Public Resource Management: Millennium Development Goals (MDG) Financing - conceptual and empirical issues

MDG Costing is the process of estimating the financial cost of realising the MDGs. It is a powerful tool for aligning global development strategies and national budgets with the MDGs.

Costing provides a quantitative basis for decision-making about alternative strategies and choosing among different policy options, as well as for forecasting needs and gaps. Cost estimates have also been valuable for the purpose of advocacy around pro-poor budgeting and more foreign aid. In essence, MDG costing is used to align the national budget, sectoral plans, and foreign aid with the country-specific targets.

Methodologies and Approaches - Several approaches have been developed to estimate the costs of the MDGs, at the global, national, and sectoral level. However, UNDP research demonstrates that existing methods and approaches are unable to yield robust estimates, for they all depend on the various assumptions made. The price tag of the MDGs is determined by strategic choices on the policies and approaches for reaching the targets.

In light of the methodological and data-related difficulties involved, UNDP advocates for a flexible approach to costing. In making sense of MDG costing, more attention must be paid to country-level estimates than to global ones; to the short-to-medium term targets rather than to the long-term; to relative cost estimates than to absolute ones; to domestic sources of funding than to foreign aid; and to national ownership than to donorship.

Resources

Financing MDGs: A Issues Note (2003) - by Selim Jahan
Achieving the MDGs: A Critique and A Strategy (2004) - by Sanjay Reddy and Antoine Heuty
Making Sense of MDG Costing (2004) - by Jan Vandemoortele and Rathin Roy
How Costly is it to achieve the MDG of Halving Poverty by 2015 (2004) - by Nanak Kakwani and Hyun H Sun, International Poverty Centre Brasilia