Girishankar, Navin2012-03-192012-03-192009-11-01https://hdl.handle.net/10986/4300As early as 2000, development partners embarked on a decade-long search for "innovative" or alternative sources of Official Development Assistance to help finance achievement of the Millennium Development Goals. For their part, developing countries have sought not only more financial flows but better financial solutions, for example, through partnerships that mobilize private finance for public service delivery, risk mitigation efforts that promote private entry in the productive sectors, and support for carbon trading. This paper offers a framework to organize and understand this heterogeneous mix of innovations in fund-raising and financial solutions for development. It also provides, for the first time, a stocktaking of actual innovations that make up the international landscape and highlights the World Bank Group s role to date. The stocktaking shows that innovative finance mechanisms have played a more significant role in supporting financial solutions on the ground than in identifying and exploiting "alternative sources of ODA." Innovative fund-raising therefore should be viewed as a complement to - rather than a substitute for - traditional efforts to mobilize official flows, in particular concessional flows. Going forward, innovations need to be tested and evaluated to determine value-added.CC BY 3.0 IGOACCOUNTINGADMINISTRATIVE COSTADMINISTRATIVE COSTSADVISORY SERVICESAGENCY PROBLEMSASSISTANCE ORGANIZATIONBANK BONDSBANK DEBTBANK GUARANTEESBANK INTERMEDIATIONBANK LOANBENCHMARK BONDSBENEFICIARYBONDBOND INDEXBOND ISSUANCESBOND ISSUEBOND ISSUESBOND MARKETSBONDSCAPITAL FLOWSCAPITAL MARKETCAPITAL MARKETSCENTRAL BANKSCOMMERCIAL CREDITCOMMODITY PRICECOMMODITY PRICESCONFLICTS OF INTERESTCORPORATE FINANCECORRUPTIONCOST OF REMITTANCESCOST-EFFICIENCYCOUPONCREDIT AGENCIESCREDIT GUARANTEECREDIT GUARANTEESCREDIT RATINGCREDIT RISKSCREDITORSCROP INSURANCECURRENCYCURRENCY RISKSDEBTDEBT CONVERSIONDEBT CONVERSIONSDEBT FINANCINGDEBT MANAGEMENTDEBT OFFERINGSDEBT RELIEFDEBT SWAPSDEFICITSDERIVATIVEDERIVATIVE INSTRUMENTSDERIVATIVESDEVELOPING COUNTRIESDEVELOPING COUNTRYDEVELOPMENT ASSISTANCEDEVELOPMENT BANKDEVELOPMENT BANKSDEVELOPMENT FINANCEDISBURSEMENTDISBURSEMENTSDOMESTIC CAPITALDOMESTIC CAPITAL MARKETSECONOMIC AGENTSECONOMIC COOPERATIONECONOMIC CRISISECONOMIC DEVELOPMENTEMERGING MARKETSENVIRONMENTAL PROTECTIONEQUITIESEUROBONDEXCHANGE RATEEXPENDITUREEXTERNAL BORROWINGEXTERNAL FINANCINGEXTERNAL FUNDINGEXTERNAL SHOCKSFACILITATIONFARMERSFEDERAL BUDGETFINANCIAL CRISISFINANCIAL EXPERTISEFINANCIAL FLOWSFINANCIAL INNOVATIONFINANCIAL INNOVATIONSFINANCIAL INSTRUMENTSFINANCIAL INTERMEDIARYFINANCIAL MANAGEMENTFINANCIAL MARKETSFINANCIAL RISKFINANCIAL RISKSFINANCIAL SKILLSFINANCIAL SYSTEMSFINANCING FACILITYFINANCING INITIATIVESFINANCING NEEDSFOREIGN DIRECT INVESTMENTFOREIGN EXCHANGEFOREIGN EXCHANGE RISKSFUND MANAGEMENTFUND MANAGERSFUNDING SOURCESFUTURE CREDITGLOBAL CAPITALGLOBAL CAPITAL MARKETSGLOBAL DEVELOPMENT FINANCEGLOBAL MARKETGOVERNMENT PAPERGROSS DOMESTIC PRODUCTGROUP LENDINGGUARANTEE AGENCYHOUSEHOLDSHUMAN DEVELOPMENTIMMUNIZATIONINDEXED BONDSINFLATIONINFORMATION ASYMMETRIESINFRASTRUCTURE DEVELOPMENTINFRASTRUCTURE INVESTMENTINSTITUTIONAL INVESTORSINSTRUMENTINSURANCEINSURANCE COMPANIESINSURANCE MARKETINSURANCE MARKETSINTEREST RATEINTERNATIONAL BANKINTERNATIONAL DEVELOPMENTINTERNATIONAL FINANCEINTERNATIONAL FINANCIAL INSTITUTIONINTERNATIONAL MARKETSINVESTINGINVESTMENT BANKINVESTMENT CORPORATIONINVESTMENT DECISIONSINVESTMENT FINANCEINVESTMENT FLOWSINVESTMENT STRATEGIESISSUANCEISSUANCESLEVIESLEVYLIABILITYLIQUIDITYLIVESTOCK INSURANCELOANLOCAL BANKSLOCAL CAPACITYLOCAL CURRENCIESLOCAL CURRENCYLOCAL FINANCIAL MARKETSLOCAL MARKETLOCAL MARKETSMARKET CONDITIONSMARKET DEVELOPMENTMARKET ENVIRONMENTMARKET FAILURESMARKET PARTICIPANTSMARKET PRICESMARKET-MAKINGMATURITIESMATURITYMONETARY FUNDNATURAL DISASTERSNONPAYMENTNUTRITIONOUTREACHPARTIAL CREDITPARTIAL RISKPENSIONPENSION FUNDSPOLITICAL RISKPORTFOLIOPORTFOLIOSPRIVATE CAPITALPRIVATE DONORSPRIVATE EQUITYPRIVATE FINANCEPRIVATE INVESTMENTPRIVATE INVESTORSPROMISSORY NOTEPUBLIC ASSETSPUBLIC BANKSPUBLIC FINANCEPUBLIC FUNDSPUBLIC SECTOR BANKSPUBLIC-PRIVATE PARTNERSHIPPUBLIC-PRIVATE PARTNERSHIPSREFUGEESREMITTANCEREMITTANCESREPAYMENTRETAIL INVESTORSRETURNRETURNSRISK MANAGEMENTRISK MANAGEMENT TOOLSRISK MITIGATIONRISK PROFILESECONDARY MARKETSECURITIESSEIZURESETTLEMENTSMALL BUSINESSESSOURCES OF FUNDSSOVEREIGN DEBTSSOVEREIGN ENTITIESSOVEREIGN LENDINGSOVEREIGN RISKSTART-UPSTART-UP COSTSSUPPORT INFRASTRUCTURESWAPSWAP MARKETTAXTECHNICAL ASSISTANCETRADINGTRADITIONAL LOANSTRANSACTIONTRANSACTION COSTSTRANSACTIONS COSTSTREASURYTREATYTRUST FUNDTRUST FUNDSTRUSTEEURBAN DEVELOPMENTVARIABLE COUPONWorld Bank10.1596/1813-9450-5111