Radical Simplification? The Leadership of Development Funding

We were privileged to host a dinner for leaders of global development financing organisations. The group ranged across senior leaders of multilateral development banks and UN agencies, to major private philanthropies, corporate foundations, and impact investment.

At a moment of significant disruption for development financing, and international cooperation, need continues to exceed resources. We were struck by the ongoing commitment to meet the challenges of the present, and the range of approaches to do so.

Starting with a discussion of whether “radical simplification” offered a framework for the future of development finance, a lively conversation followed on alternative models. Key themes emerged, which will serve as the basis for future Saxton Bampfylde conversations with leaders across the global development sector, and beyond.

• The “sector” will not return to its previous shape, there is a moment now for institutional and architectural reform. That should be shaped by a “customer” perspective; strategies to alleviate poverty, as opposed to delivering aid; and by country ownership with domestic resource mobilisation.
• There are alternatives to radical simplification, “radical holism”, place- or community-based solutions, developed around whole lives; simplification does not mean that vertical programmes are the only solutions.
• The role of specialised IFIs (or partnerships) remains significant, particularly in their ability to combine aggregated technical expertise with capital, and to develop context-responsive delivery partnerships.
• Solutions need not be radical: there is space for doing the basics well, providing reliable, sustainable partnership.
• Inefficiencies – or missed opportunities – persist in capital pathways between early-stage investors, IFIs, MDBs, and corporate partners, with an opportunity to look again at the role of risk-bearing capital, patient capital, and blended concessional-private finance.
• There are opportunities for shared perspectives on risk, impact data, and financial due diligence to improve these pathways to impact at scale.