<p><b><i>Finance may not be a sufficient ingredient for development</i></b>, but it is a necessary one. The need for finance to address crises and the consequences of these for development is mounting. The COVID-19 pandemic slowed or even reversed development trajectories in many low- and middle-income countries. Global and national development goals are now further away, and to make progress require more finance than was initially estimated. The impact of cross-border challenges, notably climate change, has become more tangible and widespread. We not only have more crises, but also longer-lasting ones, blurring even further the line between humanitarian and development assistance. Urgent action is needed to turn the tide.</p><p><b>But finance is either insufficient or doesn't reach the countries most in need</b>. Traditional foreign aid might have gone up in absolute terms, but the main drivers of this increase have been growing assistance to Ukraine and more spending to support refugees in donor countries (counted as foreign aid despite being spent domestically). In early 2025, many development partners—including Belgium, the Netherlands, and the UK—announced significant cuts to their development budgets. As we write, the largest development partner by volume of assistance and reach, the United States—has slashed its foreign aid programmes at a single stroke.</p><p>At the same time, <b>the</b> donor architecture has become more and more complex, <b>with a proliferation of bilateral and multilateral donors and facilities</b>. A highly fragmented system of donor providers translates into greater pressure on the public systems of the Global South, higher transaction costs, and fewer economies of scale.</p><p><b><i>Changes to the operations and business models of multilateral development banks (MDBs) have dominated the debate about the reform of the international financial architecture</i></b>. Despite MDBs being among the few financiers providing relatively cheap loans, their financial contributions remain a drop in the ocean. Private investors find it too risky to invest in frontier markets. The highly touted shift from “billions to trillions,” which anticipated that government funding and efforts would attract significant private investments for sustainable development, has failed to materialize.</p><p><b><i>A debt crisis is looming</i></b>. It might not be as widespread as in the 1990s and early 2000s, but it can have profound consequences in countries where servicing debt obligations consumes a larger slice of the budget than health and education spending. Ten years ago, borrowing from capital markets became attractive for many frontier markets when conditions were favourable. Rolling over or refinancing those obligations is now, however, proving expensive or impossible, as market interest rates have increased.</p><p><b><i>Tense geopolitical relations between global powers are also restricting progress in reforming the governance of the intern
按字母顺序排列,撰稿人如下约瑟夫-马托拉(Joseph Matola),南非国际事务研究所(SAIIA)经济复兴与包容计划负责人,伊丽莎白-西迪罗普洛斯(Elizabeth Sidiropoulos南非国际事务研究所(SAIIA)首席执行官 Elizabeth Sidiropoulos;联合国非洲经济委员会(UNECA)副执行秘书(方案)兼首席经济学家 Hanan Morsy;哥伦比亚大学国际与公共事务学院教授何塞-安东尼奥-奥坎波;非洲经济转型中心(ACET)总裁兼首席执行官马维斯-奥乌苏-贾姆菲;拉丁美洲倡议主任兼全球发展中心高级研究员莉莉安娜-罗哈斯-苏亚雷斯;以及非洲催化剂公司首席执行官达乌达-森贝内。需要强调的是,作者们是在美国突然改变发展合作政策和欧洲国家宣布大幅削减援助预算之前完成初稿的。然而,作者就国际金融架构的未来提出的主要建议仍然有效,甚至更加重要,因为双边援助很可能会缩减。
{"title":"Financing development at a crossroads: What's at stake and what reforms are needed?","authors":"Annalisa Prizzon","doi":"10.1111/dpr.70009","DOIUrl":"https://doi.org/10.1111/dpr.70009","url":null,"abstract":"<p><b><i>Finance may not be a sufficient ingredient for development</i></b>, but it is a necessary one. The need for finance to address crises and the consequences of these for development is mounting. The COVID-19 pandemic slowed or even reversed development trajectories in many low- and middle-income countries. Global and national development goals are now further away, and to make progress require more finance than was initially estimated. The impact of cross-border challenges, notably climate change, has become more tangible and widespread. We not only have more crises, but also longer-lasting ones, blurring even further the line between humanitarian and development assistance. Urgent action is needed to turn the tide.</p><p><b>But finance is either insufficient or doesn't reach the countries most in need</b>. Traditional foreign aid might have gone up in absolute terms, but the main drivers of this increase have been growing assistance to Ukraine and more spending to support refugees in donor countries (counted as foreign aid despite being spent domestically). In early 2025, many development partners—including Belgium, the Netherlands, and the UK—announced significant cuts to their development budgets. As we write, the largest development partner by volume of assistance and reach, the United States—has slashed its foreign aid programmes at a single stroke.</p><p>At the same time, <b>the</b> donor architecture has become more and more complex, <b>with a proliferation of bilateral and multilateral donors and facilities</b>. A highly fragmented system of donor providers translates into greater pressure on the public systems of the Global South, higher transaction costs, and fewer economies of scale.</p><p><b><i>Changes to the operations and business models of multilateral development banks (MDBs) have dominated the debate about the reform of the international financial architecture</i></b>. Despite MDBs being among the few financiers providing relatively cheap loans, their financial contributions remain a drop in the ocean. Private investors find it too risky to invest in frontier markets. The highly touted shift from “billions to trillions,” which anticipated that government funding and efforts would attract significant private investments for sustainable development, has failed to materialize.</p><p><b><i>A debt crisis is looming</i></b>. It might not be as widespread as in the 1990s and early 2000s, but it can have profound consequences in countries where servicing debt obligations consumes a larger slice of the budget than health and education spending. Ten years ago, borrowing from capital markets became attractive for many frontier markets when conditions were favourable. Rolling over or refinancing those obligations is now, however, proving expensive or impossible, as market interest rates have increased.</p><p><b><i>Tense geopolitical relations between global powers are also restricting progress in reforming the governance of the intern","PeriodicalId":51478,"journal":{"name":"Development Policy Review","volume":"43 3","pages":""},"PeriodicalIF":2.0,"publicationDate":"2025-04-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/dpr.70009","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143801546","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}