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21. Navigating Debt Sustainability: An In-Depth Analysis of the IMF's Debt Sustainability Framework and Its Critique

Author:
Hasan Cömert, Güney Düzçay, and T. Sabri Öncü
Publication Date:
01-2025
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
This paper evaluates the IMF's debt sustainability analyses (DSAs), delving into their methodologies and implications and highlighting their problems. Since 2002, the DSAs have been the cornerstone of the IMF programs, providing the primary analytical tool to justify and determine the paths and targets specified. Although the DSAs evolved significantly over time, they have severe foundational problems. They rely heavily on strong assumptions and staff judgments, and thereby, they are primarily non-transparent. Secondly, there are significant issues regarding the conduct of DSAs. They have grown excessively complex, hindering consensus on components without necessarily improving assessment quality. Thirdly, the IMF makes very high-stakes decisions with low precision, relying on persistent over-optimism in growth forecasting and paving the way for tighter fiscal policies. Fourthly, the debt dynamics equation of DSAs is inconsistent with stock flow dynamics because it focuses heavily on the primary balance as the main driver. Fifthly, the IMF's framework does not pay enough attention to the underlying reasons for accumulating external debt in developing nations. It often treats external borrowing as a substitute for domestic debt without accounting for the asymmetric international financial architecture.
Topic:
Debt, Fiscal Policy, Sustainability, and IMF
Political Geography:
Global Focus

22. National Dialogues x Transitional Justice

Author:
Sylvia Servaes and David Bloomfield
Publication Date:
02-2025
Content Type:
Special Report
Institution:
Berghof Foundation
Abstract:
In the aftermath of conflict, National Dialogue and Transitional Justice can both contribute to reconciliation and prevent the recurrence of violence. But what is the nexus between the two? What are key shared characteristics, goals, and complementarities? In this paper, Sylvia Servaes and David Bloomfield explore the interlinkages between National Dialogues and Transitional Justice. They also discuss open questions on how both processes can be further integrated in practice to enhance their relevance and effectiveness. Over the last two decades, National Dialogues have been increasingly recognised as a comprehensive tool for preventing violent conflicts and reaching inclusive political settlements. However, questions remain on how to best integrate certain topics in the design of National Dialogues and how to meaningfully include specific societal groups. The series “National Dialogues at crossroads” aims at addressing this gap. It compiles lessons learned and recommendations on four cross-cutting issues: climate change, digitalisation, protest movements, and Transitional Justice.
Topic:
Transitional Justice, Reconciliation, Post-Conflict, and National Dialogue
Political Geography:
Global Focus

23. Introducing the Response to Sponsorship Dataset: Determinants of Responses by Target States to State Sponsors of Rebel Groups

Author:
Elif Hatun Kiliçbeylşa
Publication Date:
01-2025
Content Type:
Working Paper
Institution:
International Relations Council of Turkey (UİK-IRCT)
Abstract:
Empirical studies on the sponsorship of rebel groups have focused on understanding why and how supporter states help rebels, whether this engagement benefits the rebels, and the effects of sponsorship on the conflict outcomes. By comparison, the responses of target states to sponsorship behavior have been neglected despite the possibility of interstate crises, disputes, and conflict due to the sponsorship. This study introduces a new dataset, the Response Sponsorship Dataset (RSD), which measures target states’ responses toward state sponsors of rebel groups intending to terminate the sponsorship. The data includes information on the responses of 58 target states to 102 supporter states concerning the support of 150 rebel groups between 1991 and 2010, comprising 3719 observations. The RSD identifies diplomatic, economic, militarized, domestic, covert responses and inaction as target state responses as well as classifying them as coercive or non-coercive based on target states’ foreign policy engagements with sponsors. The RSD provides new opportunities for researchers and policymakers to analyze target responses with regards to conflict management and foreign policy as well as promising future research on support termination.
Topic:
Non State Actors, Alliance, Rivalry, Proxy Groups, and State Sponsorship
Political Geography:
Global Focus

24. Mediatised Terrorism: East-West Narratives of Risk

Author:
Seda Çolakoğlu
Publication Date:
01-2025
Content Type:
Journal Article
Journal:
Uluslararasi Iliskiler
Institution:
International Relations Council of Turkey (UİK-IRCT)
Abstract:
There is a growing body of literature in the social sciences that suggests that we live in a world surrounded by narratives that construct and interpret particular understandings of reality, that serve to make sense of the world. Following the understanding that everyone and everything has a narrative in the world we live in; it would not be wrong to say that these narratives appear in every shape and dimension. For instance, since the media also has a story to tell, we hear, watch, see and witness a wide variety of stories from the media. The media is therefore the producer and distributor of narratives. However, this emphasis has a deeper implication, namely that news stories are not simply a spiral of words describing events. This is because the media convey news to the receiving public by representing, constructing, and reconstructing it (through narratives). We frequently witness about various terrorist acts across the world via media. Saira Ali accurately examines this particular topic. Her book is for those who are concerned about how terrorism news is presented to audiences through the media and how it is made sense of in a country-specific and context-specific way. This approach also allows for a contextualisation of the construction of terrorism news narratives, within different cultural, social, and political contexts (p.5,10). The author embarks on an intellectual journey of curiosity regarding the mediatisation of terrorism in two distinct worlds. These worlds are Australia, where the risk of terrorism is quite low but it has taken drastic legal measures out of fear of global terrorism after 9/11, and Pakistan, with a more grey policy altough caught in the spiral of a complex terrorist atmospher. In this way, Ali’s intellectual effort is to interrogate the narrative that global terrorism is mostly damaging to Western civilisation by including the East in her analysis. Ali’s analysis is basically founded on an argument that “the reality of terrorism is constructed through discourse” (p. 6).
Topic:
Terrorism, Media, Book Review, and Narrative
Political Geography:
Global Focus

25. Diaspora Organisations in International Affairs

Author:
Mesut Özcan
Publication Date:
01-2025
Content Type:
Journal Article
Journal:
Uluslararasi Iliskiler
Institution:
International Relations Council of Turkey (UİK-IRCT)
Abstract:
Diasporas and their organisations, which traditionally aimed to serve their interest in the homeland and abroad, have long been studied under several social science disciplines, such as anthropology, sociology, political science, and geography. At the beginning of the 2000s, for instance, human and political geographers started to focus on diaspora realizing that it is a geographical concept, which addresses various geographical themes such as dispersion, boundaries, territory (as homeland), and identity. The “geographical turn” contributed to the concept theoretically, and also to transnationalism and migration studies empirically by which cases were reconsidered through the lens of geographical concepts, such as space, place, and time. Similar to geographers’ arguments, diaspora organisations (DO) -as a distinct form of collectivity- and their activities are very relevant to what we study in International Relations (IR), especially when it comes to exploring DOs’ role that transcends state borders in development, human rights, conflict, and peace. In that regard, attempts to introduce novel contributions from various disciplines have the potential to significantly enhance our comprehension of the theory of diaspora and its associated organizations.
Topic:
International Affairs, Diaspora, Book Review, and Organizations
Political Geography:
Global Focus

26. The Impact of Stereotyping on International Cyber Norm‑making: Navigating Misperceptions and Building Trust

Author:
Fan Yang
Publication Date:
02-2025
Content Type:
Policy Brief
Institution:
The Geneva Centre for Security Policy
Abstract:
Over the past three decades, cyberspace – a digital realm shaped by both technological and social dynamics – has evolved into a domain where a wide range of human activities now take place. These activities are marked by their anonymity, which complicates attribution, and their instantaneity, which challenges timely regulation. To address these challenges, states focus on two approaches: applying existing laws and creating new ones. While there is a general consensus that cyberspace should be governed by the rule of law, including international law, the application of existing legal frameworks to cyberspace remains an evolving challenge both in terms of state practice and academic discourse. At the same time, the international community has consistently sought to develop new norms to promote good governance in cyberspace. Against this backdrop, states – especially those with advanced cyber capabilities – are engaging in a competitive game of norm-making, striving to exert influence in shaping international rules to govern cyberspace. As part of this process, states often categorise each other by trying to highlight their counterparts’ most distinct characteristics. While such labelling is common in diplomatic interactions, it is particularly problematic in the context of international cyber norm-making. Labels reflect and reinforce stereotypes, which often oversimplify the complexities of states’ behavioural patterns in cyberspace and their underlying logic. States are thus roughly grouped by opposing indicators, such as those viewing cyberspace as a global commons versus sovereign territory, those advocating for an interconnected free Internet versus a fragmented “splinternet”, or those favouring multistakeholderism versus multilateralism as the dominant approach to the governance of cyberspace. Once established, these stereotypes are difficult to dismantle and can lead to distorted perceptions that obstruct constructive dialogue. This GCSP Policy Brief aims to identify the potential security challenges posed by stereotyping in international cyber norm-making processes. It then illustrates the policy implications of this problem and offers policy recommendations.
Topic:
Security, Cybersecurity, Norms, Cyberspace, and Trust
Political Geography:
Global Focus

27. Managing Global Biological Risks: Towards a Security-Health Coordination Framework

Author:
Jose M. L. Montesclaros, Jeselyn, and Mely Caballero-Anthony
Publication Date:
04-2025
Content Type:
Commentary and Analysis
Institution:
Centre for Non-Traditional Security Studies, S. Rajaratnam School of International Studies
Abstract:
The task of securing the world against biological risks is complicated by enforcement and information challenges. A security-health coordination framework is crucial for securing cooperation among a diverse set of actors with different but converging mandates.
Topic:
Security, Biosecurity, Crisis Management, Risk, Public Health, and COVID-19
Political Geography:
Global Focus

28. Social contracts and the UN’s “Common Goals”: conceptualising a new role for international organisations

Author:
Markus Loewe and Tina Zintl
Publication Date:
01-2025
Content Type:
Policy Brief
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
Researchers, policymakers and the representatives of international organisations increasingly use the term “social contract” to describe relations between societal groups and a state. The United Nations (UN) Secretary-General, for example, has declared that “now is the time to renew the social contract between Governments and their people and within societies” in his report Our common agenda (UN, 2021, p. 5). Likewise, the Director General of the International Labour Organization (ILO) has recently issued a report Towards a renewed social contract (ILO, 2024). The question is whether all those applying the term “social contract” have a common understanding of its meaning. We suggest defining a social contract as the “entirety of explicit or implicit agreements between all relevant societal groups and the sovereign (i.e. the government or any other actor in power), defining their rights and obligations toward each other” (Loewe, Zintl, & Houdret, 2021). Today, all countries with some form of government have national social contracts, but there are wide variations between them. For instance, some social contracts are more inclusive than others, giving more rights to society. Some treat different societal groups differently, depending on their respective power and the interests of the government. And, crucially, only some social contracts consider, at least to some degree, the interests of those who are, by definition or because of their limited power, unable to voice their concerns in any renegotiation of the social contract – children, future generations, the environment, foreigners and marginalised social groups. The UN Secretary-General’s report rightly complains that people in many countries feel increasingly alienated from the social contract (UN, 2021, p. 22) and that social contracts ignore the rights of future generations. In many countries, social contracts give rights to some influential groups in society to use available resources without consideration for less powerful groups, future generations and environmental concerns. International organisations thus have four important roles to play. First, they can support the national process of social contract renegotiations: ease the dialogue between all interest groups inside member countries, encourage the involvement of less powerful actors and provide neutral and open fora for the negotiations. Second, they can engage in a dialogue with member states that are reluctant to reform social contracts, emphasising that such reform can mitigate or help to prevent terrorism, violent protest and mass migration. Third, international organisations can prepare themselves to get involved when shocks happen in particular member countries and use the momentum to foster substantial reforms. Fourth, international organisations should continue building supra-national social contracts. All too often, the parties of national social contracts negotiate unsustainable rules at national level that, for instance, expose workers to health hazards or harm the environment, with the argument that they have to be able to compete with other countries. International agreements are therefore important to establish minimum norms and standards, prevent a race to the bottom and reinforce multilateralism.
Topic:
International Organization, United Nations, Multilateralism, and Social Contract
Political Geography:
Global Focus

29. Global health at a crossroads: policy recommendations in light of the Lancet Global Health 2050 Report

Author:
Christoph Strupat, Marco Schäferhoff, Martin Siegel, and Anna-Katharina Hornidge
Publication Date:
01-2025
Content Type:
Working Paper
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
At a time of global crisis and competing priorities, investing in health is among the most impactful and cost-effective decisions governments and stakeholders can make. Beyond being a fundamental right, health is a catalyst for growth, stability and resilience – particularly in uncertain times. The new Global Health 2050: the path to halving premature death by mid-century (Global Health 2050) report (Jamison et al., 2024) of the Lancet Commission on Investing in Health (the Commission) builds on a legacy of evidence-driven reports to provide strategies for making health a cross-cutting enabler of the Sustainable Development Goals (SDGs). Global Health 2050 provides a roadmap for further health improvements in all countries by mid-century, arguing that by 2050 countries can reduce by 50% the probability of premature death (PPD) in their populations. The Commission calls this goal “50 by 50”. Germany has solidified its role in global health through significant investments in the health sector and by designating global health as a political priority, as demonstrated by its Global Health Strategy and the inclusion of global health as one of the core themes of the Federal Ministry for Economic Cooperation and Development (BMZ). Given this political priority, it is essential to assess the implications of the Global Health 2050 report for Germany’s global health agenda, especially as global health stands at a crossroads following the withdrawal of the United States (US) from the World Health Organization (WHO) and cuts to its global health programmes. Therefore, the aim of this policy brief is to build upon the Commission’s findings and draw from scientific evidence to provide key recommendations for Germany’s global health agenda. Five recommendations have been synthesised that align with Germany’s global health engagement and offer promising strategies to help achieve the 50 by 50 goal: 1. Sustain or ideally increase funding for the Gavi, The Vaccine Alliance, and the Global Fund to Fight AIDS, Tuberculosis and Malaria at the upcoming replenishment conferences and strengthen Germany’s global health leadership through strong bilateral support, investments in pandemic preparedness and response (PPR) and better interministerial coordination. 2. Reconsider non-communicable diseases (NCDs) in future strategic direction of German international cooperation by reducing financial and geo-graphical barriers to access to medicines and addressing key NCD risk factors. 3. Promote health taxes on tobacco, alcohol, and sugar-sweetened beverages that can serve as an effective strategy to improve public health and generate domestic revenue. 4. Increase funding for R&D in neglected diseases. Expand regional manufacturing, and enhance global health innovation coordination to strength-en global health security and reduce dependence on external supply chains. 5. Nepal serves as a good example of Germany’s bilateral health and social protection support: advancing the 50 by 50 goal could be achieved by strengthening national health insurance, addressing climate risks, expanding health taxes and enhancing pharmaceutical access through the Arrow mechanism.
Topic:
Development, Investment, Public Health, Global Health, and Disease
Political Geography:
Global Focus

30. Enhancing public works programmes: sustainable impact through participatory asset creation and digitalisation

Author:
Francesco Burchi and Tekalign Gutu Sakketa
Publication Date:
01-2025
Content Type:
Policy Brief
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
Public works programmes (PWPs) are widely used social protection instruments in low- and middle-income countries. Participants carry out temporary, labour-intensive works in exchange for cash or in-kind compensation. The available empirical evidence indicates that these programmes are usually effective in improving outcomes such as food security and earnings in the short term, but these positive effects rarely persist in the long term. Our knowledge of PWPs’ effectiveness is, however, incomplete as scholars have mostly examined programme impacts through the wage channel, largely neglecting the skill-development and, especially, the asset channels. PWP participants engage in the construction of assets, such as roads, check dams and sewage systems, that could provide important benefits for the whole community. Without assessing these effects, it is normal to arrive at the general (biased) conclusion that cash transfers (CTs) are always more cost-effective than PWPs. Moreover, the effectiveness of PWPs largely depends on programme design, implementation and context. Based on the existing empirical evidence and our recent fieldwork to analyse Malawi’s PWP, this policy brief provides the following policy recommendations for how to enhance the potential of these programmes. • Policy-makers should design PWPs to guarantee stable, reliable employment; set wages not higher than market levels but high enough to incentivise participation; ensure transparency in the targeting, possibly by involving communities and at the sametime avoiding elite capture; align the timing of work cycles with local agricultural calendars; and assign tasks in a way that reduces travel burdens,especially for women. • Policy-makers should promote active community participation in the identification and maintenance of the assets created through PWPs. Evidence points to the importance of community participation for the implementation of higher quality infrastructure and better long-term maintenance. Only in this way, can these assets provide sustainable benefits not just for programme participants, but for the entire community. Approaches like those used in Ethiopia and Malawi can serve as models to enhance active community participation in the programme cycle. • Digitalisation of PWPs (and social protection ingeneral) should be promoted as it offers great advantages, but specific measures should be adopted to avoid their negative consequences: 1. The construction of a digital registry of beneficiaries is a great tool to reach the intended beneficiaries and coordinate the various schemes. Development cooperation actors should provide technical support for the creation and updating of these databases, then leave them in the hands of national institutions. 2. The digitalisation of reporting systems for work activities is likely to improve the accuracy and efficiency of the information reported. To achieve this, it is essential to provide the “digitisers” withproper training. 3. It is important to move from physical cash payments to e-payments, but it is firstly necessary to ensure adequate digital literacy through training. Moreover, to compensate for the impossibility to interact with programme officials at the time of payment, PWPs should include complaint handling points, as is done in India.
Topic:
Development, Digitalization, Assets, and Social Protection
Political Geography:
Global Focus

31. Can guarantees effectively leverage financing for SMEs in low- and middle-income countries?

Author:
Bao-We-Wal Bambe
Publication Date:
01-2025
Content Type:
Working Paper
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
Achieving the Sustainable Development Goals (SDGs) will require significant financing and investment, particularly as growing challenges from climate events highlight the insufficiency of public funds to meet the 2030 Agenda (World Economic Forum 2024). Private capital for low- and middle-income countries (LMICs) surged in recent years, with significant commitments from multilateral development banks (MDBs). However, the financing gap to achieve the SDGs remains sizable, highlighting the need for greater effort to mobilise much larger private capital for sustainable development. In recent years, guarantees have emerged as a key leveraging mechanism. They are designed to mitigate high investment risks to support private capital mobilisation in LMICs. However, despite some progress, guarantees are used sparingly, suggesting considerable scope for increasing their scale, as highlighted by the G20 Independent Expert Group (IEG). This Policy Brief examines whether guarantees can serve as an effective leveraging mechanism for small and medium-sized enterprises (SMEs) in low- and middle-income countries (LMICs). This is especially so because SMEs remain largely hampered by poor access to finance, despite their key role in providing jobs for the local population and contributing to economic growth. Moreover, in the face of climate change, SME adaptation requires new investments in climate-resistant technologies and clean energies, highlighting the need for additional financing amid severe constraints on access to capital. Guarantees can complement other leveraging mechanisms, further easing financing constraints for SMEs in LMICs. Guarantees can absorb some of the risks associated with investment, offering financial institutions greater security. This added security can, in turn, help improve access to capital for SMEs. On the other hand, they can also help catalyse private sector investment in LMICs. Recognising both the potential benefits and short-comings of guarantees, this Policy Brief provides the following policy recommendations on how guarantees could be extended efficiently to the SME sector in LMICs. • Guarantees should be directed at financial institu-tions to mitigate portfolio risk and actively promote lending to small projects or SMEs in high-risk sectors, particularly those with the potential to generate substantial economic, environmental, or social benefits. • Complement guarantees with additional measures to improve SMEs’ financial management, enhance risk assessment, and strengthen technical capacity through professional training and advisory services. • Implement partial credit guarantees to require financial institutions to retain a share of the risk, thereby reducing moral hazard and promoting rigorous analyses of borrowers’ creditworthiness. Complement these guarantees with conditionalities and monitoring criteria, such as regular reporting, to ensure the incrementality and additionality of guaranteed financing. Enhance the harmonisation of guarantees with other leveraging mechanisms, improve coordination among MDBs and DFIs, and streamline guarantee frameworks to achieve greater efficiency. • Recognise that guarantees alone cannot address structural vulnerabilities and institutional weakness in LMICs; a long-term commitment from decision-makers is essential to improve institutional and economic performance.
Topic:
Development, Finance, Sustainable Development Goals, and Investment
Political Geography:
Global Focus

32. A new development paradigm and strategy for the OECD (and beyond): what should the ‘D’ of OECD stand for?

Author:
Andy Sumner, Stephan Klingebiel, and Arief Anshory Yusuf
Publication Date:
01-2025
Content Type:
Policy Brief
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
This paper examines the evolving role of the Organisation for Economic Co-operation and Development (OECD) in addressing global development challenges in the mid-2020s. At a time when a new development strategy is being drafted for the OECD, we provide a fresh perspective by exploring the tensions inherent in the definition of “development” and asking whose development the OECD seeks to support. Historically, the OECD extended its remit beyond its membership through mechanisms such as Official Development Assistance (ODA). However, considering the increasing prominence of South–South cooperation, private sector investment and intensifying geopolitical competition, ODA alone is insufficient for sustainable development needs, and for many countries of the Global South ODA no longer matters as much as it used to due to the growth of domestic resources. One of the most significant shifts within the OECD itself in recent years is in its identity, largely as a result of its expanding membership. This now totals 38 countries, including some from the Global South, and this trend is set to continue, with a set of Southern countries currently in the accession process. While this enlargement may strengthen the OECD’s relevance in a multipolar world, it also challenges the organisation’s traditional identity as a “club of mostly rich countries”, as The Economist has often referred to it. Employing a novel 2x2 matrix framework, we delineate four strategic scenarios for OECD development strategy: (i) “traditional development” within OECD member states (D-within), (ii) traditional development beyond OECD membership (D-beyond), (iii) “frontier development” within OECD member states, and (iv) frontier development beyond the organisation’s membership. The use of the term “traditional development” refers to an aggregate growth orientation of development without reference to inclusivity or sustainability. “Frontier development” is then the converse. The authors argue for an OECD development strategy that bridges “D-within” and “D-beyond”, by acknowledging the transnational spillover effects of the domestic policies of OECD countries on the Global South. Further, across the matrix framework, we advocate for the OECD to strengthen its engagement with the analysis and promotion of policy coherence for sustainable development (PCSD) as a means of providing global leadership in sustainable development. In theory, promoting PCSD necessitates the integration of economic, social and environmental dimensions across all policy areas, alongside a commitment to addressing long-term and transboundary impacts. Further, we highlight the imperative of engaging non-member states to enhance the inclusivity and relevance of the OECD’s development strategy within an increasingly multipolar global order. In sum, we argue that the OECD is at a pivotal juncture. Its capacity to adapt and redefine its developmental mandate will determine its future relevance in the global governance architecture. By prioritising leadership on global sustainable development, PSCD and an inclusive approach to non-OECD members, the OECD has the potential to serve as a transformative force.
Topic:
Development, International Cooperation, and OECD
Political Geography:
Global Focus

33. Financing for development: from Monterrey to Seville

Author:
Stephan Klingebiel, Jorge A. Pérez-Pineda, and Kathrin Berensmann
Publication Date:
01-2025
Content Type:
Working Paper
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
The United Nations financing for development process, including the Fourth International Conference on Financing for Development (FfD4) in Seville in 2025, is an important building block to foster global cooperation amid the current geopolitical tensions and multiple crises that have led to increased development financing needs on the one hand, and increased spending on the other, with the OECD estimating that the financing gap in funding required for developing countries to achieve the Sustainable Development Goals is $3.9 trillion per year. Against this backdrop, a coordinated international effort is essential to increase the scale and effectiveness of development financing and promote sustainable development globally, particularly in line with the 2030 Agenda. The overarching goal of the FfD process, including FfD4, is to mobilise adequate financial resources for the sustainable development of countries in the Global South, and to design appropriate architectures for development and sustainable finance. The FfD process is unique in that it takes a holistic approach, involving all sources of development finance and all public and private stakeholders. In this respect, the FfD process has an extraordinary convening power. The purpose of this Discussion Paper is to provide meaningful input to the preparatory process of FfD4 by offering insights into key challenges, opportunities and innovative approaches. The paper aims to contribute to the broader dialogue on financing for sustainable development and support informed decision-making for a robust and inclusive development agenda beyond 2030. Topics range from reforms of official development assistance, innovative approaches to private-sector and sustainable finance, and innovative reforms of multilateral development banks.
Topic:
Development, United Nations, Finance, Sustainable Development Goals, and OECD
Political Geography:
Global Focus and Global South

34. How to deal with the current debt crisis of developing countries?

Author:
Jürgen K. Zattler
Publication Date:
01-2025
Content Type:
Working Paper
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
Many countries are still struggling with high and rising debt levels. The economic impact of the pandemic, as well as some longer-term structural factors, explain this situation. The key problem is the high level of debt service relative to government revenues, which makes it difficult to address growing development, social and climate challenges. As this is a particular problem for low-income countries (LICs) and lower-middle-income countries (LMICs), the focus should be on these countries. But even within this group, the situation is not uniform. A differentiated approach with different components is therefore needed, depending on countries’ individual situations and their own priorities and choices. There have been many contributions to this debate and proposals on how to address the current problems. This paper builds on some of those contributions presenting a practical and coherent approach to address the current debt crisis which focuses as far as possible on incentives for debtor countries and private creditors. Importantly, a distinction should be made between countries with high debt levels that are at risk of debt distress and those with liquidity problems. Therefore, debt sustainability assessments (DSAs) are needed to decide which countries (a) are not in debt distress, (b) have an insolvency problem, and (c) have a liquidity problem. The International Monetary Fund (IMF) and World Bank should be asked to classify all LICs and LMICs accordingly, based on updated DSAs, using a prudent approach with conservative projections. These DSAs must emphasise debt service indicators. For countries with liquidity problems, they need to identify those countries where the problem is of a longer-term nature, with a risk that the liquidity squeeze will turn into acute debt distress. All LICs and LMICs facing insolvency or liquidity problems should be offered a moratorium similar to the Debt Service Suspension Initiative (DSSI) to give them breathing space (of 2-3 years). The expectation is that this would help countries with liquidity problems to maintain basic social and economic services until market conditions improve or debt relief is implemented. In cases where debt service remains high after the moratorium expires, the country would be expected to request debt relief. Countries at risk of default would be expected to use the period of the moratorium to engage promptly in restructuring discussions and to prepare negotiations with creditors on a debt relief programme. The IMF would make its resources conditional on a suspension of debt service payments. The question is whether private creditors, including sovereign bondholders, should be required to participate. It is suggested that a distinction be made between two categories of countries. For countries at risk of insolvency, including those with longer-term liquidity problems, the moratorium should be conditional on private participation on comparable terms, as their creditworthiness is likely to be affected anyway. In contrast, with countries facing short-term liquidity problems the approach should be more flexible. While pressure on private creditors to join a standstill should be maximised, this should be complemented by strong incentives. Countries with unsustainable debt would request treatment under a reformed G20 Common Framework for Debt Treatment (CF) with the option of a more comprehensive debt relief arrangement (“CF+”), including the following enhanced or new components: • At the beginning of the process, countries would have to present a “Just Green Transition Programme” (JGTP), monitored by the IMF and the World Bank. • The CF+ would be accompanied by more comprehensive debt relief, thus creating more fiscal space to allow the country to finance transformational and social investments. Debt service after rescheduling should be based on DSAs, which pay greater attention to Sustainable Development Goal (SDG) investments and countries’ particular circumstances, leaving countries with substantial room to absorb shocks. The objective would be to limit the debt burden to external creditors as a share of revenue after rescheduling to around 10-15 per cent. • For those countries where a large part of the debt service will be due to multilateral creditors, the involvement of multilateral institutions should be considered. This should be the case for those multilateral creditors which are not willing, or able, to provide positive net flows at highly concessional terms. • The issuance of “Brady-like” bonds could be considered for specific country cases. The issuance of Brady-like bonds could be an incentive to maximise private creditor participation in exchanging old debt for new bonds with a significant discount or “haircut”.
Topic:
Debt, Development, Sustainability, and COVID-19
Political Geography:
Global Focus

35. Macroprudential policies and private domestic investment in developing countries: an instrumental variables approach

Author:
Bao-We-Wal Bambe
Publication Date:
01-2025
Content Type:
Working Paper
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
This paper examines the effect of macroprudential policies on private domestic investment using a panel of 87 developing countries from 2000 to 2017. Our instrumental variables strategy exploits the geographic diffusion of macroprudential policies across countries, with the idea that reforms in neighbouring countries can affect the adoption or strengthening of domestic reforms through peer pressure or imitation effects. The findings indicate that the tightening of macro-prudential policies significantly reduces private domestic investment. This effect holds for both instruments targeting borrowers and those targeting financial institutions, and is subject to heterogeneity depending on several economic and institutional factors. The transmission channel analysis highlights that the negative impact of macroprudential policies on investment is primarily driven by a reduction in credit supply and financial inclusion.
Topic:
Development, Economics, Finance, Investment, and Macroprudential Policies
Political Geography:
Global Focus

36. Recent Global Business Cycles: Characteristics and Implications

Author:
Sang-Ha Yoon
Publication Date:
02-2025
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
The analysis of economic patterns from late 1999 to 2023 reveals significant changes in how the world's economies connect with each other. Our research shows a clear trend toward more varied economic patterns, with regional and country-specific factors becoming more important than global influences. This shift became particularly noticeable after the COVID-19 pandemic, where we saw global factors having less influence on national economies than before. The study's findings have important implications for economic policy making. Countries need to develop flexible approaches that can adapt to both global and regional economic changes. At the same time, they must strengthen regional economic cooperation while maintaining domestic economic stability. The findings also highlight the importance of building better systems for responding to economic crises, while considering both regional and global factors in economic policy decisions. These changes suggest that the global economy is becoming more complex, with different regions and countries showing more independent movement than before. As this trend continues, the ability to balance global, regional, and domestic economic relationships will become increasingly important for maintaining economic stability and promoting growth.
Topic:
Economics, Business, Economic Growth, and COVID-19
Political Geography:
Global Focus

37. Funding Climate Mobility Projects: Key Players and Strategies for Growth

Author:
Lawrence Huang and Samuel Davidoff-Gore
Publication Date:
03-2025
Content Type:
Policy Brief
Institution:
Migration Policy Institute (MPI)
Abstract:
While international donors have long supported responses to displacement driven by natural disasters, climate change is reshaping the challenge at hand. It can worsen extreme weather events such as storms while also posing slower-onset threats such as desertification and sea level rise, which can directly and indirectly force people to move. The growing scale and complexity of climate-related mobility thus requires a paradigm shift in global funding for responses. This issue brief provides an overview of how development funders are responding to climate mobility issues, highlights entry points for donors interested in engaging on this issue, and outlines common barriers and strategies to overcome them. It examines development assistance provided via both bilateral cooperation and multilateral funding, through multilateral development banks, global climate funds, and more. This research draws on insights shared by representatives of donor governments, philanthropic foundations, and multilateral development banks as part of a multi-year Donor Community of Practice on Climate Mobility.
Topic:
International Cooperation, Migration, Governance, Mobility, and Climate Refugees
Political Geography:
Global Focus

38. Advancing locally led evaluations: Practical insights for humanitarian contexts

Author:
Hana Abul Husn and Dorothy Mae Albiento
Publication Date:
01-2025
Content Type:
Special Report
Institution:
ALNAP: Active Learning Network for Accountability and Performance
Abstract:
Evaluation is widely recognised as a way to learn and to hold humanitarian action to account. Over time, the field of evaluation has evolved because of criticisms of traditional or classic models that are seen as top-down, quantitative and highly technical. Many evaluators are urgently calling for a focus on social justice and equity, as they feel the role and power of local voices in evaluation needs to be re-examined. Alongside humanitarian sector-wide discussions on the need to decolonise and localise aid is a call to re-examine and reframe evaluation practice. Locally led humanitarian action and the growing attention to accountability to populations affected by crisis both support the case that local evaluators are better able to lead community-centred evaluations based on their deeper understanding of local contexts, cultures and values. The overarching objective of this scoping paper is to raise the visibility and accessibility of locally led evaluation among relevant stakeholders in humanitarian contexts. We hope that it can be more easily applied and recognised as having greater value. The paper summarises the opinions and experiences of evaluation stakeholders captured during informal discussions, interviews and scoping events, as well as evidence from relevant literature. We explore what is meant by locally led evaluation and the principles underpinning it, as well as why, how, and by and for whom evaluations are carried out. More specifically, we suggest how evaluation stakeholders can meaningfully engage with and participate in locally led evaluations.
Topic:
Development, Humanitarian Aid, Accountability, and Evaluation
Political Geography:
Global Focus

39. Practical steps to advance locally led evaluation

Author:
Hana Abul Husn and Dorothy Mae Albiento
Publication Date:
01-2025
Content Type:
Special Report
Institution:
ALNAP: Active Learning Network for Accountability and Performance
Abstract:
Stakeholders working to advance a locally led evaluation agenda in humanitarian contexts should consider several enablers (what has worked), barriers (major challenges blocking the way) and practical solutions. In this section, we draw together the reflections from our discussions with evaluation stakeholders to outline practical steps. These steps do not form an exhaustive list of what can be done to advance locally led evaluations, they do not need to be followed in a fixed order, and they might not be applicable in every context. However, they can be used as a starting or continuation point to inspire action. The practical steps are divided into long-term strategies for the overall evaluation function (LTS) and more immediate actions for ongoing or upcoming evaluations. LTS are grouped under three topics: Shaping evaluation culture, policies and strategies; Developing know-how; Establishing and maintaining critical relationships.
Topic:
Humanitarian Aid, Stakeholders, Monitoring, and Evaluation
Political Geography:
Global Focus

40. Future research and learning: Shaping agendas to inform more people centred humanitarian action

Author:
Veronique Barbelet
Publication Date:
01-2025
Content Type:
Special Report
Institution:
ALNAP: Active Learning Network for Accountability and Performance
Abstract:
In recent years, several critical reform agendas - localisation, accountability to affected populations (AAP) and inclusion – have built momentum at the heart of a push for quality humanitarian action grounded in equity and the experiences of crisis-affected people. Despite this progress, ALNAP ’s recent review of outcomes and practices highlights the inadequacy of current methodologies and a particularly weak evidence base around these reforms (although better for localisation). It revealed that while it is likely good practices do exist in the field, they often have not been fully evidenced, researched or widely disseminated. The review also underlined the need to reflect on and better inform research and learning.
Topic:
Humanitarian Aid, Reform, Accountability, Localization, and Gender Equality
Political Geography:
Global Focus