Who foots the bill after 2015? What new trends in development finance mean for the post-MDGs
This paper examines trends in development finance flows and their implications for efforts to reach agreement on a post-2015 framework. The financing model underpinning the original Millennium Development Goals (MDGs) focused largely on domestic resource mobilisation and official development assistance (ODA). The implicit underlying assumption was that, when countries were unable to mobilise sufficient domestic resources to finance progress towards the MDGs, the gap should be filled either with ODA or through debt cancellation. This implicit assumption about burden sharing underpinned the 2005 Gleneagles Commitment to increase aid and cancel multilateral debt.
The current development finance landscape is very different. Traditional ODA is under pressure. Actors in development finance are mushrooming, including non-Development Assistance Committee (DAC) donors, philanthropists and providers of climate finance. Middleincome countries (MICs) continue to rely heavily on cross-border private financial flows and are
finding it increasingly easy to do so.