How to do more with the resources we have for global development

This summer, the UN agreed on the final text of the outcome document for the long-awaited 4th Financing for Development Conference. With a challenging geopolitical context and a turbulent six months in the development sector, many participants took a glass half-full approach in noting the document was stronger than anticipated, and that an outcome was still agreed.

The reality is that reaching the SDGs in practice still faces considerable headwinds, and there is a shortfall in political will and resources that we can’t ignore. Many participants pointed out the gaps in funding and shortcomings of the text.

The conference focused a lot on big numbers – the hundreds of billions or trillions of funding gap for the SDGs. “We will have to do more with less” was a common and sobering refrain, and many participants felt that it was mission impossible. 

So what’s our take? 

We’ve taken a bit of time to reflect. 

Short answer: 

The negotiated outcome document is not as strong as we would’ve liked, but there is more to work with than we expected. We would argue that, actually, you can do more with less if you know where to look and how to do it. Improving public procurement will be vital to making the most of the resources we do have.

Long answer:

Public procurement represents more than US$13 trillion dollar in public spending. In a context where stakeholders are talking about raising $2.3 trillion, or getting the next $500 billion, that’s a lot of resources already deployable that are notoriously at risk of corruption, mismanagement, or red tape and that could be optimized for stronger development impact and public service delivery.

To unlock that economic engine, we need clear and fair processes to spend that money and better data and information to tell us how we are doing and to track the results. We are not short of examples: procurement reformers have brought down the cost of critical medicines – as much as 80% in some cases, identified price gouging and price fixing schemes on things like school meals, dramatically improved value for money in building school facilities, and increased the number of competing suppliers for a tender, bringing down prices and improving quality.   

The Addis Ababa Action Agenda – the outcome of the 3rd FFD in 2015 – only briefly mentioned procurement once. The mention didn’t recognize the strategic importance of public procurement or its ability to maximize mobilized resources.

The Sevilla outcome document includes procurement three times, better covering its role in delivering sustainable development. Here’s why they matter:

• Transparent, data-driven public procurement 

This mention builds off the one in the AAAA to make sure procurement is data-driven and insights-based. It includes procurement as part of the overall public financial management system linking it to other vital functions.

We would’ve liked to have seen open data here, and the importance of public and community monitoring of government spending to make it stronger yet. It could’ve also been strengthened by giving procurement its own paragraph to highlight its strategic importance as a policy delivery mechanism in its own right rather than a bolt-on or afterthought of public financial management. Budget execution is where real results happen and how the public experiences the success or failure of their tax contributions.

• An emphasis on multilateral development banks investing in country procurement systems

Lots of major development investment projects rely on development bank loans. There is a decision to be made about whether the goods and services for those projects are procured by the banks, or by the national government buyers. In high-risk or complex procurements such as large-scale infrastructure projects in countries lacking reliable procurement systems and know-how, it makes sense to use the procurement systems of the lender. 

But this is not a long-term solution. Countries must build their own procurement systems to manage their own public finances. This means countries need investment in strengthening their own systems and capacity, and gradually be given more of the responsibility for procurement in line with their capacity over time. The latest Independent Evaluation Group report on World Bank procurement recognized this as an important priority, and recent research by the Copenhagen Consensus Center recognized e-procurement as a top 12 investment for the SDGs.

• Including public procurement as a priority digital public good 

There is a lot of emphasis on technology, innovation and data in a broad sense, but it’s vital to get concrete about which technologies, data and use cases really matter for development too. The data related to development needs to be published proactively as open data, to improve public credibility and trust that there is true progress and that the public funds are not just committed or disbursed, but well spent in ways that benefit their lives. 

We were pleased to see that public procurement made the list of digital public goods, and that the science, technology and innovation section included strong mentions of open data and data governance. This aligns with the progress made in Resolution 10/9 to the UN Convention Against Corruption on public procurement and the UN Global Digital Compact. Many of the most promising technologies, including the much anticipated role of AI, heavily rest on having good quality data to deliver on those promises.

If the development community is serious about delivering in practice what has been agreed in principle in the Sevilla outcome document – transparent, data-driven public procurement in domestic country systems as a must-have public good – we can make the $13 trillion we already spend globally through public contracts go a lot further. 

In an age of constrained budgets and low public appetite for big spending, that dual mission is more timely and vital than ever. Just like any business or investment case, the more we can show the value of the money the public is already spending, the more support we will be able to rally to grow that investment.