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Begin New Search Author Clemence Landers Publication Year within 3 Years

1. ABCs of the IFIs: Understanding the World Bank’s IDA21 Replenishment

Author:
Erin Collinson, Clemence Landers, Justin Hurley, and Grace Miner
Publication Date:
06-2024
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
The International Development Association (IDA)—the World Bank’s arm that works in low- and lower-middle-income countries—is one of the largest sources of development assistance for the world’s poorest countries. It is also a crucial tool for resource-constrained governments to borrow on affordable terms compared to other creditors, including Chinese entities. IDA supports eligible countries whose annual per capita incomes fall below an established line (currently $1,315 in FY2024). Because IDA provides grants and highly subsidized loans to its client countries, its funds need to be replenished by donors every three years. Replenishments are year-long negotiations where the World Bank’s shareholding countries, of which the US is the largest, negotiate a policy and financing package for the next three-year cycle. This year, 2024, is an IDA replenishment year for the institution’s twenty-first round of funding (“IDA21”), culminating with a pledging session in December to finalize IDA21’s financing envelope.
Topic:
Development, World Bank, and International Development Association (IDA)
Political Geography:
Global Focus

2. Warming or Cooling on World Bank Climate Finance: What Drives Country Demand?

Author:
Clemence Landers, Karen Mathiasen, and Samuel Matthews
Publication Date:
12-2023
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
The climate agenda has been a dominant feature of World Bank reform efforts, with President Banga aiming to both mobilize new resources and increase the proportion of total funding for climate-related projects. The stakes are high: greenhouse gas (GHG) emissions in many borrowing countries are elevated and rising, dimming prospects for meeting the 2030 Paris Agreement target to limit warming to a 1.5 degrees Celsius increase. To date, stakeholders have focused on how to mobilize new funding for climate mitigation reflecting an emphasis on the supply side (e.g., financing) of the agenda. But there has been little analysis on the demand side (or project pipeline). The assumption is that more money will generate more demand. But this does not necessarily follow. In this paper, we discuss major factors that will influence demand for climate mitigation projects, especially from the largest emitters of greenhouse gases (e.g., China, India, Brazil, Indonesia, Mexico). Our assessment is that factors like World Bank borrowing costs and access to alternative sources of finance will likely limit demand absent financial incentives, which could prove costly and difficult to resource at the scale needed to have meaningful impact. We also see a risk that these incentives could be used inefficiently absent a rigorous analysis to identify where they could have the most impact and a robust framework for assessing results.
Topic:
World Bank, Climate Finance, and Sustainable Development
Political Geography:
Global Focus

3. The ABCs of Sovereign Debt Relief

Author:
Rakan Aboneaaj, Jocilyn Estes, and Clemence Landers
Publication Date:
10-2022
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
We are living in a time when many countries face heightened debt vulnerabilities. Already high before the pandemic, debt levels reached a 50-year peak following the growth in government spending to combat COVID-19. Debt is not inherently bad; borrowing can allow countries to finance vital government investment. But unsustainable levels of debt can have devastating consequences for a country’s population, crowding out government spending on even basic necessities including food, medicine, and fuel imports. In Sri Lanka, for example, 71 percent of government revenue was spent on debt service before the country defaulted. Even where the tradeoff is not so dire, unsustainable debt service can limit productive investments in infrastructure, education, healthcare, and other sectors, hampering the economic growth necessary to reduce a country’s debt burden. After a decade-long period of low borrowing costs, a confluence of rising interest rates, inflation, and commodity shocks have raised the likelihood of overlapping debt crises in developing countries. The International Monetary Fund (IMF) now estimates that 30 percent of emerging market countries and 60 percent of low-income countries could face trouble paying down their debts or will soon. There is no international bankruptcy mechanism for countries that default on their external obligations. Instead, countries have historically depended on a patchwork of precedents, contracts, and conventions to bring creditors to the table for debt relief negotiations. The United States has a legacy as the lead architect of large global debt relief initiatives, from the Brady Bond plan for Latin America to the Heavily Indebted Poor Countries (HIPC) Initiative that kickstarted debt relief for poor countries in the 1990s. However, the global creditor landscape has changed significantly over the past decade. Low-income sovereigns’ largest creditors today—China and private bondholders—operate under much different principles than the leading bilateral creditors of the past, making the traditional norms and structures less effective for present debt challenges. The objective of the international financial architecture—historically overseen by the IMF and its shareholders— will be to corral these new creditors into a cooperative arrangement to deliver on debt relief.
Topic:
Debt, Development, Governance, Credit, and Sovereign Debt
Political Geography:
Global Focus