Access to foreign capital is key for private sector and government investment and thus for economic growth in developing countries lacking strong domestic financial systems. But openness brings risks, as the financial crises of the past decade have shown. CGD Senior Fellow Liliana Rojas-Suarez examines the impacts of financial regulations on capital account volatility, as well as mechanisms to further domestic financial deepening in emerging markets to prevent instability and enable growth. The Center’s research also deals with approaches to crisis resolution and the potential of foreign direct investment to promote growth.
Access to foreign capital is key for private sector and government investment and thus for economic growth in developing countries lacking strong domestic financial systems. But openness brings risks, as the financial crises of the past decade have shown. CGD Senior Fellow Liliana Rojas-Suarez examines the impacts of financial regulations on capital account volatility, as well as mechanisms to further domestic financial deepening in emerging markets to prevent instability and enable growth. The Center’s research also deals with approaches to crisis resolution and the potential of foreign direct investment to promote growth.
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This paper explores the impact of international financial integration on credit markets in Latin America. The overall effect is positive, but the foreign banks do tend to amplify the impact of foreign shocks on credit and interest rates. Important policy recommendations include ring-fencing mechanisms, early-warning systems, and the incorporation for agreements between domestic and foreign supervisors.
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This paper presents lessons derived from the 2008–09 financial crisis for Latin America and developing countries in other regions that might seek economic growth in the context of greater integration to the international capital markets.
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Kemal Derviş delivers the Fourth Annual Richard H. Sabot Lecture on June 11, 2009.
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The CGD Task Force on Access to Financial Services proposes 10 principles for financial-sector policymakers—including national authorities, donors, private-sector participants, international financial institutions, and others—on the facilitation, regulation, and direct provision of financial services.
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The World Trade Organization’s collapsed Doha Round focused on issues of limited significance while the burning issues of the day were not even on the agenda. In this new working paper, CGD senior fellow Arvind Subramanian and co-author Aaditya Mattoo argue for a wider agenda for multilateral cooperation that includes such issues as food, energy, economic security, and the prevention and resolution of future financial crises.
LEARN MORE
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In this CGD Essay, visiting fellow Nancy Lee provides the full details and policy recommendations for a strategy of regional investment integration in the Americas. The essay, excerpted from her chapter in the forthcoming White House and the World: A Global Development Agenda for the Next U.S. President, builds on a previously published CGD Note by specifying the scope of the proposed agreement, outlining its expected gains, and identifying the initial steps the United States could take to encourage a fresh agreement to be reached.
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Unlike East Asia and Europe, Latin America lacks a shared integration strategy and continues to struggle with a burdensome investment climate. In this new CGD Note, visiting fellow Nancy Lee suggests a fresh approach to regional integration in the form of a proposed regional investment agreement. The idea is a collective effort to set common standards for reducing specific barriers to domestic and foreign investment. Beyond its benefits for growth, such an agreement could boost the incomes of the poor by helping small businesses trapped in the informal sector move into the more productive formal sector.
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Two aspects of global imbalances -- undervalued exchange rates and sovereign wealth funds -- require a multilateral response. For reasons of inadequate leverage and eroding legitimacy, the International Monetary Fund has not been effective in dealing with undervalued exchange rates. In this working paper, CGD senior fellow Arvind Subramanian and his co-author propose new rules in the World Trade Organization to discipline cases of significant undervaluation that are clearly attributable to government action. Placing exchange rates and sovereign wealth funds on the trade negotiating agenda may help revive the Doha Round by rekindling the interest of a wide variety of groups, many of whom are currently disengaged from the round.
Learn More
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Access to financial services -- ranging from credit to the use of electronic means of payment -- is crucial for growth and poverty reduction. This new working paper by CGD senior fellow Liliana Rojas-Suarez tells why access to financial services is low in Latin America and suggests innovative solutions. Among the recommendations: public-private partnerships to improve financial literacy; training specialized juries to adjudicate financial disputes in ways that protect the rights of borrowers and creditors; and regulatory changes to speed the spread of technology offering financial services to low-income families and small firms.
Learn more
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How do people escape poverty? In this working paper, CGD senior fellow Peter Timmer and his co-authors describe pathways out of poverty in Indonesia from 1993 to 2000, a period of economic and political turmoil. They find that most rural poor people who escaped poverty did so without moving to cities. From this experience they distill three policy recommendations: boost agricultural productivity, improve the investment climate for the rural non-agricultural sector, and make education a cornerstone of the government anti-poverty strategy. Learn more
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This paper presents lessons derived from the 2008–09 financial crisis for Latin America and developing countries in other regions that might seek economic growth in the context of greater integration to the international capital markets.
-
This paper explores the impact of international financial integration on credit markets in Latin America. The overall effect is positive, but the foreign banks do tend to amplify the impact of foreign shocks on credit and interest rates. Important policy recommendations include ring-fencing mechanisms, early-warning systems, and the incorporation for agreements between domestic and foreign supervisors.
-
The CGD Task Force on Access to Financial Services proposes 10 principles for financial-sector policymakers—including national authorities, donors, private-sector participants, international financial institutions, and others—on the facilitation, regulation, and direct provision of financial services.
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Kemal Derviş delivers the Fourth Annual Richard H. Sabot Lecture on June 11, 2009.
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A Better Globalization: Legitimacy, Governance, and Reform by Kemal Dervis is a reformist manifesto that argues that gradual institutional change can produce beneficial results if it is driven by an ambitious long-term vision and by a determination to continually widen the limits of the possible.
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Nigeria has $33 billion in external debt. The government has been trying unsuccessfully for years to cut a deal with creditors to reduce its external obligations but to date has only managed to gain non-concessional restructuring. The major creditors also have good reasons for wanting to seek a resolution, yet agreement has been elusive. Fortunately, there is a brief window of opportunity in 2005 to find a compromise that can meet the needs of both sides. This note briefly outlines a proposal for striking such a deal through a discounted debt buyback.
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As Zimbabwe careens out of control, Robert Mugabe and the international community are both pointing fingers — mostly at each other. Todd Moss and Michael Clemens of the Center for Global Development argue that Zimbabwe’s current economic malaise has been made much worse by the country’s political tensions and the mismanagement by those in power.
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In this CGD Essay, visiting fellow Nancy Lee provides the full details and policy recommendations for a strategy of regional investment integration in the Americas. The essay, excerpted from her chapter in the forthcoming White House and the World: A Global Development Agenda for the Next U.S. President, builds on a previously published CGD Note by specifying the scope of the proposed agreement, outlining its expected gains, and identifying the initial steps the United States could take to encourage a fresh agreement to be reached.
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This paper ties together the macroeconomic and microeconomic evidence on the competitiveness of African manufacturing sectors. The conceptual framework is based on the newer theories that see the evolution of comparative advantage as influenced by the business climate—a key public good—and by external economies between clusters of firms entering in related sectors. Macroeconomic data from purchasing power parity (PPP), though imprecisely measured, estimates confirms that Africa is high-cost relative to its levels of income and productivity. This finding is compared with firm-level evidence from surveys undertaken for Investment Climate Assessments in 2000-2004.
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From Foreign Affairs, Volume 83 No. 4
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Nancy Birdsall, President An internationally recognized expert on the impact of rich-country policies on poor people in developing countries, Nancy Birdsall is the author, co-author, or editor of more than a dozen books and over 100 articles in scholarly journals and monographs, published in English and Spanish. Her most recent book is Cash on Delivery: A New Approach to Foreign Aid.
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Michael Clemens, Research Fellow Research Fellow Michael Clemens leads CGD’s Migration and Development initiative. This work investigates how rich countries’ regulation of international movement by people from poor countries shapes the lives of the people who move as well as those who do not.
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William R. Cline, Senior Fellow William R. Cline is a senior fellow jointly at the Peter G. Peterson Institute for International Economics and the Center for Global Development. His research focuses on finance, capital flows, trade and development; currently he is investigating the differential impact of global warming on agriculture in rich and developing countries.
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Ricardo Hausmann, Non-Resident Fellow Ricardo Hausmann is Professor of the Practice of Economic Development at Harvard University's Kennedy School of Government. Previously, he served as the first Chief Economist of the Inter-American Development Bank (1994-2000), where he created the Research Department.
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Ethan Kapstein, Visiting Fellow Ethan Kapstein is a visiting fellow at CGD and Paul Dubrule Professor of Sustainable Development at INSEAD. Prior to this, Kapstein was Stassen Professor of International Peace at the Humphrey Institute of Public Affairs and Dept. of Political Science at the University of Minnesota (1996-2003). He has also served as vice president and director of studies at the Council on Foreign Relations. His latest book, The Fate of Young Democracies, co-authored with Nathan Converse, is available through Cambridge University Press.
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Michael Kremer, Non-Resident Fellow Michael Kremer is the Gates Professor of Developing Societies in the department of economics at Harvard University, senior fellow at the Brookings Institution, and non-resident fellow at the Center for Global Development. Kremer’s recent research examines education and health in developing countries, immigration, and globalization.
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Carol J. Lancaster, Non-Resident Fellow Carol Lancaster is Director of the Mortara Center for International Studies at Georgetown University's School of Foreign Service. Before joining the Georgetown faculty in 1996, Professor Lancaster served three years as Deputy Administrator of the U.S. Agency for International Development.
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Todd Moss, Vice President for Corporate Affairs, and Senior Fellow Todd Moss works on U.S.-Africa relations and financial issues facing sub-Saharan Africa, including policies that affect private capital flows, natural resource management, debt, and aid.
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Liliana Rojas-Suarez, Senior Fellow An expert on Latin America and on financial services and the development impact of global financial regulation, Liliana Rojas-Suarez combines Wall Street and multilateral development bank experience, having worked as chief economist for Latin America at Deutsche Bank, as principal economist at the Inter-American Development Bank, and in senior research roles at the IMF. Her commentary leads CGD’s extensive package of analysis on the development impact of the U.S. financial crisis.
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Policy Principles for Expanding Financial Access
- Sep 30, 2009
The CGD Task Force on Access to Financial Services proposes 10 principles for financial-sector policymakers—including national authorities, donors, private-sector participants, international financial institutions, and others—on the facilitation, regulation, and direct provision of financial services.
-
Multilateralism Beyond Doha - Working Paper 153
- Oct 9, 2008
The World Trade Organization’s collapsed Doha Round focused on issues of limited significance while the burning issues of the day were not even on the agenda. In this new working paper, CGD senior fellow Arvind Subramanian and co-author Aaditya Mattoo argue for a wider agenda for multilateral cooperation that includes such issues as food, energy, economic security, and the prevention and resolution of future financial crises.
LEARN MORE
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Integration in the Americas: One Idea for Plan B (Essay)
- Jun 16, 2008
In this CGD Essay, visiting fellow Nancy Lee provides the full details and policy recommendations for a strategy of regional investment integration in the Americas. The essay, excerpted from her chapter in the forthcoming White House and the World: A Global Development Agenda for the Next U.S. President, builds on a previously published CGD Note by specifying the scope of the proposed agreement, outlining its expected gains, and identifying the initial steps the United States could take to encourage a fresh agreement to be reached.
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Integration in the Americas: One Idea for Plan B (Note)
- Jun 3, 2008
Unlike East Asia and Europe, Latin America lacks a shared integration strategy and continues to struggle with a burdensome investment climate. In this new CGD Note, visiting fellow Nancy Lee suggests a fresh approach to regional integration in the form of a proposed regional investment agreement. The idea is a collective effort to set common standards for reducing specific barriers to domestic and foreign investment. Beyond its benefits for growth, such an agreement could boost the incomes of the poor by helping small businesses trapped in the informal sector move into the more productive formal sector.
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Currency Undervaluation and Sovereign Wealth Funds: A New Role for the World Trade Organization - Working Paper 142
- Feb 28, 2008
Two aspects of global imbalances -- undervalued exchange rates and sovereign wealth funds -- require a multilateral response. For reasons of inadequate leverage and eroding legitimacy, the International Monetary Fund has not been effective in dealing with undervalued exchange rates. In this working paper, CGD senior fellow Arvind Subramanian and his co-author propose new rules in the World Trade Organization to discipline cases of significant undervaluation that are clearly attributable to government action. Placing exchange rates and sovereign wealth funds on the trade negotiating agenda may help revive the Doha Round by rekindling the interest of a wide variety of groups, many of whom are currently disengaged from the round.
Learn More
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The Provision of Banking Services in Latin America: Obstacles and Recommendations - Working Paper 124
- Jun 25, 2007
Access to financial services -- ranging from credit to the use of electronic means of payment -- is crucial for growth and poverty reduction. This new working paper by CGD senior fellow Liliana Rojas-Suarez tells why access to financial services is low in Latin America and suggests innovative solutions. Among the recommendations: public-private partnerships to improve financial literacy; training specialized juries to adjudicate financial disputes in ways that protect the rights of borrowers and creditors; and regulatory changes to speed the spread of technology offering financial services to low-income families and small firms.
Learn more
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Pathways Out of Poverty During an Economic Crisis: An Empirical Assessment of Rural Indonesia - Working Paper 115
- Mar 14, 2007
How do people escape poverty? In this working paper, CGD senior fellow Peter Timmer and his co-authors describe pathways out of poverty in Indonesia from 1993 to 2000, a period of economic and political turmoil. They find that most rural poor people who escaped poverty did so without moving to cities. From this experience they distill three policy recommendations: boost agricultural productivity, improve the investment climate for the rural non-agricultural sector, and make education a cornerstone of the government anti-poverty strategy. Learn more
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As Zimbabwe careens out of control, Robert Mugabe and the international community are both pointing fingers — mostly at each other. Todd Moss and Michael Clemens of the Center for Global Development argue that Zimbabwe’s current economic malaise has been made much worse by the country’s political tensions and the mismanagement by those in power.
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From the Financial Times
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From Foreign Policy Magazine, February 2005
Shortly after a tsunami swept through the Indian Ocean last December, a U.N. official complained that the West was "stingy" with its relief donations. Stung by this criticism, the Bush administration increased its financial pledge tenfold overnight—while loudly asserting that the United States actually led the global pack in foreign aid. Is the world’s wealthiest country a scrooge or a savior?
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From Foreign Affairs, Volume 83 No. 4
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