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112. Chronic Crisis Financing? Fifty Years of Humanitarian Aid and Future Prospects
- Author:
- Gary Milante and Jannie Lilja
- Publication Date:
- 04-2022
- Content Type:
- Working Paper
- Institution:
- Stockholm International Peace Research Institute (SIPRI)
- Abstract:
- This study maps trends of humanitarian funding in the context of total aid at the country level between 1969 and 2019 and estimates how these trends will change in the future. Historical trends show that the composition of aid has changed significantly in the last two decades: the humanitarian share of total aid to countries has increased from approximately 5 per cent in the 1990s to 23 per cent in 2019. Humanitarian aid was originally intended to respond to short-term emergencies, however, most of today’s humanitarian financing goes to protracted situations. Today many countries receive high levels of humanitarian assistance for a decade or longer, referred to in this paper as ‘chronic’ crises. More than half of total global humanitarian assistance (59 per cent) in the decade 2010–19 went to chronic crises, typically synonymous with conflict-affected, fragile and refugee-hosting settings. These chronic crises have become more prevalent since 1995. Conservative forecasts suggest that 71 per cent of humanitarian assistance over the next decade will continue to go to countries receiving high levels of assistance today. The study concludes with open questions to policymakers regarding the use of the humanitarian financing instrument. In chronic crisis settings, the strategic balance between humanitarian, development and peacebuilding financing and the interplay between these financing streams deserves attention.
- Topic:
- Development, Humanitarian Aid, Finance, Resilience, and Peacebuilding
- Political Geography:
- Global Focus
113. Schumpeter’s Creative Destruction as a Radical Departure: New Paradigm for Analyzing Capitalism
- Author:
- Leonardo Burlamaqui
- Publication Date:
- 03-2022
- Content Type:
- Special Report
- Institution:
- Brazilian Center for International Relations (CEBRI)
- Abstract:
- The paper’s core contribution is a reinterpretation of Schumpeter’s development theory, through the "creative destruction paradigm" provided in Capitalism, Socialism and Democracy (CSD). By linking the core propositions of the latter with the brilliant, but underdeveloped, innovations from The Theory of Economic Development (TED) and some largely ignored historical and institutional insights provided in Business Cycles (BC), the seeds of a new analytical framework emerge. One which is completely out of balance, centered on finance, entrepreneurial action, uncertainty, institutions, and competition by means of innovation.
- Topic:
- Development, Political Economy, Capitalism, Finance, Entrepreneurship, and Innovation
- Political Geography:
- Global Focus
114. A Global Development Paradigm for a World in Crisis
- Author:
- Rachael Calleja, Beata Cichocka, Mikaela Gavas, and Samuel Pleeck
- Publication Date:
- 11-2022
- Content Type:
- Working Paper
- Institution:
- Center for Global Development (CGD)
- Abstract:
- This paper explores how and whether responses to COVID-19, particularly from non-DAC actors, have deepened the transition from an “international” to a “global” development paradigm, and it considers implications for the future of development cooperation. To do so, we map international responses to COVID-19—financial and beyond—to understand the changing nature of development challenges and cooperation as well as the growing role of non-DAC actors as part of this shift. Our analysis shows that while a diversity of actors contributed to international COVID-19 responses, the transition towards a global development paradigm has yet to materialize. Instead, responses to COVID-19 demonstrated clear tensions between the imperative for collaboration and the national interest, with the latter trumping the former.
- Topic:
- Development, International Cooperation, Pandemic, and COVID-19
- Political Geography:
- Global Focus
115. Building a Portfolio of Pull Financing Mechanisms for Climate and Development
- Author:
- Ranil Dissanayake and Bernat Camps Adrogue
- Publication Date:
- 11-2022
- Content Type:
- Working Paper
- Institution:
- Center for Global Development (CGD)
- Abstract:
- Pull financing is a powerful but underused mechanism for incentivising progress on hard-to-tackle social problems for which innovation or the take-up of innovation may be part of the solution. It should become part of the ongoing landscape for climate and development work. This paper sets out the specific design features for a portfolio of pull financing mechanisms to support the accelerated development of socially valuable innovations with both climate and development implications. It considers the institutional structure required to manage such a novel mechanism, a process for finding and developing a potential application, and the objectives pull financing should pursue. It then looks in detail at seven applications of pull financing in the climate and development space, each selected to illustrate the potential and challenges of the approach. We conclude by setting out how to construct a high-ambition portfolio of pull financing projects that is both tractable and attractive to potential funders.
- Topic:
- Climate Change, Development, Environment, and Finance
- Political Geography:
- Global Focus
116. 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
117. The Next Game Changers: A Priority Innovation Agenda for Global Health
- Author:
- Cordelia Kenney and Rachel Silverman
- Publication Date:
- 10-2022
- Content Type:
- Working Paper
- Institution:
- Center for Global Development (CGD)
- Abstract:
- Over the last century, scientific and technological innovation has led to unprecedented improvements in health outcomes—yet research and development (R&D) investments and progress to address health threats has been uneven. Commercial R&D has focused where investors can expect substantial financial returns: rich countries, the diseases that affect them, and high-tech solutions designed for the richest and most sophisticated systems. Despite supplemental funding from philanthropic and government grants, R&D to address many leading causes of death and disability—especially those that primarily affect low- and middle-income countries (LMICs) or insure against future risk—has been consistently underfunded relative to potential health gain. This implies that many untapped opportunities remain to dramatically improve global health and welfare via biomedical innovation. In this paper, we report the results of a horizon-scanning exercise to source opportunities for global health R&D investment—that is, high-value potential biomedical innovations which are currently underfunded but which could be transformative for health, quality of life, and health security in LMICs and around the world. Drawing from a literature review and expert interviews with researchers, economists, funders, advocates, and implementers, we lay out an expansive and high-promise (though non-comprehensive) biomedical innovation agenda for global health spanning the unfinished MDG agenda; non-communicable diseases; and global health security. We conclude with a discussion of implications for research, funding, and practice.
- Topic:
- Development, Health, Science and Technology, Innovation, and Emerging Technology
- Political Geography:
- Global Focus
118. Is There a Better Way to Use Global Reserves?
- Author:
- Mark Plant
- Publication Date:
- 10-2022
- Content Type:
- Working Paper
- Institution:
- Center for Global Development (CGD)
- Abstract:
- Global reserves can serve as a global public good, facilitating the short-term global recovery from the economic impacts of the pandemic and Russian invasion of Ukraine, as well as the longer-term global transition to a sustainable and equitable economic future. Strategic allocation of Special Drawing Rights (SDRs) could facilitate sharing of global reserves with low- and middle-income countries to the mutual benefit of advanced and developing countries. This will require the development of new SDR sharing mechanisms, in which multilateral development banks could be instrumental. Other SDR reforms should also be pursued.
- Topic:
- Development, Multilateralism, Sustainability, and Banking
- Political Geography:
- Global Focus
119. What’s the Best Way to Bolster the IMF’s Capacity to Lend to Low-Income Countries?
- Author:
- David Andrews
- Publication Date:
- 09-2022
- Content Type:
- Working Paper
- Institution:
- Center for Global Development (CGD)
- Abstract:
- The IMF’s concessional lending to low-income countries through its Poverty Reduction and Growth Trust (PRGT) has risen dramatically since the start of the pandemic and demand for the PRGT resources is expected to remain above pre-pandemic levels for quite some time. But the surge in lending has strained the PRGT's finances—loan resources have dwindled, subsidy costs have risen sharply, and reserves need bolstering. Projections show the risks to PRGT financing are accentuated given the Russian invasion of Ukraine and rising global interest rates. A multi-pronged decade-long effort is needed to ensure sound PRGT financing: (1) reinforce current fundraising efforts for loan and subsidy resources; (2) promote the use of the PRGT's deposit investment account; (3) terminate the reimbursement of PRGT administrative resources to the IMF's General Resources Account and (4) begin a discussion on IMF gold sales to take place in the out years. Each prong of the effort should start immediately, given the time lags involved in reaching consensus and implementation.
- Topic:
- Development, International Cooperation, Finance, and IMF
- Political Geography:
- Global Focus
120. Why and How Development Agencies Facilitate Labor Migration
- Author:
- Helen Dempster and Beza Tesfaye
- Publication Date:
- 08-2022
- Content Type:
- Working Paper
- Institution:
- Center for Global Development (CGD)
- Abstract:
- Development agencies in high-income countries spend a large amount of both official development assistance (ODA) and other forms of financing on migration programming. While most of this spending is aimed at deterring migration, increasingly more is being focused on facilitating migration: to the high-income country itself; within and between low- and middle-income countries; and supporting people on the move and the diaspora. This paper, written by the Center for Global Development and Mercy Corps, aims to explore why and how development agencies in high-income countries facilitate labor, or economic, migration, and how they have been able to justify and expand their mandate in this area. Based on interviews with nine development agencies, we find that development agencies use a range of arguments to justify their work in this area, including supporting economic development and poverty reduction in partner countries while also meeting labor market demands at home or other countries. Yet expanding a mandate in this area requires substantial cross-government coordination and political buy-in, both of which are difficult to achieve. It also requires the ability to be able to use ODA to facilitate labor migration, which is currently up for debate. As development agencies seek to expand their work on labor migration, it will be necessary to define shared goals and start with pilot projects that focus on low-hanging fruit, while maintaining a focus on development and poverty reduction.
- Topic:
- Development, Migration, Diaspora, and Labor Issues
- Political Geography:
- Global Focus