Ideas to Action:

Independent research for global prosperity

Tag: Development Finance

 

Figure 1: Predicted probability of private investment

The Elusive Quest for Additionality

After toiling away for decades in relative obscurity, DFIs have found themselves thrust into the limelight and told to transform “billions to trillions,” to fill the yawning SDG financing gap.

Publication

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.

A column chart of external government debt for Sub-Saharan Africa by official, private, and Chinese creditors

2018 FOCAC: Africa in the New Reality of Reduced Chinese Lending

The 2018 FOCAC Summit will open tomorrow in Beijing. There is much speculation about the size of the investment package China will unveil at the summit. It appears, however, that we are in a new phase of Chinese financing. A combination of domestic and international pressures will likely alter China’s extensive lending program—African states that have relied on this lifeline must adjust to the new reality.

Figure 1: Tax Expenditure as a % of GDP

Time to Pay More Attention to Tax Expenditures?

It is time that donors and technical assistance providers turn their attention to tax concessions provided by developing countries struggling to raise more taxes from domestic sources. The granting of tax concessions is not only mostly opaque and prone to corruption, but these concessions are further constricting the already narrow tax base of countries, thereby undermining the Addis Ababa Action Agenda to promote domestic resource mobilization. There is a risk that additional revenues collected through tax reforms may be lost through tax concessions.

Stock photo of various currencies

The Eight Virtues of Highly Effective DFIs

Amid much discussion of SDG finance gaps, DFIs, both bilateral and multilateral, are in the spotlight as the most important publicly funded instruments for mobilising private capital. Yet, there is a surprising lack of clarity on what we can and should expect from DFIs, beyond broad goals of profitability and development impact.

Power lines in South Africa. Photo by John Hogg / World Bank

The BUILD Act is #EnergyGoals

The bill, which would create a modernized US development finance institution, just passed the House. Todd Moss explains how the new agency could help the US step up energy investments.

Stock photo of various currencies

Merely Collecting More Taxes Is Not Enough to Achieve the SDGs

In development circles these days, there is considerable emphasis on developing countries collecting more taxes domestically to help achieve the SDGs. But with this attention to domestic resource mobilization, we shouldn’t lose sight of a critical point: collecting more taxes will only advance the SDGs if the revenues are spent efficiently.

Publication

In his appearance before the committee, Morris outlined findings from newly CGD published analysis exploring the debt implications of China’s Belt & Road Initiative—and offered his views on what it should mean for US global engagement.

Map of countries involved in China's Belt and Road Initiative coded by their risk of debt distress

Will China's Belt and Road Initiative Push Vulnerable Countries into a Debt Crisis?

In a new CGD paper, we assess the likelihood of debt problems in the 68 countries we identify as potential BRI borrowers. The big takeaway: BRI is unlikely to cause a systemic debt problem, yet the initiative will likely run into instances of debt problems among select participating countries—requiring better standards and improved debt practices from China.

Pages