External Financing, Gap Models of Growth, and the Macroeconomics of Relying on Foreign Resources

2020 ◽  
pp. 198-219
Author(s):  
Giovanni Andrea Cornia
Keyword(s):  
Developing Countries ◽  
Foreign Aid ◽  
Debt Crisis ◽  
Strong Dependence ◽  
Capital Inflows ◽  
External Financing ◽  
Foreign Loans ◽  
Financing Gap ◽  
Gap Models

Chapter 10 reviews the factors responsible for the strong dependence of developing countries on foreign capital and foreign aid, as well as the cyclical capital inflows and long-term development problems entailed by such a situation. It then discusses a family of models, some of which were developed after the debt crisis and recession of the 1980s and 1990s. These models aim to determine the amount of foreign loans and grants required to reach a preset rate of growth of GDP. It finally assesses the macroeconomic and growth impact of high dependence on foreign finance and foreign aid.

scholarly journals Analysis of the Impact of External Shocks on the Russian Banking System in the XXI Century

2019 ◽  
Vol 13 (4) ◽  
pp. 51-61
Author(s):  
O. S. Kochetovskaya
Keyword(s):  
Banking Sector ◽  
Debt Crisis ◽  
Banking System ◽  
Capital Inflows ◽  
External Financing ◽  
External Shocks ◽  
The Usa ◽  
European Debt Crisis ◽  
Favorable Conditions ◽  
The Impact

The main objective of the study was the identification of the key channel of impact of positive and negative external shocks on the Russian banking system for the period from 2000 to 2017. In conducting the study the author used systematic and statistical methods of analysis. Throughout the named period, the banking sector of Russia was always under the influence of one or another external shock: rising and falling oil prices; favorable conditions for obtaining financing on the global capital market; the global financial and economic crisis; the European debt crisis; the tapering of the quantitative easing policy in the USA; sanctions imposed on Russia by the Western countries. In the pre-crisis period, capital inflows became the main channel for the transmission of external shock. In the course of the European debt crisis, problems with attracting external financing became a key channel for the transfer of external shock. During the global crisis and the crisis of 2014–2016 the channels of transmission of external shocks to the banking sector of Russia, despite various causes, were in many ways similar. So, the main channels were the outflow of capital, the restriction of external financing, the collapse of the ruble exchange rate, and the state of confidence in the banking sector.

scholarly journals Improving Kiribati educational outcomes: Capacity-building of school leaders and teachers using sustainable approaches and donor support

2019 ◽  
Vol 26 (2) ◽  
pp. 221-241
Author(s):  
Susanne M Owen
Keyword(s):  
Developing Countries ◽  
Instructional Leadership ◽  
Foreign Aid ◽  
Classroom Practices ◽  
School Leaders ◽  
Donor Support ◽  
Effective Models ◽  
Leadership Approaches ◽  
Ongoing Monitoring

Using effective models for continuing teacher and school leader education in developing countries is essential for long-term improvement of the education system and student outcomes. Instructional leadership approaches have been used to capacity-build school leaders, improving leader skills in working with teachers on classroom practices and also focusing on ongoing monitoring of student academic progress. Foreign aid frequently supports such initiatives concerned with turning around school systems in developing countries, with local ownership and integration within national frameworks being essential to ensure sustainability. This paper outlines a leadership programme and processes for Kiribati. Early findings and challenges are outlined within the context of instructional leadership models, as well as strategies used to address issues. The programme has relevance for other continuing education programmes in developing countries, especially within foreign aid situations.

scholarly journals Is the Debt Crisis History? Recent Private Capital Inflows to Developing Countries

1996 ◽  
Vol 10 (1) ◽  
pp. 27-50 ◽  
Author(s):  
M. Dooley ◽  
E. Fernandez-Arias ◽  
K. Kletzer
Keyword(s):  
Developing Countries ◽  
Debt Crisis ◽  
Capital Inflows ◽  
Private Capital

scholarly journals Are democratising countries rewarded with higher levels of foreign aid?

2015 ◽  
Vol 65 (4) ◽  
pp. 593-615
Author(s):  
Balázs Szent-Iványi
Keyword(s):  
Developing Countries ◽  
Foreign Aid ◽  
Sub Saharan Africa ◽  
Partner Country ◽  
Democratic Transitions ◽  
Aid Allocation ◽  
Sub Saharan ◽  
Over Time

The paper examines how flows of foreign aid have reacted to events of democratisation in developing countries. Using a panel dataset of 136 aid-receiving countries between 1980 and 2009, aid allocation regressions reveal that Western donors in general have tended to react to visible, major democratic transitions by increasing aid to the partner country, but no significant increases can be identified in the case of countries introducing smaller democratic reforms. The increases in aid flows are not sustained over time, implying that donors do not provide long-term support to nascent democracies. Also, democratisations in Sub-Saharan Africa do not seem to have been rewarded with higher levels of aid.

scholarly journals Foreign Capital and Economic Performance of Pakistan

2002 ◽  
Vol 7 (1) ◽  
pp. 1-32
Author(s):  
Minh Hang Le ◽  
Ali Ataullah
Keyword(s):  
Developing Countries ◽  
Human Capital ◽  
Foreign Aid ◽  
Economic Performance ◽  
Foreign Capital ◽  
Private Investment ◽  
Capital Inflows ◽  
Asian Countries ◽  
Foreign Private Investment ◽  
Foreign Capital Inflows

This paper reviews the trends of two types of foreign capital inflows, namely foreign aid and foreign private investment, to Pakistan. Like other developing countries, the volume of foreign aid to Pakistan has been decreasing. Meanwhile foreign private investment to Pakistan has increased, though not as sharply as that to other developing Asian countries. The study finds that the impacts of foreign capital, aid and private investment on the economic performance of Pakistan have been insignificant. This paper suggests that these consequences are due to the inadequate development of domestic institutional structure, human capital, and indigenous entrepreneurship.

scholarly journals Malawi

2020 ◽  
Vol 20 (288) ◽  
Author(s):  
Keyword(s):  
Presidential Elections ◽  
Balance Of Payments ◽  
External Financing ◽  
Government Budget ◽  
Exogenous Shock ◽  
Credit Facility ◽  
Budget Support ◽  
Financing Gap ◽  
The Government

Presidential elections in June 2020, a re-run of the canceled 2019 elections, resulted in a change of government, with President Chakwera securing 59 percent of the vote. The new administration is facing a rapid acceleration of COVID-19 cases in Malawi and adverse spillovers from continued deterioration of the global and regional economic situation, significantly worsening the macroeconomic outlook. Consequently, an additional urgent balance of payments need of 2.9 percent of GDP has arisen—bringing the total external financing gap in 2020 to 5.0 percent of GDP. The authorities have requested an additional disbursement of 52.1 percent of quota (SDR 72.31 million) under the “exogenous shock” window of the Rapid Credit Facility (RCF), where 30 percent of the disbursement would finance the government budget. This follows the May 1, 2020 Board approval of a 47.9 percent of quota RCF disbursement (without budget support). The authorities have cancelled the Extended Credit Facility (ECF) and expressed a strong interest in discussing a new ECF—better aligned with their new long-term growth and reform strategy—once conditions permit.

scholarly journals Impact of Foreign Aid on Fiscal Behaviour: A Case Study of Pakistan (1980-2000)

2002 ◽  
Vol 7 (1) ◽  
pp. 117-124
Author(s):  
Salman Ahmad
Keyword(s):  
Developing Countries ◽  
Foreign Aid ◽  
Foreign Exchange ◽  
Public Investment ◽  
Fiscal Constraint ◽  
Gap Models

Economists have been trying to study the linkages between aid inflow and government activities in developing countries. With the passage of time, the analysis has become more sophisticated. The development of two-gap models [for example, Chenery and Bruno(1962); and Chenery and Adelman(1966), among others] was an important contribution to the literature. More recently, two-gap models have been extended into threegap models. Iqbal (1995) added a fiscal constraint to the traditional saving and foreign exchange gap. In such cases, the fiscal constraint is intended to reflect potential limitations to finance public investment that may be required to support a given level of output.

scholarly journals Pakistan: Prospects for Private Capital Flows and Financial Sector Development

1996 ◽  
Vol 35 (4II) ◽  
pp. 853-883
Author(s):  
Mohammad Zubair Khan
Keyword(s):  
Developing Countries ◽  
Interest Rates ◽  
Debt Crisis ◽  
Recipient Country ◽  
Financial Sector ◽  
Stability Loss ◽  
Capital Inflows ◽  
Private Capital ◽  
Economic Policies ◽  
Portfolio Flows

In less than a decade after the debt crisis of 1982, developing countries have experienced a surge of capital inflows in recent years. This trend became more pronounced in the 1990s resulting in overall balance of payments surpluses and accumulation of reserves. Total private capital inflows to developing countries exceeded $173 billion in 1994, compared to annual average inflows of $34 billion during 1983–90 [World Bank (1995)]. Although the characteristics of capital inflows in this episode are different than in the period prior to the last debt crisis, nevertheless concerns about macroeconomic stability, loss in competitiveness, financial sector vulnerability and excessive borrowing remain the same. While the rise in inflows during 1991–93 was supported in part by low interest rates and weak economic activity in industrial countries, improved economic policies and prospects in most recipient countries also played an important role. The larger share in inflows of those countries that achieved greater progress in economic reforms, is evidence of the importance of recipient country policies. During this period, the composition of private flows to developing countries also became more diversified. Foreign direct investment (FDI) accounted for 45 percent of total equity inflows in 1994, with debt accounting for 32 percent and portfolio flows accounting for the remaining 23 percent.

The influence of inflation targeting on the pass-through effect of the exchange rate

2018 ◽  
pp. 70-84
Author(s):  
Ph. S. Kartaev ◽  
Yu. I. Yakimova
Keyword(s):  
Developing Countries ◽  
Monetary Policy ◽  
Exchange Rate ◽  
Inflation Targeting ◽  
Policy Regime ◽  
Short And Long Term ◽  
The Exchange Rate ◽  
Pass Through ◽  
The Impact

The paper studies the impact of the transition to the inflation targeting regime on the magnitude of the pass-through effect of the exchange rate to prices. We analyze cross-country panel data on developed and developing countries. It is shown that the transition to this regime of monetary policy contributes to a significant reduction in both the short- and long-term pass-through effects. This decline is stronger in developing countries. We identify the main channels that ensure the influence of the monetary policy regime on the pass-through effect, and examine their performance. In addition, we analyze the data of time series for Russia. It was concluded that even there the transition to inflation targeting led to a decrease in the dependence of the level of inflation on fluctuations in the ruble exchange rate.

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