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Cover Image the sorting hat
February 6, 2020

The Subsidy Sorting Hat

In the Harry Potter novels, a magic hat decides which of four school houses new pupils should join. Development finance institutions (DFIs) need something like that when trying to decide which private firms to subsidise, although applicants only need sorting into two groups: firms that are doing something socially valuable and which genuinely require a subsidy, and firms that are merely trying their luck to get a subsidy for a project they would undertake in any case.

January 24, 2020

Bangladesh: Impediments to Enhanced Revenue Mobilization and Equitable and Efficient Spending

Despite remarkable success in terms of growth, poverty reduction, and improvements in other socio-economic indicators, Bangladesh suffers from chronic revenue shortfalls and an extremely low tax/GDP ratio. The overall size of the government is also quite small and inadequate to meet the growing demand for public services and infrastructure, primarily due to revenue-generating limitations by the country’s tax authorities

Cover image of international taxation paper
January 22, 2020

International Taxation and Developing Countries

International tax issues are a concern for both developed and developing countries, with evidence of aggressive tax planning by multinational enterprises (MNEs). MNEs are able to exploit weaknesses in the design of the international tax framework to reduce their tax liabilities. 

Peter Mullins
Cover image for Senegal DRM case study
January 21, 2020

Senegal: Making Domestic Resource Mobilization Work to Sustain Growth and Improve Service Delivery

Senegal’s recent economic performance is impressive. For the first time, Senegal has achieved a GDP growth rate of more than 6 percent for three consecutive years (2015–2017), and per capita GDP has increased at an annual average of 4.1 percent. In parallel, progress in fiscal revenues has been recorded, with the ratio of average revenues to GDP increasing by 5.7 percentage points between 2000-2002 and 2014-2017, placing Senegal above the regional average of 15 percent.

Front cover of Zambia domestic resource mobilization paper
December 11, 2019

How Erratic Tax Policies Are Impeding Revenue Mobilization in Zambia

This case study assesses whether Zambia’s tax and fiscal policies have been impeded by political and technical constraints. Tax policy is a deliberate—yet intricate—process requiring not just well-measured choices, but also stability. Zambia has undertaken several tax reforms that have included broadening the tax base, establishing a revenue collection agency, and introducing a value-added tax (VAT). 

Ramos Emmanuel Mabugu and Eddie Rakabe
Front Cover Stretch Fund
December 4, 2019

The Stretch Fund

When the world adopted the SDGs, policymakers knew that aid alone would never meet the financing needs. They embraced the “billions to trillions” vision, believing that an abundance of commercially viable SDG-related investments was ready and waiting for trillions in profitable private investment—if only development finance institutions (DFIs) and others could clear away the obstacles that stand between the investments and private investors. Reality looks different. To fill the gaps in the financial architecture, Nancy Lee and Dan Preston propose the Stretch Fund.

Front cover of IFAD analysis paper
November 12, 2019

Lending Terms for IFAD Projects

Donor support for agriculture development is not keeping pace with developing country demand or the need for finance implied by Sustainable Development Goal 2. In order to increase the overall volume of resources available for these needs, IFAD is pursuing a reform agenda that considers providing loans on harder terms to its client countries.

Scott Morris and Jessie Lu
The cover of the paper
October 23, 2019

Can the US Development Finance Corporation Compete?

The new US International Development Finance Corporation (USDFC) will be considerably larger than its predecessor, and it will also be more focused on low and lower middle income countries. It will have new tools to deliver but face expanded competition. 

The first page of the brief
October 11, 2019

ABCs of the IFIs: The World Bank

The World Bank is a multilateral organization that provides financial and technical assistance to developing countries. As the World Bank’s largest shareholder, the United States maintains a unique influence in shaping its agenda and has a vested interest in ensuring the institution is well managed and appropriately resourced. The US Congress has an important role both in funding US contributions to the World Bank and in overseeing US participation in the institution. Past congressional decisions tied to US funding have led to changes in World Bank policies and institutional reforms.

Front cover of Charles Kenny's policy paper on five principles for DFIs
October 9, 2019

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

There is a significant and ongoing ramp-up in support for explicitly subsidized official development finance to the private sector around the world, but its role remains poorly defined. Lessons from the aid effectiveness literature as a whole and principles on effective use of aid suggest the need for approaches that do not merely finance the marginal private investment. 

September 20, 2019

Are the Pacific Islands Insurable? Challenges and Opportunities for Disaster Risk Finance

There are several efforts underway in the Pacific Islands to insure public and private assets against natural disasters such as cyclones and earthquakes. These efforts are designed to mitigate the annual costs of such disasters which range from a few percent to over 50 percent of GDP.  However, insurance is not a substitute for aid.  Most islands are heavily aid dependent and cannot afford to pay the high premiums associated with disaster risk insurance. 

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