International Financial Institutions

This paper investigates the scale and scope of emerging donors and ways the international donor community could encourage their greater transparency and accountability.

Nancy Birdsall urges Senator Leahy to support approval by the United States of the proposed new lending instrument at the World Bank, Program for Results Financing (P4R).

This brief on the Regional Development Banks is one of a suite of policy briefs that provides basic background information and practical analysis of the financial and governance issues facing the international financial institutions.

This brief on the International Finance Corporation is one of a suite of policy briefs that provides basic background information and practical analysis of the financial and governance issues facing the international financial institutions.

This brief on the IMF is one of a suite of policy briefs that provides basic background information and practical analysis of the financial and governance issues facing the international financial institutions.

This brief on the General Capital Increase is one of a suite of policy briefs that provides basic background information and practical analysis of the financial and governance issues facing the international financial institutions.

This brief on the World Bank is one of a suite of policy briefs that provides basic background information and practical analysis of the financial and governance issues facing the international financial institutions.

This brief on leadership selection at the international financial institutions is one of a suite of policy briefs that provides basic background information and practical analysis of the financial and governance issues facing the IFIs.

David Wheeler analyzes the results of CGD's online survey on selecting the IMF managing director

Ben Leo testified before the House Subcommittee on International Monetary Policy and Trade on July 27, 2011 about the importance of multilateral development banks to the United States and the greater world.

This paper provides a review of the rationale for and against SME initiatives and an overview of existing targeted USG and IFI programs. The authors offer several new incremental options for private foundations to establish focused partnerships with donor agencies in their efforts to assist SMEs in...

Private sector lending by international financial institutions (IFIs) is soaring. Guillermo Perry finds it’s a mixed bag and suggests improvements, including more support to small and medium firms and avoidance of procyclical lending.

Guillermo Perry assesses whether arguments in favor of such MDB direct support are valid and whether MDBs are living up to priorities coherent with such arguments and finds that they do so only partially.

Most of the world’s poor no longer live in low-income countries. An estimated 960 million poor people—a new bottom billion—live in middle-income countries, a result of the graduation of several populous countries from low-income status. That is good news, but it has repercussions. Donors will...

By 2025, the number of IDA client countries will likely shrink substantially and primarily be smaller in size and overwhelmingly African. This working paper predicts how these changes will impact IDA's operational and financial models and recommends the World Bank begin addressing the implications...

This paper offers a proposal to improve performance-based allocation systems of International Development Association (IDA) donors and others to better address the needs of fragile states and better link development allocations with performance.

Kenneth Rogoff delivers the Fifth Annual Richard H. Sabot Lecture on April 12, 2010.

Severino and Ray envision a new conceptual framework to manage the complexity of current international collaboration in development assistance.

As the International Development Association (IDA) pushes for more funding for the neediest and most vulnerable countries, visiting fellow Ben Leo examines whether IDA’s existing performance-based allocation system (PBA) gives the developing world its fair share of funds. He says the system...

In this short essay, senior fellow David Wheeler compares the world’s foreign assistance architecture to how the rest of the world operates in the digital age. He suggests that multilateral and bilateral transactions from one behemoth to another may be stuck in the past now that technology can...

After dramatically increasing their lending during the global financial crises, the international financial institutions are requesting an unusual General Capital Increase. Senior fellow Todd Moss and co-authors explain what this means—and why it’s important.

CGD research fellow Ben Leo estimates that the World Bank could provide an extra $7.5 billion to the poorest countries over the next three years by adjusting the balance sheets of IDA and IBRD, its main lending arms.

Against the backdrop of the fast approaching Millennium Development Goals deadline, World Bank shareholders have an opportunity to dramatically increase resources available for the poorest, most vulnerable countries. By better leveraging the IBRD’s balance sheet for creditworthy blend and...

The next U.S. president has a great opportunity to lead regional economic integration in the Americas, to the benefit of both the United States and Latin America. For the Americas, the high hopes of a decade ago for a hemispheric trade agreement have faded, along with confidence in the...

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...

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...

U.N. Secretary General Ban Ki-moon called for a revolutionary change in the world's energy mix. So why is the World Bank conducting business as usual? This new working paper by CGD senior fellow David Wheeler focuses on the bank's latest proposed venture, a huge coal-fired plant to be fueled by the...

In this CGD Essay, Birdsall and Subramianian argue that the World Bank faces twin crises of relevance and legitimacy in a rapidly changing world. The solution, they argue, is for the bank to become a more active catalyst for generating global public goods and knowledge and a more reluctant lender...

This CGD brief summarizes the results of the 2007 Commitment to Development Index (CDI), which ranks 21 of the world's richest countries on their dedication to policies that benefit the five billion people living in poorer nations. The Netherlands comes in first on the 2007 CDI on the strength of...

Paul Collier's new book, The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It, argues that many developing countries are doing just fine and that the real development challenge is the 58 countries that are economically stagnant and caught in one or more "traps":...

This report of the CGD working group on IMF Programs and Health Spending explores the controversy that surrounds IMF-supported programs in low-income countries and their effect on the health sector. Critics contend that programs unduly constrain health spending though macroeconomic, especially...

This brief summarizes the findings of the CGD working group on IMF Programs and Health Spending, convened in fall 2006 to investigate the effect of International Monetary Fund (IMF) programs on health spending in low-income countries. The report offers clear, practical recommendations for...

Chinese foreign aid is rising fast and Western aid agencies are concerned: will Chinese aid undermine efforts to promote reform in Africa and elsewhere? Will Chinese loans burden poor countries with fresh debt? In this new essay, CGD visiting fellow Carol Lancaster provides a concise and accessible...

CGD's online survey of views on selecting the World Bank's next president received nearly 700 responses from people representing 71 nations; all world regions; high-, middle- and low-income countries; a variety of professional affiliations; and all adult age groups. In a new working paper analyzing...

This CGD working group report offers five practical recommendations for strengthening the International Development Association (IDA)--the World Bank's soft-loan facility for the world's poorest countries--as donors begin replenishment talks that will shape IDA's course from mid-2008 through...

In this Essay, CGD president Nancy Birdsall describes the World Bank as a global club with a structure close to that of a credit union in which the members are nations. Its mission, as originally conceived–-to promote broadly shared and sustainable global prosperity--serves the common interests...

This paper examines IMF projections of donor aid to low-income countries and whether these projections changed after world leaders pledged at the 2005 Gleneagles G8 summit to double aid to Africa by 2010. The authors find that IMF projections since the post-Gleneagles Summit have shown little...

Does aid to Africa undermine the emergence of a robust African middle class? If so, what can be done about it? In this new working paper, CGD president Nancy Birdsall argues that high and unpredictable aid flows could be making life harder for Africa's small and medium-sized businesses by, for...

China's bid for a leading role in Africa gained sudden visibility on the weekend with an unprecedented gathering of leaders from 48 African countries in Beijing. Chinese president Hu Jintao pledged to double aid and to offer $5 billion in loans by 2009. China's newly high-profile overtures...

In this CGD Note, CGD vice president Dennis de Tray and senior fellow Todd Moss argue that international financial institutions should transform their boards of resident executive directors into non-resident, non-executive bodies. Doing so would force the governing bodies to focus on their core...

Donald Kaberuka, the new president of the African Development Bank, leads an institution whose financial standing has been restored from the near collapse of 1995, but whose operational credibility remains a work-in-progress. This CGD working group report offers external, independent advice to...

Critics allege that the World Bank is deeply flawed. Yet the world needs a strong World Bank to help manage development and the related global challenges of the 21st century. Do the Bank's shortcomings put its future at risk? If so, can the Bank be rescued? Rescuing the World Bank, a new book that...

It is sometimes claimed that big surges in aid might cause Dutch Disease--an appreciation of the real exchange rate which can slow the growth of a country's exports--and that aid increases might thereby harm a country's long-term growth prospects. In this new working paper CGD senior program...

When aid projects proliferate, donors often seek better oversight through smaller projects. While this may improve administration, it burdens recipient governments with reporting requirements and donor visits. CGD research fellow David Roodman suggests in a new working paper that big projects are...

U.S. "development assistance" refers to the transfer of resources from the United States to developing countries and to some strategic allies. It is delivered in the form of money (via loans or grants), contributions of goods (such as food aid), and technical assistance. Learn more about Rich...

Each year billions of dollars are spent on thousands of programs to improve health, education and other social sector outcomes in the developing world. But very few programs benefit from studies that could determine whether or not they actually made a difference. This absence of evidence is an...

This brief outlines the problems that inhibit learning in social development programs, describes the characteristics of a collective international solution, and shows how the international community can accelerate progress by learning what works in social policy. It draws heavily on the work of...

The World Bank and IMF are two of the three institutional pillars of globalization, and today they face compelling trends pushing them to change. In this CGD Brief, Ngaire Woods, author of The Globalizers: The IMF, the World Bank, and Their Borrowers, describes those trends and offers practical...

CGD senior fellow Steven Radelet discusses how the IMF can be helpful to low-income countries that have maintained macroeconomic stability for several years and no longer require IMF financing. He suggests that the Fund move toward greater use of non-funded programs and play a less dominant role in...

Nancy Birdsall and Kemal Dervis propose that a "Stability and Social Investment Facility" be housed either at the IMF or the World Bank to offer emerging market economies with high debt-burdens lonas on a concessional basis. Read this CGD Working Paper to see how this Facility would be a useful...

This new report by a group comprising several of Latin America's most influential economic policymakers, CGD senior fellow Liliana Rojas Suarez, and CGD president Nancy Birdsall suggests ways for the IDB to become more flexible and to step up its support for market oriented reforms. The IDB's new...

The international goal for rich countries to devote 0.7% of their national income to development assistance has become a cause célèbre for aid activists and has been accepted in many official quarters as the legitimate target for aid budgets. The origins of the target, however, raise serious...

Nancy Birdsall testified in front of a subcommittee of the House Committee on Financial Services concerning debt relief and IMF gold.

This report was prepared by a Working Group convened by the Center for Global Development to identify key priorities the Paul Wolfowitz at the start of his tenure at the World Bank on June 1, 2005. It argues that Wolfowitz's biggest challenge will not be managing the Bank, with its 10,000 staff,...

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...

This new CGD Note by Center for Global Development President Nancy Birdsall and Institute for International Economics Senior Fellow John Williamson argues that sale of a portion of IMF gold makes sense as a way to create a more transparent institution and use a global resource for debt relief for...

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.

This paper considers what role pull instruments or challenge programs (such as the World Bank's Poverty Reduction Support Credits or the United States' Millennium Challenge Account) could play within the overall framework of foreign aid, asking how they could be designed to function as effective...

This brief summarizes five key recommendations from the CGD book A Better Globalization: Legitimacy, Governance, and Reform by Kemal Dervis. It presses for reform on a broad front with a renewed, more legitimate, and more effective United Nations as the overarching framework for global governance...

The historic 2002 United Nations Conference on Financing for Development in Monterrey, Mexico, overlooked a crucial question: regionalism. Financing Development: The Power of Regionalism is designed to correct this omission.

In 1999, the United States and other major donor countries supported an historic expansion of the heavily indebted poor country (HIPC) debt relief initiative. Three years after the initiative came into existence, we are beginning to see the apparent impact that HIPC is having, particularly on...

Nigeria is currently classified by the World Bank as a ‘blend’ country, making it the poorest country in the world that does not have ‘IDA-only’ status. This paper uses the World Bank’s own IDA eligibility criteria to assess whether Nigeria has a case for reclassification.

Testimony before the Senate Foreign Relations Committee

*REVISED Version September 2004 The Millennium Development Goals (MDGs) are unlikely to be met by 2015, even if huge increases in development assistance materialize. The rates of progress required by many of the goals are at the edges of or beyond historical precedent. Many countries making...

This paper focuses on key ways in which donors can improve the quality of foreign assistance and make it more effective in achieving the Millennium Development Goals (MDGs).

Poverty reduction is now, and quite properly should remain, the primary objective of the World Bank. But, when the World Bank dreams of a world free of poverty—what should it be dreaming? I argue in this essay that the dream should be a bold one, that treats citizens of all nations equally in...

*REVISED Version May 2007Recent literature contains many stories of how foreign aid affects economic growth: aid raises growth in countries with good policies, or in countries with difficult economic environments, or mainly outside the tropics, or on average with diminishing returns. The diversity...

The Burnside and Dollar (2000) finding that aid raises growth in a good policy environment has had an important influence on policy and academic debates. We conduct a data gathering exercise that updates their data from 1970-93 to 1970-97, as well as filling in missing data for the original period...

In this paper I set out the economic logic for why good global economic governance matters for reducing poverty and inequality and argue that a step towards better global governance would be better representation of developing countries in global and regional financial institutions.

What should the World Bank optimally do with the US$10 to $20 billion it can loan each year? Has it, in fact, done what is optimal? This study suggests a simple framework within which to measure the World Bank against an optimal international public financier for development. It goes on to argue...

Public policy on financial crises in emerging markets has implicitly been grounded in economic theory calling for lender-of-last-resort intervention when the country is solvent, and on theory recognizing that reputational damage is the quasi-collateral enabling lending to sovereigns with no...

The paper addresses three key issues raised by the G-7 in its proposals to reform the multilateral banks, in 2001. One, the restructuring of IDA with a part of its lending in the form of grants rather than loans. Two, the harmonization of procedures, policies and overlapping mandates among MDBs....

One feature of adjustment loans that has been often overlooked in their evaluation is their frequent repetition to the same country, with such extremes as the 30 IMF and World Bank adjustment loans to Argentina over 1980-99 or the 26 adjustment loans to Cote d'Ivoire and Ghana. Repetition changes...

The IMF uses its well-known "financial programming" model to derive monetary and fiscal programs to achieve desired macroeconomic targets in countries undergoing crises or receiving debt relief. Financial programming is based on monetary, balance of payments, and fiscal accounting identities. This...

In this paper we argue that neither the level nor the change in a country's trade/GDP ratio can be taken as an indication of the "openness" of a country's trade policy. In particular, we examine the ways in which terms of trade shifts have affected trade/GDP ratio over the past two decades, and...

This study brings readers up to date on the complicated and controversial subject of debt relief for the poorest countries of the world.

Over the last several years, the United States and other major donor countries have supported a historic initiative to write down the official debts of a group of heavily indebted poor countries, or HIPCs. Donor countries had two primary goals in supporting debt relief: to reduce countries' debt...

The tragedy of foreign aid is not that it didn't work; it was never really tried. A group of well-meaning national and international bureaucracies dispensed foreign aid under conditions in which bureaucracy does not work well. The hostile environment under which such aid agencies functioned induced...