Financing for development – where the treasure is buried

We won’t get development from global and domestic “tax and spend” alone. We should be focusing more on the huge untapped wealth locked up by policies and behaviour which distort the global economy, creating massive economic, environmental, and welfare losses for most of the world’s population.

How should donors work with the private sector?

We are enthusiastic about the growing interest in supporting private investment in developing countries, but it matters a lot how this is done. The tools that donor countries usually use to “crowd in” the private sector — guarantees and cheap loans — distort firms’ incentives by reducing their risks or increasing their rewards irrespective of how well they do. Donors should not pick winners.