Publication: Innovative Financing for Development
Date
2009
ISSN
Published
2009
Author(s)
Abstract
In the run-up to the 'follow-up
international conference on financing for development'
to be held in Doha from November 28 to December 2, 2008, it
seems particularly timely to collect in one book writings on
the various market-based innovative methods of raising
development finance. Although developing countries are well
advised to use caution in incurring large foreign debt
obligations, especially of short duration, there is little
doubt that poor countries can benefit from cross-border
capital whether channeled through the public or private
sectors. The papers in this book focus on various recent
innovations in international finance that allow developing
countries to tap global capital markets in times of low risk
appetite, thereby reducing their vulnerability to booms and
busts in capital flows. Debt issues backed by future hard
currency receivables and diaspora bonds fall into the
category of mechanisms that are best described as
foul-weather friends. By linking the rate on interest to a
country's ability to pay, Gross Domestic Product
(GDP)-indexed bonds reduce the cyclical vulnerabilities of
developing countries. Furthermore, these innovative
mechanisms perm lower-cost and longer-term borrowings in
international capital markets. Not only do the papers
included in this book describe the innovative financing
mechanisms; they also quantify the mechanisms'
potential size and then identify the constraints on their
use. Finally, the papers recommend concrete measures that
the World Bank and other regional development banks can
implement to alleviate these constraints. Economists have
analyzed the feasibility and potential of using various
tax-based sources of development finance in the context of
meeting the millennium development goals. This has given
rise to a new discipline of global public finance. This book
complements those efforts by focusing on market based
mechanisms for raising development finance.
Link to Data Set
Citation
“Ketkar, Suhas; Ratha, Dilip. 2009. Innovative Financing for Development. © Washington, DC : World Bank. http://hdl.handle.net/10986/6549 License: Creative Commons Attribution CC BY 3.0 IGO.”