Journal Article

IDS Bulletin Vol. 36 Nos. 3

Major Additional Funding for the MDGs: A Mixed Blessing for Capacity Development

Published on 1 July 2005

Let us assume – and hope – that the optimists are right: substantially more funds to assist less developed countries (LDCs) to reach the Millennium Development Goals (MDGs) and other ambitious targets will soon be available.

As a result, selected public sector agencies, non-governmental organisations (NGOs) and private firms in qualifying poor countries will experience annual budget growth rates of 10–20 per cent or even more over an extended period of time. Successful high-tech private companies often expand equally fast but this puts considerable capacity strains on them. It can be anticipated that many public sector organisations in poor countries, most of which are presently resource starved, will also experience serious growth pains should major additional funding materialise.

The general argument in this article is that “fastgrowing funding” for MDG-relevant activities combined with “very ambitious time-bound targets” will contribute significantly to the already considerable challenges of capacity development in poor countries where organisations often operate in very difficult and unconducive environments. The MDG approach seriously underestimates the difficulties posed by the social and political context for implementation on the ground. The likely unintended consequences of the MDG approach therefore, may outweigh its benefits in some sectors and countries. Moreover, there is a real risk that attempts at a rapid build-up of organisational capacity will undermine both existing capacity and the prospects for sustaining capacity beyond the ten-year horizon that is implied by the 2015 goals. Given past poor performance on capacity development by both recipient and donor countries, these are formidable challenges for which rapidly expanding budgets are a mixed blessing. It would actually be ‘without meaningful historical precedent’ if capacity increases sufficient to reach the MDGs were generally to occur – especially in Africa (Clemens et al. 2004: 11).

This article deals with some of these capacity issues in the public sector.It applies an organisational – rather than a broader macroeconomic – perspective to the MDG approach, and focuses on capacity issues. It is organised as follows. In Section 2, the MDG approach is briefly described. Based on theoretical insights from the open-systems and institutional perspectives on organisations, and drawing on lessons from implementation studies, support for the arguments above is presented in Section 3. It is supplemented, in Section 4, with a case-analysis of the likely capacity implications of a vigorous pursuit of MGD target to halt and reverse the spread of HIV/AIDS by 2015 in East Africa. Finally, some remedies are proposed (Section 5) and the dilemmas posed by the MDG approach are discussed in the final section.

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This article comes from the IDS Bulletin 36.3 (2005) Major Additional Funding for the MDGs: A Mixed Blessing for Capacity Development

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Therkildsen, O. (2005) Major Additional Funding for the MDGs: A Mixed Blessing for Capacity Development. IDS Bulletin 36(3): 28-39

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Ole Therkildsen

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published by
Institute of Development Studies
Therkildsen, Ole