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Views from the Center

CGD experts offer ideas and analysis to improve international development policy. Also check out our Global Health blog and US Development Policy blog.

 

Pile of Euros. Adobe Stock.

The Wise Persons Group Report on Europe’s Development Finance Architecture: Merger, Acquisition, or Reinvention?

Earlier this month, the long-awaited report on the future of the European financial architecture for development was released. Are the report’s proposals feasible? And crucially, do they offer a magic bullet to the intractable state of the European development finance system? I argue that although some of the proposals go some way towards offering a solution to the current problem, politics will undoubtedly trump logic, and we will—at least in the near future—be left with a stalemate.

A woman raises her hand to speak at a community meeting in Aurangabad, India. Photo by Simone D. McCourtie, World Bank

Money Can’t Buy You “Country Ownership”

Efforts to make aid more effective in the last two decades have given prominence to "country ownership." With true country ownership, aid is supposed to follow the priorities of recipient countries, rather than those of the funders. Yet funders have their priorities too. So recipients and funders have sought to resolve this potential conflict through policy dialogue and alignment of priorities. My new paper, "What is 'Country Ownership'?" explores this basic problem using a formal model to unravel three interrelated factors affecting country ownership.

An industrial welder at work. Adobe Stock

Netflix’s “American Factory” and the New Geography of Manufacturing

Perhaps the most surprising was how similar these scenes playing out in America are to those I’ve seen in Africa. To be sure, many of the factories I visited in Africa were smaller-scale and simpler in their operations than the Ohio glass plant in American Factory. But some Chinese-owned factories in Africa are similarly large-scale and technologically advanced, and no matter the size of the factory, I witnessed many of the same struggles to find cross-cultural understanding, to teach workers genuinely difficult skills, and to withstand the pressure of a highly competitive, global industry.

Philippe Le Houérou at the WEF. Photo by World Economic Forum / Jakob Polacsek

Aid Transparency and Subsidies to Private Companies: A First Step, But a Long Road Ahead

Today the IFC announced a step forward in its transparency around the use of aid resources to finance private companies. That’s right and proper: When scarce aid, and scarce tax resources, are used to support private firms, citizens of donor countries and recipient countries alike have a right to know where the money is going to and how generous the terms. A number of us at CGD had been calling for greater transparency around subsidies to the private sector from the IFC and other development finance institutions, so this is a welcome first step. However, a few aspects have might be cause for concern.

An image showing money with relation to subsidies

Introducing Five Principles for the Use of Aid in Subsidies to the Private Sector

Development finance institutions like the International Finance Corporation and the UK’s CDC Group use public finance to support private investments in developing countries. At their best they can help create new markets and invest in the delivery of vital goods and services, creating good jobs and entrepreneurial opportunity along the way. They have been rapidly expanding over the past few years.

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