Financing The UN Development System: Embracing Change
29 Nov 2022

The Dag Hammarskjöld Foundation, the United Nations Multi-Partner Trust Fund (MPTF) Office, the German Institute of Development and Sustainability (IDOS), and the Multilateral Organisation Performance Assessment Network (MOPAN) hosted an online event as part of the Organisation for Economic Co-operation and Development’s (OECD) Multilateral Development Finance Week 2022.

 A financing of the United Nations development system roundtable discussion moderated by the Foundation’s Erik Engberg. Henrik Hammargren, Executive Director of the Dag Hammarskjöld Foundation, Jennifer Topping, Executive Coordinator of the UN Multi-Partner Trust Fund Office. Silke Weinlich, Senior Researcher at the German Institute of Development and Sustainability, Suzanne Steensen, Head of the Secretariat at the Multilateral Organisation Performance Assessment Network and Per Knutsson, Deputy Executive Director of the Dag Hammarskjöld Foundation shared the (virtual) podium.

Trends in UN funding

This was a unique platform for experts to debate present and future trends in financing the UN development system. Participants and speakers agreed that securing the right mix of funding will necessitate an increased dedication and ambition, given current circumstances. Sustainable financing of the Sustainable Development Goals (SDGs), innovation, integrated financing, and improved data tracking to SDG goals and outcomes are essential for its successful implementation. The Funding Compact between the United Nations and Member States highlights the importance of such features.

As Jennifer Topping put it, ‘Given the current profusion of global issues — climate change, conflict, pandemics, economic pressures — we require a heightened effort in collective responsibility and quality financing. A resource-constrained environment makes the quality of UNDS funding paramount. To meet these global challenges, we must commit to a better funding mix with sustainable financing of SDGs, made possible through innovation, integrated financing and a variety of partnerships. We must also strive to develop a stronger evidence base of resources to SDG results, through improved UN financial data tracking to SDG goals and outcomes.’

The challenges of tight earmarking

Suzanne Steensen noted that multilateral institutions operate under increasing pressure with greater  demands. At the same time, the relationship between donors and the UN system suffers from a reduced level of trust, which constitutes an important driver behind the increase in earmarked funding. To rebuild trust will require a joint effort from both donors and the UN system.

She recalled evidence from MOPAN's study conducted on the COVID-19 pandemic which highlighted the importance of the multilateral system in offering flexible resources and responding to transboundary issues. ‘Yet, several donors have reverted to earmarking to fulfil their reporting and accountability requirements, as well as to advance their own national interests.’ .

‘It's important to recognise the need for earmarking to tackle specific issues, scale them and assess their effectiveness. But it's also essential to understand that increased earmarking can create a riskier environment if not used responsibly and strategically,’she concluded.

Quality funding

Silke Weinlich emphasised that better funding would allow UN entities to help countries make tough choices between strategic priorities. It would also enable the UN to strengthen its roles as a convener and defender of international norms and values.

She also drew attention to a 2019 study which argued that ‘there are many shades of earmarked funding, and forms which can actually bring UN entities together to work in cross-sectors and at a greater scale’, something other types of funding cannot do. To further facilitate collaboration between UN entities, Weinlich suggested the use of joint funding instruments, such as UN pooled funds.

Embracing changing

Speakers in the event concluded with the idea that Member States and the UN system must embrace change and work together to enable the multilateral system to respond to increasing demands. Stakeholders need to build trust by promoting transparency, work on the evidence base to inform global dialogue and reinforce systems, frameworks, and tools for joint work. Through these efforts, partners can support UN entities in their roles as conveners, guardians of norms and providers of coordinated analysis and programming.


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