A Wish List for 2016 – Nancy Birdsall

Summary

The CGD Podcast: "A Wish List for 2016 – Nancy Birdsall"

Date: January 12, 2016
Host: Rajesh Merchandani, Center for Global Development
Guest: Nancy Birdsall, President of the Center for Global Development

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Overview

This episode centers on Nancy Birdsall’s wish list for international development in 2016. Birdsall and Merchandani reflect on key developments in 2015 and lay out priorities and hopes for smarter, fairer global policies in the new year. The discussion draws on Birdsall’s expertise and CGD’s research, tackling reforms in international institutions, climate policy, inequality, education financing, transparency, and the shifting global order.

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Highlights and Key Discussion Points

Reflections on 2015’s Milestones

• IMF Quota Reform Passes US Congress

  • Long-awaited approval helps stabilize the global financial system, which Birdsall calls indispensable for development prosperity.
  • Quote: “We can't have development if we have instability in the financial system. We learned that in 2008, 9…” (Birdsall, 01:27)

• Paris Climate Conference & Clean Energy R&D

  • Paris seen as a breakthrough for international climate consensus, though Birdsall notes it was "not ideal but...a big step forward." (02:01)
  • Bill Gates’ $2 billion investment in clean energy R&D praised as visionary philanthropy.
  • Steps taken to reduce fuel subsidies in India, Indonesia, Nigeria, which Birdsall calls “a move towards fairness and climate benefit.”
  • Progress in reducing deforestation credited to rich countries funding preservation in forested nations.

• Launch of the Asian Infrastructure Investment Bank (AIIB)

  • Recognized as major new source of development finance, highlighting China’s growing leadership.
  • Better leveraging of resources at the Asian Development Bank through merged balance sheets.

The Sustainable Development Goals (SDGs)

• SDGs celebrated for their broad, universal scope and emphasis on sustainability (environmental and political).
• Birdsall expresses concern about the sheer number of targets (17 goals, 169 targets) and the challenge of measurement and accountability.
• Major wishes for improvement:
  1. Migration: More attention and better metrics for migration’s role in development, citing Michael Clemens’ work and the CGD’s Commitment to Development Index.
     • Quote: “If we don't manage as a world what migration there is better, we are leaving on the sidewalk trillions of dollars in GDP and welfare.” (Birdsall, 07:56)
  2. Inequality: Calls for more concrete measurement using median incomes, noting current approaches are “a little mushy.”
     • Quote: “There's no absolute right amount of equality that economists can endorse, obviously complicated issue.” (Birdsall, 08:50)
     • She notes her “obsession about the median” as a better metric than average GDP per capita. (09:43)

Climate Change: Looking Ahead to 2016

• Hopeful for new and scaled-up carbon pricing mechanisms:
  • California’s Cap and Trade System: Hopes for international cooperation, e.g. with Brazil’s Acre state, to monetize environmental preservation. (09:58)
  • US National Policies: Anticipates Obama administration’s new emissions caps for power plants will drive further cap and trade efforts.
  • China’s Nationwide Cap and Trade Plan: Expected to be fully detailed in 2016 for a 2017 launch.

Education Financing and Outcome-Based Aid

• Gordon Brown’s commission on education finance lauded; Birdsall wishes for a major focus on “outcome based aid.”
• Emphasizes funding must shift from mere enrollment ("butts in seats") to real learning–addressing the "learning crisis" highlighted by CGD fellows such as Lant Pritchett.
  • Quote: “Not just enrollment, but actually are children learning more?” (Birdsall, 13:12)

Transparency and Anti-Corruption

• Highlights CGD’s research on tax transparency (Owen Barder), beneficiary ownership (corporate tax avoidance), and open contracting (Charles Kenny).
• Publishing government contracts, for example, can make aid more effective and reduce corruption.
  • Quote: “If Malawi had access to what it cost to build a bridge from prior contracts...it can better assess which proposal makes the most sense...not only more efficient, but exactly less corrupt.” (Birdsall, 16:28)

The Shifting Global Order and U.S. Role

• Birdsall reflects on 15 years since CGD’s founding, observing that the US has shifted from "hyper power" to "superpower," stressing the US must lead "by influence and persuasion" rather than as a "benign bully." (17:12)
• She hopes the US upholds its leadership in development, especially humanitarian aid and support for migration.
  • Quote: “...the US still matters immensely… but we need the US at the helm in a way that brings along five. The US can't be...a benign bully anymore. It has to be leading by influence and persuasion.” (Birdsall, 17:12)

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Notable Quotes & Memorable Moments

• “It's a bit like Groundhog Day, exactly.” — Birdsall reflects on the annual hope for IMF reforms finally fulfilled. (01:27)
• “The paradigmatic underfunded global public bad is the climate problem. So bravo to Bill Gates.” (02:01)
• “There's going to be more emphasis on good measurement, more emphasis on learning, as opposed to just butts in seats.” (Birdsall, 13:12)
• “You're our benign bully. It's okay.” — Host Rajesh Merchandani jokes affectionately with Birdsall during her U.S. analysis. (20:03)

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Timestamps for Key Segments

• 2015 Year in Review: IMF, Climate, Deforestation, AIIB — 01:05–05:40
• SDGs, Migration, and Inequality Wishes — 05:48–09:41
• Climate Policy and Carbon Pricing Hopes — 09:58–12:07
• Education: Outcome-Based Aid and the Learning Crisis — 12:26–14:30
• Transparency, Open Contracts, and Tax Justice — 14:35–16:34
• 15 Years of CGD & U.S. Global Leadership — 17:12–20:03

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Tone and Style

The conversation is candid, insightful, and lightly humorous. Birdsall brings rigorous analysis alongside personal “obsessions” (median income, outcome-based aid), and Merchandani keeps the discussion accessible and lively, frequently referencing CGD’s research community.

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Summary

Nancy Birdsall’s 2016 wish list covers critical, actionable steps for advancing global development: from deepening reforms at international financial institutions to embracing real accountability in the SDGs, pioneering outcome-focused education funding, scaling up climate solutions, enhancing transparency, and preserving the positive role of U.S. leadership in a changing world order. Listeners leave with a sense of optimism, practical priorities, and a celebratory nod to CGD’s 15 years of impact.

Transcript

[A]

Foreign.

[B]

Hello, and welcome to the CGD podcast with me, Rajesh Merchandani. So how are those 2016 New Year's resolutions doing? Given up on them yet? I know for myself it's only halfway through the month and I've already not been going to the gym as often as I said I would. But here at cgd, not only do we think about how each of us could act differently each year, but we also cast our minds towards how governments and institutions could improve their policies to make the world better and fairer for those in developing countries. And our president, Nancy Birdsel, joins me for this podcast to discuss. Nancy, your wish list for 2016. Welcome.

[A]

Thank you, Rajesh.

[B]

Before we move on to 2016, let's cast our minds back 2015. It was touted as a big year for development. So in your mind, what were the things that went well? What were the things that didn't go so well? What are you particularly happy to have seen happen in 2015 with the development lens?

[A]

Wonderful question. I'm going to mention three things. First, one has to be the IMF quota reform when was approved by the US Congress. That's been on my wish list. Well, probably every year since it was negotiated.

[B]

Quite a few wish list blogs in January have had that on there. It's a bit like Groundhog Day.

[A]

It's a bit like Groundhog Day, exactly. And I think it's worth saying from a development point of view that that makes a difference. We can't have development if we have instability in the financial system. We Learned that in 2008, 9 and.

[B]

Even 10 IMF quota reform tickets from late at the very tail end of 2015. But just before that was also the Paris Climate Conference. And I think that was seen as a kind of, you know, a high point in terms of international consensus. Was it a good year for climate last year?

[A]

Well, it wasn't ideal, but yes, definitely good. And good was a big step forward. Let's see. First, Bill Gates showed up in Paris and put 2 billion of his own money into R and D on clean energy. And I like that a lot. In fact, one of my wishes for the Addis Ababa Financing for Development conference had been that there be a billionaires club to finance underfunded global public goods like climate, like climate. The paradigmatic underfunded global public bad is the climate problem. So bravo to Bill Gates. Second, we did have initial small steps on reducing fuel subsidies, which is related very closely to pollution. Because when you have fuel subsidies within a country, first of all, they're unfair in the sense that mostly the rich benefit from those subsidies. And second of all, they increase consumption of carbon based material like gasoline. So India, Indonesia, Nigerians, Nigeria all moved in the direction of reducing their fuel subsidies, exploiting the fact that the price was down of oil and thus of fuel. I wish the US Would do it, but we can come to that in 2016. And the third big event for us, particularly at CGD in Paris, is that three countries gave momentum to the movement for reducing deforestation, which essentially has to do with rich people buying the service that tropical forest countries provide when they keep their trees standing. Those trees are the most efficient form of carbon capture and storage that the world has.

[B]

Okay, I'm going to grant you one more retrospective wish fulfilled from 2015. We've had the IMF quota reform, a little bit of good news on climate, and then one more what else?

[A]

Right. So, you know, I've always been kind of a champion of international cooperation, including in the form of more power, more money, more capacity at the multilateral development banks. And in 2015, we had the creation of the Asian Infrastructure Investment bank led by the Chinese. I think it's something to cheer. The Chinese took leadership. Everything about it isn't ideal, but they took that leadership. They put $50 billion of capital on the table. Many other countries joined, so there's more capital out there that is potentially going to be used in good ways in an environment of global growth. For 2016, that doesn't look great.

[B]

There was a freeing up of resources as well at the Asian Development Bank.

[A]

Yes, I would call it better leveraging of existing resources because the Asian Development bank made a decision and there was a lot of work put into this over several years. Cheers to the leadership of the Asian Development bank and the board there and the governors to merge, in effect, the balance sheets of the soft window and the hard window, which allows potential, particularly the contributions to the SOF window, to enter the balance sheet in a way that they can be better leveraged. And I think it's another thing to cheer that now some of the other multilateral banks are thinking about how to do it.

[B]

Okay, those are things from 2015. But what about the SDGs? Is that not a highlight of 2015 for you?

[A]

Yes, the SDGs were important because they reflected and captured a set of values that are viewed by so many countries now. They're universal and they focus, and this is very 21st century compared to the 20th century, on the sustainability issue, which is also, you know, sustainability in the environmental sense. But I would say sustainability also in the political sense that you can't have a world that has so much inequality. It's not politically sustainable. You get a lot of volatility and unhappiness and political instability. So bravo to that movement that was brought together in September at the United Nations General Assembly. I'd say if I wanted to wish for what more could be done, I would focus on a couple of things. We still there are a lot of targets. There are 17 goals, there's 169 targets. And a lot of snickering in a way about that that makes sense in some respects. But there's an opportunity still because each of the targets now is being discussed as what are the indicators that would help measure the targets. And we know from the Millennium Development Goals that in the end the ability to measure and hold accountable countries was absolutely fundamental to the success that the Millennium Development Goals had. So I want to mention two areas where something could be done should be done on indicators. One is on migration. There wasn't enough said about migration and international mobility of labor as a route out of poverty and a benefit to the whole world that can be associated with migrants winning, recipient countries winning and sending countries winning.

[B]

Because the work of Michael Clements here.

[A]

At the Centre, tremendous work of migration.

[B]

Is a massive driver of development. It's a benefit for both the receiving and the sending country.

[A]

And if we don't manage as a world what migration there is better, we are leaving on the sidewalk trillions of dollars in GDP and in welfare. So I'd like to see more clarity on how to measure the right direction on migration. And there's a basis for doing it, which we have created here at CGD in the Commitment to Development Index, which has as one of its components migration that deals with a set of indicators that you can measure and associate with each of the high income countries, at least right now. So that's one. And the other is income inequality. Because although the SDGs talk a lot about inequality, it's a little mushy.

[B]

Well, there is a whole SDG on it.

[A]

Yes, but how are we going to measure it? And there's a little bit of nervousness about, well, what does it mean and how to think about it. There's no absolute right amount of equality that economists can endorse, obviously complicated issue. So my sort of smaller, less ambitious wish around that is that the world start to use the median income or consumption in each country as a way to capture something about the absolute welfare of the typical person or household. And if compared Then to average GDP per capita, which is all over the place, you get an indirect measure of how much inequality there is and how it's changed from year to year.

[B]

That is a personal sort of bugbear of you. You have that.

[A]

I have a little bit of an obsession about the median.

[B]

Okay, so those are a couple of wishes. We talked about the SDGs. I like the idea of a mushy SDG. Let's return to climate. What do you want to see happen in that area in 2016?

[A]

Yes, I'm glad you're bringing us back to climate, because it really does matter so much for development. I would like to see the seedlings, the beginnings, the little green shoots of carbon pricing, which are coming in many different forms, begin to thrive in 2016. So let me give three examples. One is California, which has instituted a cap and trade system and has an arrangement which is about to take off. We hope that's my wish, under which a state in Brazil, Acre, can participate through offsets, through a kind of trading of obligations of polluters in California, transferring some resources to Acre or buying from Acre a cleaner global environment by helping Acre reduce its deforestation. Okay, that's one second. We have in the US the beginning of another round of cap and trade because of the Obama administration's decision to tell states that they have a cap on the emissions associated with their coal plants, with their power plants. And that I hope generates the beginning of a more larger. There's already some cap and trade in the US and the Northeast and a little bit in California. But this could be the beginning of something bigger that then would give people a better sense of how well this can work and how important it can be as an efficient measure to reduce greenhouse gas emissions. And then the third thing is that in China, which has had cap and Trade pilots in three of its major cities this year in 2016, will be setting up presumably the details, the protocols, the standards, the regulatory arrangements for a nationwide cap and trade system that would be launched early in 2017.

[B]

So Climate A big area for you, obviously, in your own research, because of your involvement, your co chairing of the Forest Working Group, and also because you do a lot of research on global public goods as well. Climate is a global public good. But there are other areas in terms of development that you want to see progress in this year. I know education is also a big one.

[A]

Yes, I'm very excited because Gordon Brown has taken leadership and has set up a commission on financing of education. And our chair of the board, Larry Summers, is a member of that commission. So I have a wish that the Brown Commission report, which will come out, I believe in the fall of 2016, puts a lot of focus on the potential for outcome based aid. Now, you know, and many of our listeners probably, probably know that's another one of my obsessions is outcome based aid.

[B]

It's more than an obsession. I mean, it's a big deal here at cgt.

[A]

It's a big deal here.

[B]

Came up with the idea and it's kind of gaining traction and currency in different aspects of development around the world.

[A]

And our first examples going back now 10 years were around education. So I'm hoping that the Brown Commission gives a little bit of a bump to the idea. I think there's enough evidence that it can work. It's not completely straightforward, but the Brown Commission could really, you know, put a marker down that there should be more resources, but also, as with forests, not only just more on the table, but more of it channeled in this form. Because when it's outcome based aid, countries have to take responsibility. They can innovate, they can think. There's going to be more emphasis on good measurement, more emphasis on learning, as opposed to just butts in seats, as one of my colleagues here at CGD calls it. Not just enrollment, but actually our children learning more. And we know from other CGD work there's a learning crisis, especially in low income countries in the developing world.

[B]

The point is, I think one of our senior fellows, Lant Pritchett's book is.

[A]

Called Schooling Ain't Learning, the Rebirth of Education. Schooling Ain't learning. Learning.

[B]

Kids are going to school, but they're not learning.

[A]

And it's tragic.

[B]

And then donors are paying for the input of butts on seats, as you said. You're saying, pay for the outcome of learning.

[A]

Exactly. Thank you, Rajesh. Well said.

[B]

Okay, so that's education. One thing that we also talk a lot about here at cgd, one of the things that we have a lot of work on that Owen Bard has done work on, Charles Kenny is doing a lot of work on, is transparency. Making things more transparent.

[A]

Yes. And I love that you put those together because Owen's work has been around tax transparency. And that has at least two parts for me. One is more sharing across countries of information on taxes with anonymity on actual payers, but in a way that allows especially developing countries to know the extent to which there's capital flight, to think about what that means for their tax system and how to, you know, there are a lot of steps they might need to take. But at the moment, that's one issue. The second is what Owen and other colleagues refer to as beneficiary ownership. Who is it that actually, at the corporate level, it's very confusing to know. And so then it takes us back to, well, whose profits are being taxed and whose are not being taxed. So it's something for everybody. And then, Charles, work is all about publish what you buy. If Malawi had access to what it cost to build a bridge from prior contracts in neighboring countries that had been published, then Malawi can do better. It can assess. It's going to get more competitive bids in the first place, and it can better assess which proposal makes the most sense. So that's a simple example, but this is true across the board on publishing. Governments publishing the contracts they make, not.

[B]

Only more efficient, but less corrupt as well.

[A]

Not only more efficient, but exactly less corrupt.

[B]

In this podcast, Nancy, we've talked a lot about work that CGD has done in the past, and there's partly a reason for that. It's always good to remind people, but particularly this year because this is our 15th anniversary year. So, listeners, we're gonna have a lot of events, look out for those over the course of the year, and blogs as well, marking this. It'll be really interesting and we hope that many of you will be involved as well and tell us what you think. But just give us an idea, Nancy. When you sort of look back over the first 15 years of CGD, what's changed, not just within the organisation, but in the world, if you like, and how are we poised, do you think, for the next 50?

[A]

Oh, that's a wonderful question. You know, I think the big change in the world is associated with the rise of the emerging markets and the change thus in the geostrategic balance of power among countries. And I've written a lot about how the US compared to 15 years ago when it was a hyper power, now it's only in quotation marks, a superpower. So the US still matters immensely, and we see that over and over again. If the US isn't there on an issue like the IMF quota reform, things can get bogged down. So that's a big change in the world, but also one that we shouldn't overdo. We still need the US at the helm on many issues, but we need the US at the helm in a way that brings along five. The US can't be, what I've called in some written work, a benign bully anymore. It has to be leading by influence and persuasion. So I'd mark that as a big difference. So at cgd, we have a huge comparative advantage because we're in Washington and we have lots of informal relations with past, current, and probably future leaders in the economic and political system in the US and in the US Government. So it takes me back to a wish for 2016, which is that we, as an American, I want even though it's going to be a difficult year with the presidential election, I'd like to see the US at least hold the forge on progress that has been made here on attention to development issues. And let me mention an area where I think it's worth our thinking more about it and working more with the US Leadership at USAID especially, which is humanitarian issues, where the US Has a comparative advantage. It's always taken leadership. We have very good work led by Owen Barter here at CGD on thinking about new ways of delivering humanitarian assistance. And second, I would say the US has always been the land of immigration and has benefited enormously. I really would hope in 2016 that my country would step up. Sorry for a long ramble on what's changed and what hasn't changed.

[B]

That's okay. You're our benign bully. It's okay. Well, we will see in 12 months from now if your 2016 wishes come true. Nancy Birtzel, always great to have you on the podcast. Thanks for joining me.

[A]

Thank you, Rajesh.

[B]

And as I mentioned, look out for a year's worth of fascinating, interesting, exciting events and blogs to mark CGD's 15th anniversary year this year. And do join me, Rajesh Merchandarney, for the next podcast from the Centre for Global Development.