Blended financing, Canadian foreign aid policy, and alternatives

Abstract

This article analyzes the Canadian government’s promotion of blended finance, a policy “innovation” that aims to use official development assistance to leverage private finance to meet the United Nation’s 2030 Sustainable Development Goals (SDGs). It argues that blended finance is not a new idea but rather an old strategy that attempts to resolve the contradictions of neoliberal development by introducing more neoliberal policies. Rather than meeting the SDGs, this mode of financing development shifts investment away from the poorest countries and the services the poor need the most (e.g. health, education, water, and sanitation) and towards more profitable investment in finance, energy, and industry in middle-income countries. Suggestions for alternative development policies based on a propublic agenda—public financing, public-public partnerships, and global financial and tax reform—are provided.