WHO Funding
WHO gets its funding from a mixture of countries’ membership fees (also called “assessed contributions” calculated according to their wealth and population) and voluntary payments from member states and donors. These are all tied to specific programmes and activities.
However, the amount of money in this pool can fluctuate over time. That means it is more difficult to respond quickly to emergencies such as Covid-19 or the war in Ukraine.
Member States
The EU budget is divided into different funding instruments. Among the most important sources of funding are Structural Funds and European Regional Development Funds (ERDF). These funds allow Member States to invest in employment, social and economic cohesion and a sustainable economy. They also finance cross-border or international programmes and projects with a European dimension.
In addition, the Commission can take corrective measures to correct errors in Member State spending or in the implementation of programmes or services. In 2017, the Commission recovered EUR2.8 billion of EU money. This represents 2.1% of all the EU’s budget payments in that year.
However, this does not mean that the Commission always recovers the full amount of money incurred by Member States. There are a number of other sources of revenue, including tax and other deductions from EU staff remunerations, contributions from non-EU countries, interest on late payments and fines, and other diverse items.
Another source of funding is the EU’s loan facility, the Refinancing and Reform Programme (RRF). This is designed to support additional reforms and investments in the Member States. Unlike the other three funds, the RRF is not funded in proportion to each Member States’ GNI.
As a result, some Member States might not use their share of the loan facility. This is especially true of self-described “frugal” member states and those with low credit ratings.
Those who choose to use their share of the loan facility need to be careful not to waste it. For example, they need to ensure that their country’s economy can absorb the loan payment without putting its budget at risk or triggering an economic crisis.
One way to ensure that the RRF is used effectively is by improving its governance. This requires better financial governance and internal controls at the national level, as well as more efficient resource management, financial reporting and monitoring of expenditure.
Moreover, research policy frameworks differ widely in the Member States. This is in part due to the evolution of funding mechanisms based on project funding and institutional block funding, as compared to PBRF systems.
Non-state Actors
Non-state actors, also known as non-governmental organisations (NGOs), community-based organisations, farmers’ associations, business or professional associations, environmental groups, univers i t ies and trade unions, are involved in development cooperation. These actors have a range of interests and functions, including the promotion and protection of human rights, including economic, social, and cultural rights (ESCR).
The role of non-state actors is often controversial and contested. They are not only able to provide services that governments do not offer, but they can also act as agents of change, which can undermine the sovereignty and authority of states.
In the Middle East, for instance, non-state armed opposition groups are now a major factor in regional politics. These groups, such as Hamas in the Gaza Strip and Hezbollah in Lebanon, have become critical tools for political conflict resolution and competition between regional powers. In addition, these armed groups have been a key driver in the recent wars in Syria and Iraq, as well as in the conflicts in Libya and Yemen.
Moreover, the proliferation of non-state actors has also led to a new level of violence. This has included both violent non-state actors (VNSA) and more traditional armed groups that have expanded their scope in the region.
Iran has been one of the most influential regional powers, supporting violent non-state actors, such as Hezbollah, in order to leverage its influence and strengthen its presence in Syria and the Levant. In addition to providing financial support, Iran has supervised the buildup of Hezbollah’s military strength and its training of fighters, as well as overseeing the distribution of weapons.
As the world faces more complex and volatile challenges, national governments have less and less capacity to achieve their goals on their own. In such situations, other actors will have to step up their efforts in the pursuit of sustainable development.
To date, the global community has developed a range of international institutions that seek to address these challenges. These institutions have different roles and structures, but they all share common goals: to deliver the results that are needed by vulnerable communities in developing countries.
International Organisations
The International Organisations (IOs) provide a range of services to their members, including capacity development, information exchange, and legal advice. The World Bank, International Monetary Fund (IMF), and the United Nations Development Programme (UNDP) are IOs that focus on poverty reduction and the improvement of living standards in developing countries through low-interest loans and grants to support economic growth, education, health, infrastructure, and communications among other goals.
The IMF also provides training and technical assistance to governments in areas ranging from central bank operations to financial sector supervision and reporting. This work is aimed at helping countries to tackle cross-cutting issues, such as poverty, income inequality, gender equality, climate change, and corruption.
Increasingly, multilateral development institutions are providing financing and risk insurance to private companies in developing countries, as well as Western countries that want to invest in these countries. Nevertheless, the extent of such flows remains understudied in the empirical literature.
There are several reasons for this under-researched area, but the most important one is that these flows are not always accompanied by adequate information to ensure that they are being used effectively. Moreover, the impact of these flows is difficult to measure, because there are often significant differences in the nature and intensity of these flows between donor and recipient countries.
Some multilateral development institutions, such as the IFC and MIGA, aim to promote private investment in developing countries through financing, equity investments, and risk insurance. These forms of finance are not a part of traditional aid, but have received considerable attention from development policymakers and thought leaders as a possible solution to achieving the Sustainable Development Goals.
Another strand of IO development finance involves the provision of grants and endowments without repayment to developing countries. These grants and endowments are provided by a variety of IOs, including most specialized UN agencies.
Unlike traditional aid, these grants and endowments tend to be a significant share of the total development finance coming from IOs. However, there is a gap in the literature on who funds these endowments.
This research seeks to fill this gap by examining who contributes to trust funds in the multilateral development institutions and how these donors make their choices between trust funds. Using a large-N analysis of OECD/DAC donors’ participation in trust funds over the past decade, we find that the choice between trust funds involves a fundamental trade-off: larger funds provide donors with a “burden-sharing” advantage, while donors are able to assert their individual preferences better in a smaller fund with fewer other donors. This evidence corroborates existing hypotheses on the political economy logic behind donor preferences and their influence on the allocation of international development assistance.
Private Sector
The private sector is a part of the economy that is run by individuals, companies, and organizations. It includes businesses, charities, and nonprofit organizations that are not governed by the government.
The public sector is a segment of the economy that is regulated by the government. Its goals are to promote economic growth, and protect the environment.
A public-private partnership (PPP) is an innovative financing model that combines the resources of a government and a private entity in order to deliver a project. This approach is often used to finance infrastructure projects, such as roads, rail, water and energy.
Many governments are facing the need for massive new investment in infrastructure — to build essential power and water, connect cities and markets, and strengthen digital connectivity. This requires a revolution in how governments and development finance institutions (DFIs) approach the funding of infrastructure projects.
This funding can come from a variety of sources, including government loans and grants or private funds. However, it is important to understand the advantages and disadvantages of each source of funding.
As an example, the International Finance Corporation (IFC), a member of the World Bank Group, uses blended finance solutions to support private sector investments in the developing world that may not attract commercial funding because they are perceived as riskier or early stage projects. In addition, GAFSP’s Private Sector Window uses concessional funding and co-investing with IFC to help address market failures by providing affordable, risk-adjusted funding that enables IDA and fragile and conflict-affected states to take advantage of the private sector’s development impact potential.
In addition to leveraging the resources of global partners, many governments have created autonomous institutions to serve as an interface with the private sector. These institutions can work as a platform to improve international investors’ confidence in emerging markets, and provide technical assistance to governments in project structuring, financing, procurement, and execution.
The Private Sector Facility at the Global Fund supports private and non-governmental organizations through resource mobilization, delivery innovation, and innovative finance. It aims to catalyze private climate finance that is fully aligned with a country-driven agenda and meets the needs of developing countries.