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Answering the World Bank’s $75 Billion Question

Next week in Zambia, donors to the World Bank’s financing window for low-income countries, the International Development Association (IDA), meet to discuss IDA’s future. This “mid-term review” is both a stocktaking session and a teeing up of the next round of fundraising for the world’s largest concessional lending fund. Formal negotiations will commence next year, but the meetings in Zambia set the scene for those negotiations.

road through forest

China’s “Green” Belt and Road Initiative Isn’t Very Green

What would it look like today if major multilateral finance institutions like the World Bank had never adopted the climate agenda as a binding constraint on their operations? Unfortunately, we have a real-world approximation of that hypothetical in the form of Chinese development finance. At least, that’s a conclusion I draw from an important new report from World Resources Institute (WRI) and Boston University, Moving the Green Belt and Road Initiative: From Words to Actions.

The International Finance Facility for Education: The Wrong Answer to the Right Question?

Donors are considering a proposal for a new “innovative finance mechanism” to increase funding for education, based on recommendations from Gordon Brown’s Education Commission. We agree that we need to finance an expansion of education in the developing world. But sadly, the International Finance Facility for Education (IFFEd) proposal is too good to be true. Using donor guarantees to increase lending by multilateral banks could increase the supply of loans—but there are simpler ways to do that without setting up a new facility.

graph compares median private capital inflow/GDP ratios over time for LICs, lower-middle-income countries (LMICs), and upper-middle-income countries (UMICs

Three Surprises about Private Capital Flows to Low-Income Countries

The formidable challenge of financing the Sustainable Development Goals has focused attention on the role of private capital in filling huge finance gaps. But for low-income countries (LICs), which receive only about 5 percent of total cross-border private capital flows to developing countries, there is little confidence that external private capital will make a significant contribution.

Two stacked bar graphs, one with the total assets of the IDFC members (totaling 3.7 billion) and the other with the MDBs (totalling 1.5 billion).

Rising to the SDG Challenge: The Unique Contribution of the International Development Finance Club

The IDFC represents a unique mix of bilateral agencies, national development banks, and regional development banks. As such, it holds promise for bringing new and productive collaborations to the SDG agenda that extend well beyond the work of the major multilateral development institutions. In a new brief, our efforts to map the scale and scope of IDFC members’ development financing through a membership survey and public databases provide some interesting takeaways:

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.

Duck Soup

Fearing Marxism in Chinese Financing

The Trump administration is worried about the role of Chinese finance in spreading Marxism around the developing world. But it’s Chico Marx, not Karl, that they should be focused on. 

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