As they continue to press for full Senate approval, proponents of a new U.S. International Development Finance Corporation, which would be established by the BUILD Act of 2018, assert that the new corporation would help the world realize the United Nations’ grand-scale “sustainable development goals.”

But seeking to gain support from conservatives for the International Development Finance Corporation—which would replace the Overseas Private Investment Corporation—by framing the sustainable development goals in a positive light is a dubious proposition at best.

Conservatives know that adoption by developing countries of policies promoting economic freedom is a far better approach than government spending on sustainable development goals programs, as The Heritage Foundation’s Index of Economic Freedom demonstrates year after year.

Perhaps BUILD Act promoters are not familiar with the spot-on critique of sustainable development goals by economics professor Bill Easterly of New York University. Parodying the U.N.’s “SDG” acronym, he rightly called them “senseless, dreamy, garbled” utopian goals.

Easterly noted that buried within the ponderous 35-page U.N. declaration of the 17 sustainable development goals, which was launched with great fanfare in 2015, are phrases such as “thematic reviews of progress,” “implement the 10-year framework of [programs],” and “accelerated modalities of action.”

The 17 goals, in turn, have 169 targets, a list that has both too many items and too little content for each entry, such as target 12.8: “By 2030, ensure that people everywhere have the relevant information and awareness for sustainable development and lifestyles in harmony with nature.”

Proponents of the International Development Finance Corporation actually concede that even spending trillions of taxpayer dollars every year would not be enough to achieve the amorphous and poorly defined U.N. goals.

But then, that’s not surprising, given Easterly’s observation that “the [sustainable development goals] are so encyclopedic that everything is top priority, which means nothing is a priority.”

Easterly thus confirms our commonsense intuition that neither an International Development Finance Corporation, nor any other government foreign aid program, should be based on achieving the sustainable development goals.

A Heritage Foundation analysis in 2015 echoed this conclusion, finding that:

Taken in whole, the [sustainable development goals] are, quite simply, a mess—broadly unusable as a framework for development.

They do, however, hold great promise for fulfilling the real purpose of their drafters: to justify the inevitable calls of development professionals and developing countries for more funding.

Trying to implement the [sustainable development goals] will cost a fortune. According to U.N. estimates, meeting the [sustainable development goals] will require $3 trillion a year.

In an era of declining budgets for development assistance, expectations at the United Nations and in some developing countries of huge, new sustainable development goals programs that would be heavily funded by American taxpayers and those of other Organization of Economic Cooperation and Development nations fly in the face of budgetary realities.

As the 2015 Heritage analysis concluded: “No matter how generous Washington is and plans to be, at Turtle Bay [U.N. headquarters in New York], the answer will always be “not enough.”

The private sector-led investments that the International Development Finance Corporation would encourage are certainly the more realistic way forward for development policy. Indeed, private sector investment to developing countries has far outstripped foreign assistance in recent years.

However, the best way to encourage foreign investment is not to subsidize it in countries that have access to international financial markets, but to encourage policy changes to attract private investment.

BUILD Act proponents would be better advised to make further substantial changes to the bill to focus it on projects that either have a compelling foreign policy and national security justification, or provide a bridge for those countries that lack access to international capital markets while encouraging them to adopt pro-market policies.

Specifically, the BUILD Act should be amended to:

  • Reduce contingent liability to $30 billion to maintain the current level of the Overseas Private Investment Corporation. (As it stands now, the BUILD Act would double that cap to $60 billion.)
  • Eliminate automatic growth in contingent liability.
  • Make foreign policy/national security policy (e.g., countering China) a mandatory factor in project approval.
  • Require congressional approval—not just congressional notification—for projects in upper-middle income economies based on a foreign policy/national security policy justification.
  • Eliminate the Development Advisory Committee that was added to the Senate bill. That could increase the influence of Beltway insiders at a new International Development Finance Corporation.

Just another piecemeal fix, the BUILD Act would only further complicate America’s already unwieldy development assistance mechanisms.

Congress should consider the more ambitious and effective approach of overhauling and improving U.S. foreign aid that Heritage has proposed.

The reason why many of the foreign aid projects funded by trillions of tax dollars since World War II have failed to lift countries out of poverty is because that spending has not been tied to incentives to improve policies and the rule of law in developing countries.

Those are the incentives that any new International Development Finance Corporation should prioritize.