Introduction
Two challenges currently threaten the 80-year record of rising global living standards and poverty reduction. First, it is widely recognized that crises in the global commons—used here in a broad sense to include various crossborder challenges that do not fall within national jurisdictions, such as climate, pandemics, and cyber risks—are having an increasingly negative global impact. Without effective collective action, these challenges risk becoming even more urgent over time. Second, despite this recognition, most agree that progress in addressing them has been too little and too slow.
Understanding the reasons for this impasse, and finding a path toward a resolution, is the motivation behind this Bretton Woods Committee Multilateral Reform Working Group (MRWG) Report.
Neither the public sector nor the private sector—alone—can solve these challenges. Thus, there is merit in identifying the specific shortcomings in the entire system—public and private—that are impeding progress. According to the analysis presented here, a set of specific gaps in both the public and the private sectors—encompassing governance, implementation, and accountability—need to be tackled to break this impasse. Finally, focusing the gap analysis on the system that surrounds climate finance, rather than more broadly, allows the analysis to be more specific and concrete about the changes needed to make sustainable progress. However, other areas such as public health, digital public infrastructure, and trade could also benefit from a similar gap analysis, and some recommendations of this report apply beyond the bounds of climate finance.
The report takes the starting point that the World Bank and the International Monetary Fund (IMF)—given their global membership, shareholding model, and weighted voting structures—are best placed to fill the global leadership role to make progress. But are they fit for purpose with respect to governance, resources, and expertise to effectively tackle these global commons challenges? And how can incentives facing the private sector be managed to ensure that the public and private sector goals are well aligned and that the private sector can fully contribute to them?
