Navigating the governance gap in global development finance: Lessons from Ghana

THIS PAPER OFFERS A COMPREHENSIVE ANALYSIS OF THE INTERACTION BETWEEN GOVERNANCE AND SUSTAINABLE DEVELOPMENT.

Even though global development actors have been successful in increasing the availability of development finance through bigger pledges, commitments, and allocations, major obstacles at the domestic level prevent the proper flow of funds, leading to chronic underinvestment in public goods in the global south. Underinvestment in a time of compounding global crises such as climate change, conflicts, and post-pandemic stress is clearly dangerous. Building resilience, therefore, demands urgent solutions to unlock more development finance.

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In this paper, the author takes stock of these issues and argues that we run the risk of repeating the same mistakes under the Bridgetown - and allied - Agenda that we made during previous development finance reform projects. Preventing such an outcome requires a genuine governance agenda, supported by a true consensus on norms that value the role of domestic civil society as a check on governments' ability to spend for impact. At any rate, development finance flows will remain constricted until and unless domestic absorption constraints are relieved.

THE PAPER IS DIVIDED INTO THREE SECTIONS:

• First, it examines global financing arrangements and their tendency to overlook governance as a key concept.
• Second, it highlights Ghana's struggle with the global development governance vacuum, both on macroeconomic and microeconomic development levels.
• Third, the paper proposes a governance agenda that aims to create an environment for the effective implementation of the green transition and resilience agenda.