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.

 

Why Development Finance Institutions Use Tax Havens

Development Finance Institutions (DFIs) exist to promote development by investing in the poorest, least developed countries. They often route those investments via holding companies or private equity funds domiciled in tax havens. On the face of it, that seems absurd: tax havens are widely seen as a drain on development, depriving cash-strapped governments of billions of dollars in public revenue. In a new paper I argue that whilst widespread opposition to DFIs investing via tax havens is understandable, it is misguided. Banning the use of tax havens would do more harm than good. 

Women in Fintech: Steps towards Gender Equality in a Most Unequal Sector

On October 4, CGD convened a private roundtable on women and financial technology in development alongside Monica Brand Engel, co-founding partner of Quona Capital (which invests in financial technology solutions in the developing world), and Wendy Jagerson Teleki of the International Finance Corporation. An engaged set of participants from MDBs, government, civil society, and the private sector joined Engel and Teleki in exchanging ideas on how to increase women’s representation in financial technology (or “fintech” for short) leadership and improve access to financial services for women. 

The (Sometime) Tyranny of (Somewhat) Arbitrary Income Lines

As Lant Pritchett reports, the World Bank has introduced two new poverty lines: $3.20 for lower middle income countries, and $5.50 for upper middle income countries. I’m with Lant that this is broadly a good thing. But the process by which the World Bank came up with its new poverty lines suggests it might be worth revisiting some of the pitfalls of income thresholds at the individual or national level. 

Does Management Matter for Learning Outcomes?

Much has been written about the difference in education outcomes between public and public-private partnership (PPP) schools. According to a review by Ark, so far there is insufficient or modest evidence linking PPPs—including contract schools, subsidies, and vouchers—with better learning outcomes (as distinct from evidence about public versus private [non-PPP] schools).

Prioritizing Livelihoods: How Personal Security Can Promote Economic Security in Jordan

Ensuring refugees have access to livelihoods opportunities is one of the key factors to broader stability. When refugees are allowed to contribute meaningfully to the economy, they gain self-reliance and economic security. Creating sustainable livelihoods, providing the right to work and to own a business, and creatively bringing refugees and native businesses into the formal economy can be steps in the right direction.

Stop Spreading the Myth: Zambia Is Not Losing $3 Billion to Tax Avoidance

If transparency in debates around matters of natural resource wealth, then so too does the way that figures get translated into public debates.  Earlier this month the Lusaka Times published a claim that multinational mining companies were “robbing Zambia of an estimated $3billion annually through tax evasion and illicit financial flows.” I have written about the Zambia Copper Billions before. I don’t think the figure is at all credible, and I am not the only one. Organisations that have allowed this myth to spread have not done any favours to the people of Zambia, and they have a responsibility to put it right. 

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.

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