels to address the global challenges identified in the post-2015 agenda.

II. The G-20 summits for 2015 and 2016

A major opportunity presents itself in terms of providing impetus, momentum, and leadership for these large work streams and their convergence by linking the G-20 presidency of Turkey for 2015 with the G-20 leadership of China in 2016. Turkey and China working together in tandem within the G-20 Troika over the next two years to explain, support, and sustain the mobilization effort toward the post-2015 agenda could be a major contribution to it but also strengthen the global system of international institutions in the process. For the Turkish G-20 summit, scheduled to take place in November 2015 in Antalya, between UNGA in New York in September and the UNFCCC in Paris in December, Turkey could use part of its G-20 summit to have the leaders of the world’s largest advanced and emerging market economies explain to the world the nature, importance, and relevance of the SDGs to domestic concerns and priorities of ordinary people.

A weakness of G-20 summits thus far has been that G-20 leaders have become trapped by finance ministers’ issues and discourse and have failed to connect with their publics on larger issues of direct concern to people everywhere. The post-2015 agenda provides an opportunity for G-20 leaders to lead their people in understanding how global efforts relate to domestic conditions and why dealing only domestically with issues will not suffice to advance the human agenda where the global interface is extremely palpable. G-20 leaders, under Turkey’s leadership, could step out beyond the technical jargon of finance ministries and central banks, as important as those issues continue to be, and directly address the longer-term, fundamental conditions that affect the lives and livelihoods of all people. They would thereby strengthen their own leadership profile internally by explaining the global dimensions of domestic issues as means of creating public support for the sustainability issues in the post-2015 agenda.

Past experience with the International Development Goals (IDGs) of the 1990s and the Millennium Development Goals since the early 2000s  demonstrates that linking the goal-setting effort to the implementation phase yields powerful results by capturing the political momentum of the goal setting phase and carrying that energy forward directly into implementation efforts. If Turkey and China were to work together in 2015 and 2016, thereby bridging the goal-setting year in 2015 to the beginning of the implementation phase in 2016, they could provide the catalytic leadership and continuity that would maximize the staying power of the momentum from one phase to the next.

China, for its G-20 summit preparations in 2016, could focus on developing a road map, in concert with the other countries and international organizations and especially with the United Nations, that would explicitly keep alive the activities, groups, and initiatives manifested in the goal-setting phase into the next phase of implementation beginning in 2016. These combined efforts by Turkey and China could jump-start societies focusing on accelerating efforts to transform their societies by mobilizing policies and resources for highly related goal areas of direct benefit to their people.

The immediate effects of coordinated sequential efforts by Turkey and China in their respective G-20 years to advance the post-2015 agenda would be to strengthen the relationship between the G-20 and the United Nations on the agenda itself and to strengthen the G-20 summits by having leaders lead on issues of central concern to their people, strengthening the G-20 as a leadership forum in the process. For these results to occur, Turkey and China would need to begin to work together now to develop concordance in their individual efforts and initiate activities that would benefit greatly by beginning now and running through 2016 and beyond.

Accelerating implementation: Several initiatives could be undertaken now that would set up the dynamics for accelerated implementation in 2016 and beyond.

• National strategies for achieving the SDGs: Encourage countries to adapt and adopt the SDGs to their respective priorities and social, political, and cultural contexts through deliberate decision processes and wide societal engagement.
• The role of parliaments: Bring parliamentarians and parliaments into the goal-setting process so that they are aware of the legislative, regulatory, and budgetary implications of the post-2015 agenda.
• The role of domestic ministries: Bring finance ministers and other domestic ministries and agencies together with foreign ministers in the goal-setting year to set in motion mutually involved functional relationships and operational guidelines to enhance implementation across sectors.
• The G-20 as broker and mobilizer: The G-20 could act as a broker between the International Monetary Fund (IMF), World Bank, World Trade Organization (WTO), Organization for Economic Cooperation and Development (OECD), and regional development banks and the U.N. and its agencies to assure not just coordination but more intensive interactions that would be designed to accelerate the mobilization of resources and as well as policies and private sector activities that would enhance implementation.
• The policy role of the OECD: The strong, substantive role of the OECD in G-20 summits on issues high on the G-20 agenda—such as structural reform, tax base erosion, development, environment, energy, employment, and social issues—position the OECD to continue to provide important substantive inputs to the G-20 in 2015 and 2016. The OECD would enhance the relationship of its 34 members with G-20 emerging market economies by OECD involvement in both the G-20 and the U.N. post-2015 agenda.
• Financial stability and the SDGs: Encouraged by the G-20 summits, the IMF, the Financial Stability Board, and the OECD could work together to integrate the financial regulatory reform agenda into the post-2015 U.N. process by clarifying the linkages between financial stability, regulatory reform, and incentives for long-term private investment in infrastructure (crucial to all the SDGs) and in productive activities which generate greater employment and growth.
• Multi-stakeholder participation in implementation: G-20 summits can facilitate multi-stakeholder processes for engaging civil society, labor, private sector, religious, academic, and expert communities not only in the G-20 summits, as is the current practice, but also in the post-2015 agenda and its implementation, connecting societal leaders with the SDG agenda.

III. The overarching importance of a single global agenda

If these efforts to bring together a wide cross-section of domestic and international agencies, public and private sector leaders, stakeholders, and civil society actors are to translate into actions that are meaningful to the lives and livelihoods of people, a single set of goals is essential. The lesson learned from the IDG-MDG experience was that the tendency to differentiate roles by identifying different institutions with different sets of goals was real. The United Nations had inadvertently put forward the Millennium Declaration at the September 2000 U.N. General Assembly that had “millennium targets” which were similar but not identical to the International Development Goals (IDGs). The IDGs had been developed in the mid-1990s by OECD development ministers and subsequently were endorsed by the World Bank, the IMF, the U.N. and the OECD. In fact, in 2000, for the first time ever, the heads of those four institutions signed, and the institutions themselves published, a joint report, A Better World For All: Progress towards the International Development Goals.

Despite the appearance of unity and in part because there was a lack of concordance between the Millennium Declaration Targets (MDTs) and the IDGs, there was a moment in March 2001 when it looked like there might be a decisive divergence between the U.N. and the Bretton Woods institutions, with the U.N. taking the lead on the MDTs and the World Bank and IMF taking the lead on the Poverty Reduction Strategy Process (PRSPs), leaving the IDGs marginalized altogether. This potential division of labor was thwarted by a decision to reconcile the differences between the MDTs and the IDGs by forging the Millennium Development Goals (MDGs), which embodied the principal elements of both. The MDGs surfaced and were endorsed by the Monterrey Summit on Financing for Development in March of 2002, keeping the major global institutions on the same page with bilateral donors and the same path moving toward achieving the MDGs in 2015.

Most people who know about the MDGs think their origins began at the U.N. in the year 2000. It is an often overlooked fact that the MDGs only came forward in 2002 to bridge the potential divide between the Bretton Woods institutions and the United Nations. If that divide had occurred, it would have been disastrous from a goal setting-goal implementation point-of-view. This history is quite important to bring forward into public light now because it illustrates divisive dangers that currently lurk under the surface threatening unity if not squarely addressed.

From the perspective of prioritizing implementation, the truth is that multiple sets of goals blur the strategic vision, fail to communicate direction, weaken effective leadership, and encourage special pleading for differentiated interests instead focusing on the common, public interest. The U.N. has the lead role in global goal setting and has strengthened its own role in the global system in recent years. However, looking forward now to the SDG implementation phase, a danger might be that the Post-2015 agenda could be seen as the creature and captive of the United Nations, whereas it must be fully endorsed and internalized within the global system of international institutions as a whole. For that to happen, it would be necessary to move now, during the goal-setting year, to include all the relevant international and domestic actors that are crucial to the implementation phase of the post-2015 agenda.

The implications of including the post-2015 agenda in the G-20 summits in 2015 and 2016:

• It would make clear to relevant publics and actors that this set of global goals is universal, applicable to advanced countries, emerging market economies, and developing countries; it is not a “development agenda” but a “sustainability agenda,” which is broader, more strategic, and higher on the policy agenda of most countries.
• It would make clear the inextricable dynamics between domestic priorities and global goals; the SDGs are not foreign policy objectives or aid targets for development; they are domestic priorities affected by global impacts and generating global spillovers that need to be managed, not neglected.
• It would make the incorporation of finance ministers and domestic ministers with foreign ministers, along with international institutions, an imperative, rather than a utopian, ideal.
• It would make obvious the need to have a wide range of international institutions dealing with health, labor, education, women, climate, and the environment on the same page with the United Nations and the Bretton Woods institutions working together toward the SDGs.
• It would link the need for multi-stakeholder participation in goal setting to the goal implementation phase to mobilize support, policies, and resources but also to reveal and work on the interconnectedness of the goals themselves taken as a whole. 

Hence, the critical imperative is that there be a single narrative, a single set of goals, for all the domestic and global players to relate to, affirm, and implement. Otherwise, a fractured global order will produce lower-yield outcomes, and competition among priorities, sectors, and actors will result in poorer goal performance than would be possible with an integrated, concerted approach where all actors are working toward the same ends.

IV. Possible G-20 Actions by Turkey and China

Turkey has developed a process for the G-20 summit scheduled for November 14-15, 2015 in Antalya. Implementation, inclusion, and investment—the three “I’s”—are the overarching themes already established. The three “I’s” ties are tightly tied to the Australian G-20 outcomes—implementing action plans to achieve the incremental growth target of an additional 2 percentage points of GDP by 2018; including lower-income people in growth and lower-income countries in the global economy; and investing in infrastructure.

Each of these priorities is supportive of and compatible with the post-2015 agenda, even though they are not yet directly addressed to it. A decision by Turkey to include the post-2015 agenda in the 2015 G-20 would be easily achieved by cross-walking the SDGs over to and into the three “I’s” and vice versa. The central priority of the post-2015 agenda is, after all, “implementation.” The overarching meaning of the six elements of the post-2015 agenda (dignity, prosperity, justice, partnership, planet, and people (U.N. SG Synthesis Report December 2014)) is their impact on “inclusion.” And “investment” in infrastructure is crucial to all of the 17 SDGs.

The three pillars for Turkey’s 2015 agenda are: (i) strengthening the global recovery and lifting potential growth (the 2 percent target); (ii) enhancing resilience (financial regulatory reform]; and (iii) buttressing sustainability. Clearly, the third pillar on sustainability opens the door for the incorporation of the post-2015 agenda into the Turkey G-20, if Turkey wishes to do so. And the other two pillars fully support the sustainability agenda and are linked to it, or need to be.

For China, the post-2015 agenda presents a unique opportunity for the Chinese government to seize on a global agenda that has specific, strong, and visible links to the domestic concerns of the Chinese people. China could use the 2016 G-20 summit both to provide international leadership for global cooperation and to demonstrate the connection of global issues to domestic conditions through their impact and spillover effects. Because the post-2015 agenda is a universal agenda, by prioritizing it in its G-20 summit, China would be embracing the multiplicity of its own identity as a developing country but also as a dynamic emerging market economy that is destined to eventually play a global leadership role equivalent to advanced countries.

Furthermore, China seems intent on being a competitive nation in various spheres while at the same time being cooperative in others. The G-20 summit presidency for China in 2016 provides China with an opportunity to strengthen its role in international cooperation by being ambitious in the reach of its agenda for the G-20 in 2016, by its conduct as a member of the G-20 Troika for the next three years, and as the host government for the G-20 in 2016. By choosing to support Turkey in its consideration of incorporating the post-2015 agenda in the G-20 summit in 2015 and by China itself addressing the implementation issues in 2016, China would be reaping the demonstrably higher-yield gains generated by linking the SDG goal-setting phase in 2015 to the implementation phase in 2016.

Integrating the three tracks of SDG goal setting, financing for development, and progress on climate change actions is complementary but complex. While challenging, China has sufficiently high stakes in the outcomes of all three of these tracks to have a national interest in leading a global effort over the next three years to energize the convergence of agendas and institutional mandates necessary to generate bigger outcomes for people everywhere, including in China.

V. Results: Strengthening global governance and leadership

What follows from the analysis here is that the decision to include the post-2015 agenda in the Turkey and China G-20 summits would be a choice about the substance but also about the process of global economic governance, in which the G-20 has a leadership role. To do so in the way outlined here, would:

• Strengthen the global system of international institutions by bringing them together around a single comprehensive, integrated sustainability agenda;
• Create synergies between the United Nations and the other international institutions rather than identifying the post-2015 agenda with the U.N. alone and relying unnecessarily on the U.N. for its implementation;
• Connect G-20 leaders with a broader human and planetary agenda beyond economics and finance, which in turn would connect G-20 leaders with their publics as they visibly address the domestic concerns of their people in their global context; and
• Strengthen the role of the G-20 in global economic governance by putting the G-20 out in front as a broker among stakeholders, a catalytic coordinator of relevant domestic and international actors, and a leader on behalf of the concerns, lives, and livelihoods of people.

Selected References

Colin I. Bradford (2002), “Toward 2015: From Consensus Formation to Implementation of the Millennium Development Goals. Issues for the Future: The Implementation Phase”, Development Economics Department (DEC), The World Bank, December 2002.

Colin I. Bradford (2014), “The Changing World Economy and Global Economic Governance”, power point presentation at the Korean Delegation seminar “The OECD and Global Governance”, OECD, Paris, December 11, 2014.

Colin I. Bradford (2014), “Global Economic Governance and the Role of International Institutions”, Second High-level Policy Forum on Global Governance:  Scoping Papers, UNDP Beijing China, 22 October 2014.

Colin I. Bradford (2015), “Governance Innovations for Implementing the Post-2015 Sustainable Development Agenda: Conference Report”,  Brookings Institution, Washington, D.C., March 30, 2015.  http://www.brookings.edu/~/media/Events/2015/03/30-post-2015-sustainable-development-agenda/330-PostReportFinal.pdf?la=en   

Ye Yu, Xue Lei and Zha Xiaogang (2014), “The Role of Developing Countries in Global Economic Governance---with a Special Analysis on China’s Role”, Second High-level Policy Forum on Global Governance:  Scoping Papers, UNDP Beijing China, 22 October 2014. Authors are from the Shanghai Institutes of International Studies.

Homi Kharas and John McArthur (2014), “Nine Priority Commitments to be Made at the UN’s July 2015 Financing for Development Conference in Addis Ababa, Ethiopia,” October 2014. http://www.brookings.edu/research/papers/2015/02/united-nations-financing-for-development-kharas-mcarthur

OECD (2014), “Policy Coherence for Development and the Sustainable Development Goals”, Paris: OECD, 10 December 2014, prepared for the 8^th Meeting of the National Focal Points for Policy Coherence for Development (PCD) held at the OECD on 17-18 December 2014. 

The Addis Ababa Action Agenda reaffirms the central role of development banks in providing concessional and non-concessional long-term financing, countercyclical financing, guarantees and leverage, policy advice, capacity building, and other support to the post-2015 agenda. "We recognize the significant potential of multilateral development banks and other international development banks in financing sustainable development and providing know-how. … We stress that development banks should make optimal use of their resources and balance sheets, consistent with maintaining their financial integrity, and should update and develop their policies in support of the post-2015 development agenda, including the sustainable development goals (SDGs)."

This paper argues that the Addis Action plan and the SDGs represent a milestone in the changed thinking about the role of the multilateral development banks (MDBs) and the World Bank Group (WBG) in particular. By elaborating on a universal agenda for sustainable development, rather than a narrow focus on reducing poverty, the scope and ambition of support needed by low and middle-income countries has widened substantially. This paper looks at how the WBG might respond to these new challenges.

The SDGs cover a far broader scope than the Millennium Development Goals, and represent, in many ways, a validation of what the WBG has been doing for many years. The Addis Ababa Action Agenda for the third U.N. financing for development conference shows why:

• It puts the responsibility for development squarely on countries themselves; "Cohesive nationally owned sustainable development strategies, supported by integrated national financing frameworks, will be at the heart of our efforts." The role of development agencies, in this view, is to support country-led processes, not replace them. This favors organizations like the World Bank Group with country-based operational structures and strong country presence, compared to, for example, vertical funds that have a global thematic focus but weaker country footprints.
   
• It gives prominence to "blended finance" and the leveraging of grants and other support with money raised on private capital markets. The Bank has always done this, with particular success in partnering with the Global Environment Facility (GEF), various climate trust funds, the Global Partnership for Education, and the Global Agriculture and Food Security Program.
   
• It calls for multifaceted interventions. The WBG’s credits and loans have typically been accompanied by capacity building, technical assistance, evaluation, policy reform, and other elements of a package of interventions that are needed to have an impact. This is now recognized as how development must be done.
   
• It promotes risk-mitigation mechanisms; the WBG’s Multilateral Investment Guarantee Agency (MIGA) is the largest provider of these instruments in the world and is expressly recognized in the Addis document; the International Bank for Reconstruction and Development (IBRD) too has the ability to provide guarantees, although actual use of this instrument has been limited.
   
• It brings private business to the center of development; “foreign direct investment [is a] vital complement to national development efforts.” The International Finance Corporation (IFC) is by far the largest official lender to private business; IBRD and International Development Association (IDA) provide help with improving the investment climate.
   
• It emphasizes the importance of delivery of public social services (“a new global social compact”), infrastructure, sound policies and institutions, and good governance, all areas that the WBG has emphasized for some time.
   
• It recognizes that “countries in conflict and post-conflict situations also need special attention.” The WBG was one of the earliest development organizations to specifically focus on this issue, applying recommendations of a 2002 Task Force report.

Internally, the WBG has reorganized itself into global practices that match well with the SDGs, and has articulated “Twin Goals” to end poverty by 2030 and to boost shared prosperity for the bottom 40 percent of the population in each country. These goals in turn resonate with the ambition of the SDGs to end poverty and hunger and to promote peaceful and inclusive societies.

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This weekend, more than 150 world leaders will gather at U.N. headquarters to adopt the Sustainable Development Goals (SDGs) for 2030. In the lead-up to the summit, many independent analysts are taking stock of the Millennium Development Goals (MDGs), the global guide star for anti-poverty efforts over the period from 2000 to 2015. Several of them, including journalists, have been asking me whether any MDG success stories exist to help inform the new global goals. 

In my view, there are three key parts to answering this question. First, we can point to roughly 15 million success stories, measured in lives saved. Second, these victories are global, but the majority have taken shape in sub-Saharan Africa. Third, in order to understand the nature of the successes since 2000, we need to look beneath the crucial but ultimately crude benchmarks of MDG target achievement.

In their annual progress reports, organizations like the U.N. have historically focused on presenting the absolute levels of change. For example, they might compare the number of children who die in one year with the number who die in a later year, and count the difference as the measure of the world’s success. A different way to measure success is to look at pre-existing trends and search for accelerations in the rate of progress. Last year I published such a study, estimating the incremental number of children’s lives saved due to accelerated improvements in child survival since the launch of the MDGs.  

The methodology estimates the number of incremental lives saved under two counterfactual scenarios for children under-5 mortality rates (U5MR). “Counterfactual A” extrapolates each country’s average annual rate of progress from 1990 to 2000, and extends the same trend to the most recent year (in 2014 the U.N. provided data through to 2013). “Counterfactual B” is more conservative, and extrapolates the rates of progress from 1996 to 2001, recognizing that the early 1990s were worse than the late 1990s for many countries, and also that global MDG policy efforts only really started to get off the ground in 2002. 

Earlier this month, the U.N. released new estimates of all countries’ under-5 mortality rates for both 2014 and 2015, in addition to revised estimates for many countries over earlier years. The new data allowed me to update the “lives saved” estimates accordingly.  All numbers should still be considered preliminary, in light of ongoing revisions to the underlying data, plus the fact that the year of 2015 is not even yet behind us. Nonetheless, Figure 1 shows the core results, and how the world has been “bending the curve” downward on child deaths.

Under Counterfactual A, using rates of progress from 1990-2000:

• 17.3 million more children under-5 are alive today than would have been otherwise;

• Overall U5MR for developing countries would have been 16 points higher in 2015, at 62 deaths per 1,000 live births rather than 46 per 1,000.

Under Counterfactual B, using rates of progress from 1996-2001:

• 8.8 million more children under-5 are alive today than would have been otherwise;

• Overall U5MR for developing countries would have been 9 points higher in 2015, at 55 deaths per 1,000 live births rather than 46 per 1,000.

Figure 1. Aggregate under-5 deaths, 1990 to 2015 (in millions): Actual vs Counterfactuals A and B

Crucially, it’s not just children under-5 whose lives have been saved since 2000. The next biggest category of lives saved is probably for people with AIDS who now receive life-saving antiretroviral medicine. Back in 2000, there were no international efforts to provide AIDS treatment at a time when 25 million people were estimated to be HIV-infected in Africa alone. Thanks to the successful launch and scale-up of global policies and institutions—especially through the Global Fund to Fight AIDS, TB, and Malaria and the U.S. Presidential Emergency Program for AIDS Relief—an estimated 7.8 million AIDS-related deaths have been averted. Official data do not count exactly how many of the 7.8 million lives are for children under-5, but a back-of-the-envelope calculation suggests it adds up to a few hundred thousand.

Some simple arithmetic shows that, under the most conservative estimates, at least around 15 million people (8.8 million under-5 plus at least 7 million AIDS survivors) and perhaps as many as 25 million people (17.3 million plus at least 7 million) are alive today thanks to dramatically accelerated global efforts since 2000. These efforts have been underwritten, in part, by roughly a tripling of development assistance for health. Each of these lives saved is a global success story.

2. The greatest gains are in Africa.

Many people believe that China and India are responsible for most of the world’s development success stories over the past generation. Figure 2 shows why that simplistic narrative does not hold. At least in terms of child survival—arguably the most objective and resonant measure of development in all corners of the world—sub-Saharan Africa is responsible for the lion’s share of accelerations in progress. Note that even China and India saw accelerations in U5MR declines since 2000, but Africa is responsible for 80 percent of the gains under the more conservative Counterfactual B, and 73 percent under Counterfactual A. 

3. The full story lies deeper than achieving MDG targets.

One of the paradoxes of the MDGs is that many of the countries that have achieved the greatest gains under the MDGs—defined as accelerations in progress—have not actually achieved the MDGs. And many of those accelerations might well be a product of the world’s simple reiteration of the MDGs as policy objectives among countries and their international partners—day after day, month after month, year after year.

Table 1 shows that, under Counterfactual B, only 20 countries are estimated to have been responsible for more than 92 percent of the children under-5 lives saved. Only nine of them, less than half, are estimated to be achieving the MDG target of a two-thirds reduction in U5MR between 1990 and 2015.  While again stressing the importance of not interpreting these preliminary figures with any false precision, it is noteworthy that the two countries with the largest estimates of incremental lives saved, Nigeria and India, will both fall short of the MDG target: Nigeria has reduced U5MR by 49 percent since 1990, and India has reduced it by 62 percent.  But both have registered important accelerations in progress since 1996-2001. 

Table 1: Children under-5 lives saved under Counterfactual B (compared to 1996-2001 trajectory)

It is also noteworthy that 18 of the 20 countries in Table 1 are in sub-Saharan Africa. Nigeria is especially notable at the top, since it has been such a prominent MDG proponent. In 2005 the country achieved a major debt relief deal, negotiated by then-finance minister Ngozi Okonjo-Iweala, on the condition that the savings would be allocated towards domestic MDG investments. Amina J Mohammed was given a senior ministerial-level role, as senior special assistant to the president on the MDGs, to figure out how to translate the resources into results on the ground. The MDGs for education and health framed the core of the task for her and many other senior government leaders. Ms. Mohammed held the MDG role for a previously-unheard-of tenure spanning three successive presidents, prior to being appointed, in 2012, as the U.N. secretary-general’s special advisor to help coordinate the global post-2015 goal-setting process. 

Can success beget success?

The new SDG agenda is daunting in its scope and ambition. It is also of critical importance. As the world approaches the relevant complexities, we should heed the experience of people like Ms. Mohammed and so many of her colleagues across Nigeria, and indeed around Africa and the rest of the globe. They confronted business-as-usual to develop new pathways to success in many of the places where it was least expected. In doing so, they have provided us all with millions of success stories to draw from. As we look at the challenges to 2030 and beyond, we undoubtedly need countless millions more.