Ideas to Action:

Independent research for global prosperity

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.

 

Getting to Yes on a World Bank Recapitalization

World Bank President Jim Kim is hoping the bank’s 189 shareholders will agree to increase the current capital of the bank’s “hard” window sometime in 2018. But the US wants to link any support for a recapitalization to World Bank “graduating” China—and perhaps other member countries with good access to private capital markets who don’t seem to “need” the World Bank. There are sensible arguments on both sides of this divide.

The IMF on Protecting the Poor during Fiscal “Consolidations”: Better Late Than Never

Inequality and inclusive growth were high on the agenda of the Annual Meetings of the International Monetary Fund and World Bank earlier this month. We are glad about that, but the under-reported story here is that this prominence marks a dramatic shift in the IMF over the last two decades in the IMF’s approach to the relevant challenges for the poorest countries, including on the issue of social safety nets and social expenditures.

Five Innovations at the AIIB

We visited the AIIB a few weeks ago, and heard more about the emerging AIIB model: What is likely to be the same—as at the five big legacy banks (the World Bank and the four regional development banks) and what is likely to be different.

The Time Is Right for Expanding the Use of the IMF’s Precautionary Credit Lines

Many emerging economies could benefit from insurance against this backdrop of volatility. Fortunately, cheap and no-strings-attached liquidity insurance exists, in the form of the IMF’s Flexible Credit Line (FCL) for countries with very strong policy fundamentals; for countries with somewhat weaker, but still sound fundamentals, the Precautionary and Liquidity Line (PLL) offers a similarly good deal. But these precautionary instruments remain underutilized. We have some suggestions on how the IMF could fix this.