Research Papers | G-24

Research Papers

Sovereign Debt of Developing Countries: Overview of Trends and Policy Perspectives

10th May 2016

Are Credit Rating Agencies Limiting the Operational Capacity of Multilateral Development Banks

30th October 2015 Abstract

Multilateral development banks (MDBs) represent one of the most successful types of international organization created in the post-World War II era. Over 20 MDBs currently operate in the world, and two more—the Asian Infrastructure Investment Bank and BRICS New Development Bank—are due to begin operations in 2016.

A key reason for the enduring popularity of MDBs is their financial model. With a relatively small amount of capital contributions from shareholder governments, MDBs can borrow much larger amounts from private capital markets at attractive financial terms, and on-lend those resources for development projects with enough of a margin left over to cover administrative costs. Thus, government shareholders can have a very significant development impact (in financial terms, at least) with a relatively small budgetary outlay (Table 1).1


China’s Emergence: A Wake Up Service for Latin America

13th September 2014 Abstract


Country Ownership of Reform Programs and the Implications for Conditionality

13th May 2014 Abstract

The essence of ownership is the acceptance of full responsibility for the consequences of a program. Ownership matters because of the expectation that program design will be more appropriate and country authorities will be resolute in taking steps domestically to ensure full implementation of the program. The steps include seeking proper domestic legitimation, which will prevent certain "political economy" factors from disrupting program implementation. That program success is correlated with degree of ownership and that ownership is correlated with implementation, which in turn is correlated with program legitimation, are supported by available evidence. Ex ante selectivity is easily made preferable to ex post, and for financial support a recipient country must satisfy the donor country team as to the reality of ownership, soundness of the program (policies and outcomes), and adequate implementation capacity. From a positive perspective, forces operating on both the demand and supply side of aid should inevitably bring about a new equilibrium regime in the aid relationship that excludes traditional conditionality


Malaysia’s September 1998 Controls: Background, Context, Impacts, Comparisons, Implications, Lessons

13th May 2014 Abstract


The IMF at Sixty: An Unfulfilled Potential?

13th March 2014 Abstract

The governing structure of the Bretton Woods Institutions –that is, the International Monetary Fund and the World Bank– was determined sixty years ago. In 1944, a few industrial countries accounted for the bulk of world output, trade, and capital flows. This is no longer the case. Developing countries and economies in transition, the more dynamic elements of the world economy, account today for the same volume of output as the Group of Seven (G-7) countries in terms of purchasing power parity, and for 84 percent of the world’s population. They can no longer be dismissed as minor partners in the global economy.

The lack of adequate representation of the developing countries and emerging market economies in the governance of the global economy and the declining commitment of major countries to a multilateral rules-based system of international monetary cooperation has resulted in short-sighted, and politically motivated decisions by major shareholders, which undermine the efficacy of the IMF and World Bank and have adverse consequences for world economic growth and stability. Indeed, the non representative character of the governance of these institutions increasingly threatens the integrity of the international monetary system, as countries in Asia and elsewhere move away from the IMF and take distance from the World Bank, leaving the institutions to deal mainly with low-income countries.

This paper provides an overview of the international monetary system, briefly discussing six key problems1 in which the concentration of power in a few countries and the limited participation of developing countries in the discussion of systemic issues leads to poor results:

1. the correction of global imbalances;

2. the role of the IMF in the adjustment process; 1 For reasons of space, other important problems, such as the issue of negative net transfers of resources to developing countries, and the problems of the low income countries will not be discussed. 2

3. combating deflation through countercyclical policies;

4.financial crises prevention and resolution;

5. the management of international liquidity, and

6.responding to commodity shocks.

Overcoming these problems requires a renewed commitment of industrial countries to a rules based multilateral system and the participation of developing countries in decision making in a manner commensurate with their economic importance.


Does the IMF Need More Financial Resources?

13th March 2014 Abstract


Can More Representative Governance Improve Global Economic Performance?

13th March 2014 Abstract

The governing structure of the BWIs was determined in 1945 when a few industrial countries accounted for the bulk of world output, trade and capital flows This is no longer the case.The developing countries and economies in transition account for the same volume of output as the G7 countries, in terms of purchasing power parity, and for 84 percent of the world’s population and can no longer be dismissed as a minor partner in the global economy. The lack of adequate representation of the developing countries in the governance of the global economy has adverse consequences for world economic growth and stability.

The paper discusses seven key problems of the international monetary system; namely, correction of global imbalances, combating deflation through countercyclical policies, financial crises prevention and resolution, negative flows of capital to developing countries, management of international liquidity, commodity shocks, and the problems of the poorest countries. It is argued that optimum solutions in these areas require the participation of both developed and developing countries. The correction of global imbalances by (Plaza type) agreements among a few industrial countries is found to be no longer feasible and solutions arrived at without the full participation of developing countries, are unlikely to work (i.e. the CCL, the SDRM, the HIPC strategy) Solutions to global problems require the full involvement of developing countries in a manner commensurate with their economic importance.


A New Voting Structure for the IMF

13th March 2014 Abstract


An Estimation of IMF Quotas based on a formula derived from the G-24 Ministers Communiqué

13th March 2014 Abstract


Global Liquidity and Financial Flows to Developing Countries: New Trends in Emerging Markets and their Implications

13th March 2014 Abstract

Capital flows to developing countries have seen a robust revival after the slump following the East Asian financial crisis. This paper argues that in the wake of financial liberalization, supply-side factors rather than the financing requirements of developing countries explain the surge in cross-border flows. Increasingly a small number of centralized financial institutions intermediate global capital flows and the investment decisions of a few individuals in these institutions determine the nature of the “exposure” of the global financial system. This has implications for the accumulation of risk and vulnerability to financial crisis in markets where agents tend to herd.


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