Contemporary Issues in Development Finance

INTRODUCTIONPURPOSE OF THIS BOOKMARKET IMPERFECTIONS AND DEVELOPMENT FINANCEAsymmetric informationDEVELOPMENT FINANCE INTERVENTIONSInterventions for correcting market imperfectionsEstablishing development finance institutionsFINANCIAL DEVELOPMENT, FINANCIAL INCLUSION, AND FINTECHAN OVERVIEW OF THE CHAPTERSCONCLUDING REMARKSDiscussion questionsNotesReferencesFinance, economic growth, and developmentINTRODUCTIONFINANCIAL SECTOR AND FINANCIAL DEVELOPMENT: CONCEPTS AND DEFINITIONSFINANCIAL REPRESSION, LIBERALIZATION, AND GROWTHTHE FINANCE-GROWTH NEXUSFinance and growth: the debate on causalityTHE ROLE OF THE FINANCIAL SYSTEMFINANCIAL INTERMEDIATION AND GROWTHDeposit-taking financial institutions and growthBANKSCREDIT UNIONSCapital markets and growthSTOCK MARKETSBOND MARKETS Summarized overview of financial structureREGULATION IN THE FINANCIAL SECTORCONCLUSIONDiscussion questionsNotesReferencesMicrofinance and developmentINTRODUCTIONTHE EVOLUTION OF MICROFINANCE: FROM MICROCREDIT TO MICROFINANCE PLUSTHE SUPPLY SIDE OF MICROFINANCE: MFIS AND THEIR PERFORMANCEMICROFINANCE PRODUCTSTHE IMPACT OF MICROFINANCE ON END USERSImpact of microcreditImpact of microfinance, other than microcreditCONCLUSIONDiscussion questionsNotesReferencesPrivate capital flows and economic growthINTRODUCTIONTHE DETERMINANTS OF PRIVATE CAPITAL FLOWSFDI determinantsTHE NEOCLASSICAL ECONOMIC APPROACHTHE OLI PARADIGMHORIZONTAL AND VERTICAL FDI APPROACHESForeign bank lending determinantsFPI determinantsBENEFITS AND COSTS ASSOCIATED WITH PRIVATE CAPITAL FLOWSBenefits of FDICosts of FDIBenefits of foreign bank lendingCosts of foreign bank lendingBenefits of FPICosts of FPICONCLUSIONDiscussion questionsReferencesPrivate capital flows to Africa in 2016: best and worst performersRemittances and developmentINTRODUCTIONTHE MAGNITUDE AND IMPORTANCE OF INTERNATIONAL REMITTANCESCHARACTERISTICS OF REMITTANCESRemittances are person-to-person transfersRemittances and resource allocationAre remittances countercyclical?MOTIVATIONS TO REMITAltruismExchangeInsurance for household at homeInvestment for bequestsMixed motiveREMITTANCES AND GROWTHTheoryEmpirical evidenceREMITTANCES AND FINANCIAL DEVELOPMENTREMITTANCES AND HOUSEHOLD INCOMESRemittances and inequalityRemittances and povertyPOLICY TOOLS AND INTERVENTIONSFinancial literacy programsMigrant control over the use of remittancesCostsChannel remittances to specific purposesCONCLUSIONDiscussion questionsNotesReferencesForeign aid and economic developmentINTRODUCTIONEVOLUTION OF FOREIGN AIDRATIONALE FOR AIDAID ARCHITECTURE, VOLUMES, AND TRENDSAID EFFECTIVENESSAid and growthAid and povertyAid and domestic resource mobilizationAid uncertainties and conditionalitiesAid and corruptionCONCLUSIONDiscussion questionsNotesReferencesGlobal financial architecture Emerging issues and agenda for reformsINTRODUCTIONINTERNATIONAL FINANCIAL INSTITUTIONSThe Bretton Woods institutionsINTERNATIONAL MONETARY FUND (IMF)WORLD BANKWORLD TRADE ORGANIZATION (WTO)THE BANK FOR INTERNATIONAL SETTLEMENTS (BIS) AND THE BASEL COMMITTEE ON BANKING SUPERVISION (BCBS)The Basel Committee on Banking Supervision (BCBS)OTHER GLOBAL DEVELOPMENT FINANCE INSTITUTIONSMultilateral Development Banks (MDBs) and Multilateral Financial Institutions (MFIs)Regional development banksINTER-AMERICAN DEVELOPMENT BANKCENTRAL AMERICAN BANK FOR ECONOMIC INTEGRATIONAFRICAN DEVELOPMENT BANKASIAN DEVELOPMENT BANKEUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENTFINANCIAL GLOBALISATION AND GLOBAL CRISISThe dynamics of financial globalisationThe benefits and risks of financial globalisationFinancial globalisation and the global financial crisisREFORMING THE GLOBAL FINANCIAL ARCHITECTUREEarlier proposals on reformProposals on reform after the global financial crisisOTHER NOTEWORTHY ORGANIATIONS/GROUPSThe Groups of Seven (G7), Groups of Ten (G10), Groups of 20 (G20)THE GROUP OF SEVEN (G7)THE GROUP OF 10 (G10)THE GROUP OF 20 (G20)The Organisation for Economic Cooperation and Development (OECD)THE UN SUSTAINABLE DEVELOPMENT GOALS (UN SDGS)CONCLUSIONDiscussion questionsReferencesSovereign wealth managementINTRODUCTIONTHE CONTEXT OF SOVEREIGN WEALTH MANAGEMENTTHE ANALYTICAL FRAMEWORKEVOLUTION AND OVERVIEW OF SOVEREIGN WEALTH MANAGEMENTBefore the 1970sBefore the financial crisis of 2007/2008Period succeeding 2007/2008 global financial crisisSWF FUNDING, MANAGEMENT, AND GOVERNANCEFundingGovernance and management structuresTHE CHANGING ROLE OF SOVEREIGN WEALTH MANAGERSStabilisation fundsSavings fundsReserve fundsDevelopment fundsPension reserve fundsA role in the capital and financial marketsA policy toolBilateral and multilateral international economic cooperationASSET-LIABILITY MANAGEMENT IN EMERGING ECONOMIESManaging sovereign assets - issues to considerManaging sovereign liabilities - issues to considerASSET ALLOCATION AND RISK MANAGEMENT FOR SOVEREIGN WEALTH FUNDSCHALLENGES AND OPPORTUNITIES OF SOVEREIGN WEALTH FUNDSInformation asymmetryA threat to financial stabilityMarket and asset pricing distortionsTHE SANTIAGO PRINCIPLESCONCLUSIONDiscussion questionsNotesReferencesSovereign debt managementINTRODUCTIONOVERVIEW OF DEBT MANAGEMENTEXTERNAL DEBT AND ECONOMIC GROWTHExternal debt and economic growthEXTERNAL DEBT-TO-GDP RATIOSLOW PRIMARY SURPLUSVARYING BORROWING COSTThe relationship between economic growth and external debtThe channels via which external debt impacts growthDIFFERENCE IN THE MARGINAL PRODUCT OF CAPITAL AND THE COST OF CAPITALHIGH TAX ON RETURN ON INVESTMENTINSTITUTIONAL FRAMEWORK FOR GOVERNMENT DEBT MANAGEMENTEffective governanceEffective organizational structureEffective operational structureEffective management of information systemsStaff recruitment and monitoringRENEGOTIATING DEBT CONTRACTDEBT-RELIEF POLICIESDESIGNING INCENTIVESSOVEREIGN DEBT RESTRUCTURINGStylized factsWhen are debts restructured?The debt restructuring processMethods of debt restructuringRISK MANAGEMENT FRAMEWORK FOR GOVERNMENT DEBT PORTFOLIODEBT SUSTAINABILITY ANALYSIS AND MEDIUM-TERM DEBT STRATEGYDebt sustainability analysisHow DSA are conductedMedium-term debt strategyCONCLUSIONDiscussion questionsNotesReferencesFinancial inclusion and economic growthINTRODUCTIONCONCEPTUALISING FINANCIAL INCLUSIONTRENDS IN FINANCIAL INCLUSIONDETERMINANTS OF AND BARRIERS TO FINANCIAL INCLUSIONSupply factorsDemand-side factorsINCLUSIVE FINANCE AND FINANCIAL DEVELOPMENTINCLUSIVE FINANCE AND ECONOMIC GROWTHThe financial inclusion-economic growth transmission channelsEmpirical evidence on financial inclusion and inclusive growth and developmentFINANCIAL INCLUSION AND ECONOMIC DEVELOPMENT: ROLE OF INSTITUTIONSCONCLUSIONDiscussion questionsNotesReferencesFinancing agriculture for inclusive developmentINTRODUCTIONSTYLIZED FACTS OIM AGRICULTURE DEVELOPMENTStylized fact 1Stylized fact 2Stylized fact 3Stylized fact 4Stylized fact 5Stylized fact 6CHALLENGES OF AGRICULTURAL FINANCINGFunding challenges of plantation and animal agricultureFINANCING OPPORTUNITIES IN AGRICULTUREINNOVATIVE FINANCING MODELS FOR AGRICULTURE4Financing farmers and agricultural entrepreneursFinancing movable assetsFinancing agriculture value chainsFinancing agriculture by using capital market vehiclesRisk managementFinancing agriculture through savingsFinancing agriculture through foreign direct investment (FDI)Digital financial and agricultural developmentOVER-INDEBTEDNESS IN AGRICULTUREAGRICULTURE FINANCE PLUSROLE OF GOVERNMENT IN AGRICULTURAL FINANCINGCONCLUSIONDiscussion questionsNotesReferencesAgriculture value added per worker (constant 2010 USD)Financing sustainable development: New insights for the present and the futureINTRODUCTIONOVERVIEW OF SUSTAINABLE DEVELOPMENTThe Millennium Development GoalsFrom MDGs to SDGsCHALLENGES OF FINANCING SUSTAINABLE DEVELOPMENTSustainable citiesFood security and nutritionEnergy transformationDecent jobsOther financing challengesBENEFITS OF FINANCING SUSTAINABLE DEVELOPMENTSOURCES OF FINANCING SUSTAINABLE DEVELOPMENTEnvironmental financeCLIMATE FINANCEBIODIVERSITY AND ECOSYSTEM FINANCINGRENEWAL ENERGY FINANCEPrivate sector financeRESPONSIBLE PRIVATE FINANCEBLENDED FINANCEInnovative sources of finance for sustainable developmentINTERNATIONAL FINANCE FACILITYIMF SPECIAL DRAWING RIGHTS GLOBAL LOTTERYFinancing healthCONCLUSIONDiscussion questionsReferencesInternational trade, finance, and developmentINTRODUCTIONEXCHANGE RATESFORWARD-LOOKING MARKETSINTEREST RATE PARITYTHE POLICY TRILEMMAEXCHANGE RATE POLICYGold standard (±1870-1914)World wars and recession (1914-1945)Bretton Woods (1945-1971)Floating rates (1971-present)Current exchange rate regimesTRADE FINANCEINTERNATIONAL CURRENCIESFINANCE, INVESTMENT, AND DEVELOPMENTCONCLUSIONSNotesReferencesInfrastructure financing and economic developmentINTRODUCTIONCHALLENGES AND OPPORTUNITIES FOR INFRASTRUCTURE DEVELOPMENTChallengesOpportunitiesMULTIPLIER EFFECTS OF INFRASTRUCTURE DEVELOPMENT ON ECONOMIC DEVELOPMENTFINANCING INFRASTRUCTURE DEVELOPMENTTraditional versus private investmentVarious financial instrumentsPublic-private partnership financing structuresBUILD-OPERATE-TRANSFER (ВОТ) MODELBUILD-TRANSFER-OPERATE (BTO) MODELBUY-BUILD-OPERATE (BBO) MODELLEASE-DEVELOP-OPERATE (LDO) MODELPERPETUAL FRANCHISE MODELWRAPAROUND ADDITIONTEMPORARY PRIVATISATIONSPECULATIVE DEVELOPMENTVALUE CAPTUREUSE-REIMBURSEMENT MODELINSTITUTIONAL FRAMEWORK FOR PRIVATE PARTICIPATION IN INFRASTRUCTURE DEVELOPMENTLEGAL FRAMEWORKS AND INVESTMENT INCENTIVESRISK MANAGEMENT OF INFRASTRUCTURE PROJECTSIdiosyncratic risks to infrastructural development in developing countriesRisk analysis and risk mitigation strategiesCONCLUSIONQuestionsReferencesFinance and economic development: The role of the private sectorINTRODUCTIONOVERVIEW OF PRIVATE SECTOR AND ECONOMIC DEVELOPMENTFeatures of Africa's private sectorThe role of the private sector in economic developmentObstacles to private sector developmentWHAT EXPLAINS FIRMS' FINANCING AND INVESTMENT BEHAVIOUR?Factors influencing financing behaviourFactors influencing investment behaviourDEVELOPMENT FINANCE, PRIVATE SECTOR DEVELOPMENT, AND ECONOMIC DEVELOPMENTPrivate equity and venture capital financingStructured trade financeProject finance for infrastructure developmentExternal capital inflowsOther innovative sources of financingCROWDFUNDINGGREEN, SOCIAL, AND SUSTAINABILITY BONDS (GSSBS)LEASING AND FACTORINGCONCLUSIONDiscussion questionsReferences
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