Countries face a range of constraints –
including capacity constraints, institutional weaknesses, market failures and
policy gaps – that impede financing for sustainable development. Identifying
these constraints is a critical step towards developing policy actions or
reforms that address existing bottlenecks.
However, in developing countries,
constraints are often complex and far-reaching, making it difficult to tackle all
constraining factors at once. In light of this challenge, the INFF approach
focuses on those constraints that are binding – the constraints that, if
lifted, would have the biggest impact on improving the availability and
management of financial resources. Narrowing the scope of the policy and
institutional assessment helps countries prioritise and sequence constraints to
determine which financing policies should be addressed first when developing
the financing strategy.