Scaling Up Funding and Reforming Financial Institutions

In the 2024 United Nations Pact for the Future, global leaders committed to scaling up and reforming international financial institutions to make them fit to meet the global challenges of the 21st century.

Moving forward, there are two vital opportunities for the global community to revive global efforts to address these urgent challenges: the Fourth International Financing for Development Conference (FfD4) in Spain and the Group of 20 (G20) Summit in South Africa.

In a new policy paper from the Boston University Global Development Policy Center and Club de Madrid, members of an expert working group outline three outcomes that are critical for capitalizing on these opportunities and aligning the world economy with a sustainable path.

This working group on ‘Scaling Up Funding and the Role of Multilateral Development Banks (MDBs)’ was chaired by Kevin Gallagher, Director of the GDP Center. Two other working groups hosted by Club de Madrid examined key priorities on debt and tax reform.

The working group found that it is essential that the FfD4 and G20 deliver on:

1. Increasing the scale and quality of MDBs to generate affordable financing for development and climate goals;
2. Enhancing the Global Financial Safety Net (GFSN) such that it enables countries to prevent and mitigate the increasing number of shocks in a globalized and climate-constrained world; and
3. Expanding the level of voice and representation of emerging market and developing countries and their citizens in the international financial architecture (IFA) to improve the effectiveness and legitimacy of the system.

Ultimately, the authors argue that further regressing on development, biodiversity and climate goals will have catastrophic impacts on economies, social relations and the environment. Urgent action is needed on MDBs, the GFSN, and voice and representation in the IFA.