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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.

 

Still from video on Stretch Fund.

Introducing the "Stretch Fund"

When the world adopted the 2030 Sustainable Development Goals (SDGs), policymakers knew that aid alone would never meet the financing needs. In a new paper, we are proposing the Stretch Fund, to partner with DFIs. The Stretch Fund would “stretch” the capital of existing DFIs in two ways: by expanding the spectrum of investments in which DFIs can participate; and by taking on high-risk tranches to open up more DFI investment opportunities.

Panoramic view of Bogota, Colombia

The Interdependence Between Multilateral Development Banks and Middle-Income Countries

Every MDB is now confronted with the question of what to do with middle-income countries, given the need to focus on the Sustainable Development Goals in general, but very concretely on goal #1—poverty eradication—which will be difficult to achieve based on recent trends. MDBs are very important for MICs, but at the same time MICs are vital for MDBs. This is essentially a two-way relationship. Without MICs, MDBs will be less innovative, will have less knowledge and, importantly, will require more capital from shareholders. I will explain why I believe so in this short note.

Chart showing IFC project ratings

Is the New Model IFC a Good Deal for IDA Countries?

For much of the last decade, the World Bank’s private sector arm, the International Finance Corporation (IFC), has delivered a share of its profits as grants to the World Bank Group’s soft lending arm for governments, the International Development Association (IDA). In the last couple of years that pattern has reversed.

Cash and coins on a blank surface

Financing Options for Low-Income Countries

The global narrative on development finance centers on enabling all countries to achieve the Sustainable Development Goals (SDGs) by 2030. This cascades into a set of questions about how much financing is needed, how it should be mobilized, and how it will be used. While the SDGs motivate action and have a reasonable prospect of being met in middle-income developing countries, achieving the SDGs in low-income countries (LICs), which have further to travel and more binding resource and institutional constraints, will be harder. The challenge will be most acute in Africa, where pockets of absolute poverty are increasingly concentrated and environmental degradation and conflict add to state fragility.  

Cranes in Vietnam

Trillions for the SDGs? Time for a Rethink

In 2015, the world enthusiastically signed on to the challenge of transforming billions to trillions of dollars of private finance for the Sustainable Development Goals (SDGs). The idea was to use public and private development aid to unlock much more commercial private finance for sustainable growth and poverty reduction in developing countries.