By surveying DFIs, we aim to start building a baseline of their gender policies and practices, analyze the data, and make recommendations where stronger policies and practices are needed. The survey’s findings give DFIs an important opportunity to learn from one another and work towards standards for how they can best promote gender equity.
Development finance institutions (DFIs) suggest that transparency is important to their development impact, and many aim to be in a leadership position on reporting about their work, but actual practice on transparency varies significantly between DFIs.
Harder Times, Softer Terms: Assessing the World Bank’s New Sustainable Development Finance Policy Amidst the COVID Crisis
The World Bank’s non-concessional borrowing (NCBP) policy for IDA countries was introduced in 2006 following major rounds of debt relief and debt cancellation for a large subset of these countries through the Heavily Indebted Poor Country Initiative and the Multilateral Debt Relief Initiative.
Many prominent people have advocated that the IMF undertake an “SDR allocation” to assist countries in dealing with the global financial crisis brought about by the COVID-19 pandemic. If IMF shareholders show some leadership and bureaucratic flexibility, there are ways to allay the American government’s concerns and quickly get liquidity in the hands of countries who desperately need it.
DFIs are not central banks. They do not drive monetary policy stances and overall lending conditions in their countries of operations. Rather, during economic and other shocks, they must find ways to restart or boost financial intermediation for direct and systemic impact on target populations, sectors, and countries. But they must do so with an eye on their own balance sheets.
Adapted from a seminar with the IMF and climate experts that CGD co-sponsored with the European Climate Foundation, this note looks at the role that the IMF can take to help tackle climate change.
There is a little-noticed but important difference between the World Bank’s original goal for poverty reduction and the subsequent UN Sustainable Development Goal (SDG). While both target the “$1.90 a day” poverty rate, the Bank’s goal was a 3% rate by 2030, while the SDG is to “eradicate” poverty by 2030.
“Additionality” is central to claims of impact by development finance institutions (DFIs). At its core is the notion that DFIs are necessary to solve a market failure by providing capital, risk mitigation, or some other benefit to a market that is not delivering these services strictly through private actors. But what exactly constitutes additionality, how do we know when it is real, and how can we measure it?
In May 2018, the shareholders of the International Finance Corporation (IFC)—the private sector arm of the World Bank—agreed to increase its paid-in capital by $5.5 billion as part of the $13 billion capital increase for the World Bank Group (WBG). The US administration agreed to the increase but declined to contribute to the additional capital. But for the increase to take effect, Congress must authorize it. Thus far, it has not done so. Why?
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.
On November 13, CGD senior fellow Charles Kenny testified before the House Committe on Financial Services Subcommittee on National Security, International Development, and Monetary Policy Hearing, on How America Leads Abroad: An Examination of Multilateral Development Institutions.
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.
ABCs of the IFIs: The African Development Bank, the Asian Development Bank, and the International Fund for Agricultural Development
The African Development Bank (AfDB), the Asian Development Bank (ADB), and the International Fund for Agricultural Development (IFAD) are among the international financial institutions seeking pledges from donor countries as part of upcoming replenishment cycles in 2019 and 2020.
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.
Marginal, Not Transformational: Development Finance Institutions and the Sustainable Development Goals
Development finance institutions have positioned themselves as key agencies to help the world meet the Sustainable Development Goals. It is doubtful that they can deliver. This paper outlines the challenges facing DFIs in achieving (anywhere near) such an expansion in their impact, particularly in infrastructure and particularly in the poorest countries.
The SDGs face a key dilemma. Although major multilateral institutions like the World Bank and the other core MDBs have played a leadership role in shaping the SDG financing framework, there is a significant misalignment between the structure of these institutions and SDG financing needs. The International Development Finance Club is uniquely positioned to play a leadership role on the SDGs.
The Sustainable Development Goals face a key dilemma. Major multilateral institutions like the World Bank and the other core MDBs have played a leadership role in shaping the SDG financing framework. However, there is a significant misalignment between the structure of these institutions and the SDG financing needs.
DFIs are frequently asked to demonstrate their additionality—meaning that they make investments that the private sector would not—but what evidence of additionality would look like is rarely articulated. This paper examines potential quantitative and qualitative evidence.