News Release

Economics experts weigh seven innovative ideas to finance millennium development goals

Findings presented to 50 world leaders meeting at UN on hunger and poverty Monday Sept. 20

Peer-Reviewed Publication

United Nations University

A new analysis by global economics experts of seven ideas to potentially cover the estimated $50 billion cost of the Millennium Development Goals (MDGs) is now available. The study was prepared for the United Nations Department of Economic and Social Affairs (DESA), following a resolution of the UN General Assembly in 2000 that called for a rigorous study on new and innovative sources of development funding.

The seven potential options:

  • Global environmental taxes (e.g. carbon-use tax);
  • Global lottery and global premium bond;
  • Tax on currency flows (the so-called 'Tobin tax' designed to discourage excessive currency speculation);
  • Creation of new Special Drawing Rights (creation of SDRs for development purposes, with donor countries making their SDR allocation available to fund development);
  • International Finance Facility (making available long-term, but conditional, funding guaranteed to the poorest countries by donor countries);
  • Fostering greater private donations for development by firms and individuals;
  • Facilitating for emigrants the sending home of money.

    The policy brief from the UN University's World Institute for Development Economics Research (UNU-WIDER) in Helsinki, written by Anthony B. Atkinson, Warden of Nuffield College, University of Oxford, summarizes conclusions from a series of expert analyses commissioned for the project.

    "Developing countries are mobilizing resources themselves to meet the MDG targets by 2015, but they will fall short without additional external flows," the paper says. "Increased private and public money is needed in order for the world's poorest countries to invest in the basic services and infrastructure necessary for human development, and to improve livelihoods and employment for poor people.

    The paper says the $50 billion needed "could be achieved by a doubling of official development assistance (ODA). Welcome steps have been made in that direction, but this takes time, and time is of the essence. For this reason alone, it is necessary to consider new sources."

    "Any realistic programme is likely to consist of a package of measures," the paper says, as only a carbon tax (levied only on high-income countries at a rate equivalent to 4.8 cents per US gallon of gasoline – roughly €0.01 per litre) would by itself raise the required funds.

    The paper stresses the potential independent impact of individual nations in achieving the MDGs.

    "Acting alone, the government of a rich country can take steps to increase the flows of finance for development. A single country could, for example, allow income tax deductions for taxpayers sending remittances to fund community projects in the home country. A single country could launch a premium bond dedicated to development funding. A single country could decide to allocate to development purposes part of the proceeds from its national lottery. A single country could match out of public funds the amounts donated by its citizens to development charities."

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    A brief summary of conclusions is included in the full policy brief, online at: http://www.wider.unu.edu/publications/policy-brief/PB10.pdf. The study, which the policy brief summarizes, will be published by Oxford University Press in October as New Sources of Development Finance, edited by Anthony B. Atkinson.

    United Nations University

    Established by the U.N. General Assembly in 1973, UNU is an international community of scholars engaged in research, advanced training and the dissemination of knowledge related to pressing global problems. Activities focus mainly on peace and conflict resolution, sustainable development and the use of science and technology to advance human welfare. The University operates a worldwide network of research and post-graduate training centres, with headquarters in Tokyo. For more information about the UNU, please refer to the website at http://www.unu.edu.

    UNU-WIDER

    UNU-WIDER through its research seeks to raise frontier issues and provide new and original insights and policy advice aimed at boosting the economic and social development of the poorest nations. UNU-WIDER is based in Helsinki, Finland. For more information, visit our website at: http://www.wider.unu.edu.


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