Development Finance

Handbook of Regional Cooperation and Integration

“…Ocampo (2006) identifies two main pillars of regional financial cooperation. The first involves development financing that broadly includes the use of official resources to facilitate and encourage private sector investment in lower-income countries with higher commercial and political risk (Spratt, 2009). Governments can bilaterally transfer such funds in the form of a concessionary loan that follows the OECD Development Assistance Committee (DAC) standards (for more on OECD DAC standards, see OECD ( 2021)), if the country is a member of it, in which the transfer of funds will be called an Official Development Aid (ODA).…”

Public Banks, Public Purpose, and Early Actions in the Face of Covid-19

“…Banks, be they public or private, are historically unique financial institutions that specialize in collecting, directing, accelerating, and magnifying money as capital and as credit. Banks do so because they have acquired over time the political right to perform these powerful economic functions in society, not least of which is the ability to create money itself by extending credits well in excess of the actual money held in bank reserves (Spratt 2009;McLeay et al 2014;Pettifor 2016;Hudson 2018). For this reason, banks have become one of the most important institutions in capitalist society, financial or otherwise.…”

Government Intervention and Financial Sector Development

“…Stiglitz (1989) further emphasised that since information is not perfect, prices and markets are not perfect and hence there can be market failures in financial markets. Spratt (2009) maintained that government intervention in the financial sector is required for 'production of public goods' where private sector may not be interested as it cannot appropriate externalities; presence of market failures; and redistribution of income. Panizza (2012) suggested that the choice of market or government or a combination of them will depend on a country's stages of economic development.…”