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CGD’s work in this area focuses on strengthening financial systems in development countries through innovation and regulation.
Greater access for the poor to the formal financial system—including payments, savings, credit, and insurance—can greatly improve household stability and development prospects. CGD examines how to strengthen, broaden, and deepen financial systems in developing countries through innovation and regulation. We also study the effects of financial crises, to avoid and mitigate future shocks, and how developing countries can improve their business climates to spur inward investment.
This paper constructs an index of regulatory quality for improving financial inclusion for the purpose of assessing and comparing the quality of rules and regulations in a sample of eight Latin American countries.
As the evidence of mobile money’s ability to improve financial access continues to grow, some in the development community are exploring whether a new wave of digital innovation, including digital currencies and blockchain technology, can play a similar role. To date, however, only a small number of start-ups using these technologies have been able to develop profitable business models, while others have struggled to overcome some of the same hurdles faced by more traditional financial actors. For this reason, some are skeptical that these new technologies will significantly improve financial inclusion. This event, which is co-hosted by the Center for Global Development and World Bank’s Blockchain Lab, will bring together policy experts working on the forefront of financial inclusion and technology, along with the CEO of BitPesa, a company that uses blockchain technology to facilitate payments between Africa and the rest of the world. The panel will discuss the opportunities and challenges facing start-ups seeking to use blockchain technology to expand financial access in emerging and frontier markets. CGD Policy Fellow Michael Pisa will moderate the discussion.
The entrepreneur is a 59-year-old widow in the city of Mbeya, Tanzania. She has a covered dark corner space in an open market where she sells soft drinks during the day, adds beer in the evenings, and also sells prepared meals in an adjacent space. She recently took a 6-week long business training course from TechnoServe, which included instruction on how to access M-Pawa, a new Vodaphone mobile savings platform. This should allow her to gain better control of her income and invest in her business.
Each of the G20 summits of the past seven years has suffered in comparison with the London and Pittsburgh Summits of 2009, when the imperative of crisis response motivated leaders, finance ministers, and central bankers to coordinate effectively with each other. Subsequent summits have lacked the same sense of urgency and have failed to deliver any kind of agenda that can be pinpointed as clearly as “saving the global economy.” This week’s summit in Hamburg, Germany promises more of the same, with the real possibility that the G20’s stock could fall even further at the hands of a non-cooperative US delegation.
For the US Development Policy Initiative’s inaugural Voices of Experienceevent, three former Treasury Under Secretaries for International Affairs took the stage: Tim Adams of the Institute of International Finance, Lael Brainard of the Federal Reserve, and Nathan Sheets of Peterson Institute for International Economics. The conversation, moderated by CGD Board Member Tony Fratto, revealed the “esprit de corps” of the International Affairs team, and covered everything from the central yet oft under-the-radar role the Office of International Affairs plays in the formulation and execution of international economic policy, to each Under Secretaries’ proudest moments.
The informal sector is a major source of economic activity and job opportunities in poor countries as well as emerging economies. In sub-Saharan Africa, the size of the informal sector is estimated to employ over 70 percent of the population. Why do businesses remain informal? What gains in productivity or profitability do they forego by as a result of that choice?
This work analyzes fresh data made available by updated, more comprehensive Enterprise Surveys of formal firms of various sizes and, importantly, of informal firms. It concentrates on five countries (the DRC, Ghana, Kenya, Myanmar, and Rwanda) to provide more fine-grained insights into differences in characteristics and productivity levels between formal and informal firms or different sizes in different developing countries.