Helping countries become more self-reliant: how does GIF investment align with USAID’s aim to better support partner countries in tackling their development challenges?

In 2018, GIF donor the U.S. Agency for International Development (USAID), unveiled a shift in how the agency plans to support country partners’ capacity to plan, finance, and implement solutions to local development challenges.

USAID also released a set of metrics that underpin this ‘journey to self-reliance’ approach.

The ‘journey to self-reliance’ Theory of Change consists of two mutually reinforcing factors that determine a country’s self-reliance:

• Commitment: the degree to which a country’s laws, policies, actions, and informal governance mechanisms — such as cultures and norms — support progress towards self-reliance; and
• Capacity: how far a country has come in its ability to manage its own development journey across the dimensions of political, social, and economic development, including the ability to work across these sectors.

What does this mean in practice for country partnerships, what are the metrics behind it, and how does GIF investment align with USAID’s vision for this initiative?

First it is vital to look at how countries’ progress toward self-reliance was tracked – the metrics that can show how far along its ‘development journey’ USAID considers a country to be, which, in turn, aims to provide information that can help ensure investment is made in areas that facilitate the process and move it forward.

The result is a scatter plot with four quadrants, where countries in the upper right are considered to have high capacity and high commitment, countries in the lower left have low capacity and low commitment, and those in the other two quadrants have a combination of each. You can see an example here of a graph for Indonesia for a clearer picture on how USAID aims to objectively measure the ‘development spectrum’.

The ‘journey to self-reliance’ focuses on each country’s ‘unique set of challenges and opportunities’ to help overcome barriers to sustainable growth, economic development, democratic governance, and human and institutional capacity. GIF shares this approach. We focus on three pathways around barriers which map with ‘journey to self-reliance’: making markets work for poor people, improving government services and operations, and promoting women’s and girls’ equality.

We seek entrepreneurs – social and commercial – with deep understanding of the local barriers to growth and innovative ways of overcoming those barriers. Our staged approach to investment allows commitment, capacity, and knowledge to snowball as innovations prove themselves through continuous experimentation, feedback and expansion.

Here are some examples of how GIF’s thematic priorities allow us to overcome key bottlenecks to development:

Making markets work for poor people

GIF is investing in innovations that can enhance economic productivity by removing market frictions and formalising markets so as to benefit low income households. Our work in agriculture, for instance, tackles the interlocking market failures confronted by smallholder agriculture: poorly functioning input, output, information, and credit markets. Babban Gona, One Acre Fund, and myAgro all provide bundles of these services, reducing farmers’ costs and increasing their farms’ productivity. EM3 makes it possible for owners of even small plots of land to lease tractors. In infrastructure, our investments in SparkMeter and CityTaps use pre-paid metering technology to make energy and water accessible to poor people. At the same time, these investments help put utilities on a sustainable footing, make it feasible for them to expand and reach the many who still lack electricity and safe drinking water.

Improving the capacity and efficiency of governments

The ‘journey to self-reliance’ principles stress the importance of boosting countries’ financial self-reliance and fiscal sustainability, besides their capacity to effectively deliver public services. Consistent with this, GIF is supporting several investments to promote domestic resource mobilisation. GIF has supported BIT to build government capacity to apply, test, and refine behavioural nudges that improve tax compliance. CityNudges will explore novel ways of improving revenues collection by cities and by utilities. GIF’s investment in Online Pajak is intended to improve Indonesian firms’ compliance with tax regulations.

Investing in innovations that improve the efficiency of government service delivery in health and education

These include Educational Initiatives, which tackles the distressing inefficiency of education in India, and elsewhere. The government spends heavily to advance a child from grade 1 to grade 6 but more than half of grade-five children are unable to read at the second-grade level; and nearly three-quarters of students in grade three could not solve a two-digit subtraction such as 46 – 17. This is because they have fallen behind, as the teacher pitches lessons to the most advanced in the class. Evidence suggests that Educational Initiatives’ Mindspark software can bring struggling students up to speed at low cost.

Promoting women’s and girls’ equality, a cornerstone of inclusive development.

In addition to being a moral necessity, equality boosts economic growth through tapping under-utilised talent, and promotes democracy through wider involvement of women in decision making at all levels. GIF’s expanding work in this area includes an investment in No Means No Worldwide, whose mission is to end sexual violence against women and children.

We have captured some of our investments and how they link to the journey to self-reliance roadmap indicators. View our table here.