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Begin New Search Topic Finance Content Type Policy Brief Publication Year within 3 Years

1. U.S. Health Care from a Global Perspective, 2022: Accelerating Spending, Worsening Outcomes

Author:
Munira Z. Gunja, Evan D. Gumas, and Reginald D. Williams II
Publication Date:
01-2023
Content Type:
Policy Brief
Institution:
Commonwealth Fund
Abstract:
In the previous edition of U.S. Health Care from a Global Perspective, we reported that people in the United States experience the worst health outcomes overall of any high-income nation.1 Americans are more likely to die younger, and from avoidable causes, than residents of peer countries. Between January 2020 and December 2021, life expectancy dropped in the U.S. and other countries.2 With the pandemic a continuing threat to global health and well-being, we have updated our 2019 cross-national comparison of health care systems to assess U.S. health spending, outcomes, status, and service use relative to Australia, Canada, France, Germany, Japan, the Netherlands, New Zealand, Norway, South Korea, Sweden, Switzerland, and the United Kingdom. We also compare U.S. health system performance to the OECD average for the 38 high-income countries for which data are available. The data for our analysis come from the Organisation for Economic Co-operation and Development (OECD) and other international sources (see “How We Conducted This Study” for details). For every metric we examine, we used the latest data available. This means that results for certain countries may reflect the height of the COVID-19 pandemic, when mental health conditions were surging, essential health services were disrupted, and patients may not have received the same level of care
Topic:
Health, Health Care Policy, Inequality, and Finance
Political Geography:
North America and United States of America

2. Will China's impending overhaul of its financial regulatory system make a difference?

Author:
Martin Chorzempa and Nicolas Véron
Publication Date:
03-2023
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
China's reshuffle of its financial supervisory architecture announced in March, like previous changes, appears incremental rather than radical. It will not, however, resolve the main challenge hobbling China’s financial system, which is not linked to specific choices of supervisory architecture but rather to the unfinished transition from a state-directed to a market-based financial system and the way the Chinese Communist Party's pervasive role creates obstacles to good corporate governance of individual financial firms and to the independence of supervisory authorities. Too often, political authorities and sometimes the supervisors themselves intervene directly in financial firms’ decisions to allocate capital and credit, occasionally resulting in failures of risk control and risk management. The authors argue that Chinese reformers should aim at a clearer and more rigorous division of responsibilities, in which financial firms manage financial opportunities and risks, and supervisors are exclusively focused on their respective public policy mandates.
Topic:
Economics, Regulation, Finance, and Corporate Governance
Political Geography:
China and Asia

3. Financing Loss and Damage at Scale: Toward a Mosaic Approach

Author:
Michael Franczak
Publication Date:
05-2023
Content Type:
Policy Brief
Institution:
International Peace Institute
Abstract:
The historic decision on loss and damage (L&D) at the 2022 UN Climate Change Conference (COP27) calls for a new fund and funding arrangements focused on addressing L&D. It also tasks a Transitional Committee to prepare recommendations on the new fund and funding arrangements for adoption at the 2023 UN Climate Change Conference (COP28) in Dubai. This decision reflects a recognition that existing funding arrangements are grossly inadequate to address the escalating scale of L&D. Addressing L&D will require both enhancing these existing arrangements and creating a new fund and funding arrangements, forming a mosaic of solutions across countries, institutions, and markets. This paper aims to aid the Transitional Committee and other stakeholders by providing an initial sketch of that mosaic. First, it examines existing arrangements, modalities, and sources of funding for addressing L&D from UN humanitarian agencies, multilateral development banks and international financial institutions, and insurance and bond markets. Second, it proposes reforms to existing arrangements that would address key finance gaps and bottlenecks. Third, it identifies elements of a new L&D fund that would complement existing arrangements and make use of innovative finance (including levies and bond issuances) to operate at scale. With roughly six months left until COP28, the Transitional Committee will need to work efficiently to achieve its mandate, which includes determining the fund’s institutional arrangements, modalities, structure, governance, sources of funding, and coordination and complementarity with existing funding arrangements. To this end, the paper recommends that it should: Begin securing financing before COP28, particularly innovative financing, which takes longer to secure than traditional donor contributions; Consult with the private sector to determine its role, including in the use of insurance mechanisms and risk pools, frontloading, and connections between L&D and jobs; Determine the form and role of triggers, including for slow-onset events; Consider how to address noneconomic losses, including displacement and forced migration; and Identify the actions, mechanisms, and institutions required to operationalize the fund, including an internal or external coordination mechanism.
Topic:
Climate Change, Development, United Nations, and Finance
Political Geography:
Global Focus

4. The longer-term fiscal challenges facing the European Union

Author:
Jeromin Zettelmeyer, Gregory Claeys, Zsolt Darvas, Lennard Welslau, and Stavros Zenios
Publication Date:
04-2023
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
The pandemic and subsequent price shocks triggered by Russia’s invasion of Ukraine, have increased longer-term fiscal pressures in the European Union through higher debt, higher expected real interest rates and higher public investment needs. This Policy Brief makes some simple quantitative assessments of those effects and discusses policy implications, with the following results. First, long-term increases in primary fiscal balances required to offset higher debt and higher expected real interest rates are in the range of 0.5 percent to 1.5 percent of GDP for most EU countries. However, because of pre-existing differences in fiscal space, not all countries will need to undertake that adjustment, while some countries may need to adjust by substantially more. Among the 21 EU countries for which we have data to undertake this analysis, 14 will need to adjust by more than they were planning to do by 2025. Second, the required additional fiscal adjustment looks manageable, although it is substantial in some cases. To achieve medium-term debt-reducing primary balances, several EU countries will need to raise primary balances by more than 2 percent of GDP above their 2025 target, but no country will need additional fiscal adjustment of more than 3 percent of GDP. Third, market data suggests that the future path of real interest rates is very uncertain. Compared to the period immediately preceding the pandemic, longer-term expected real interest rates have increased by about 2 percentage points but remain low on average, at about 1 percent in real terms. Future developments depend on whether the structural factors that led to low interest rates in the first place persist or unwind. While interest rates might decline again, fiscal policymakers should not make plans that assume such a decline. Fourth, public spending needs for additional defence and climate spending run well above 1 percent of GDP per year. These needs do not appear to have been incorporated into current fiscal baselines, and hence will come on top of the adjustment described above. To ensure that fiscal adjustment does not defeat its purpose by slowing growth, it is essential that it is conducted gradually. In countries that require such adjustment, it should start as soon as cyclical conditions allow.
Topic:
Governance, European Union, Finance, and Fiscal Policy
Political Geography:
Europe

5. Will China’s new financial regulatory reform be enough to meet the challenges?

Author:
Martin Chorzempa and Nicolas Veron
Publication Date:
03-2023
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
Effective financial supervision plays a crucial role in maintaining financial stability and a healthy financial system. China’s leadership has made financial risk a core priority, and in reforms approved in March 2023, it reassigned regulatory responsibilities, creating a new supervisory body that will take over some responsibilities from the central bank, the banking and insurance regulator, and the securities regulator. The aim is that a change to the financial supervisory architecture (who does what in financial supervision) will make China’s system more effective and stable. In this policy brief, we argue that this incremental reform will not solve the core issues China faces in financial supervisory effectiveness. We provide an overview of China’s large and complex financial system, including its largely state-owned banks (some of which are the largest in the world by assets), securities markets and other financial intermediaries. Traditional divisions between different types of activities and institutions have been blurred by the rise of large financial conglomerates, risk-transfer techniques and internet-based finance. Reforms in 2018 to China’s supervisory architecture did not eliminate perceived shortcomings, including failures to effectively regulate financial conglomerates, fintech and regional banks. We then survey global benchmarks against which China’s financial supervisory architecture can be compared, including the United States and European Union. China’s supervisory system is already more streamlined, at least on paper, than either of these most comparable global counterparts. Like them, China’s system does not correspond exactly to any of the three textbook archetypes of supervision: sectoral, twin-peaks or integrated supervision. Ultimately, the effectiveness of China’s financial supervisory architecture suffers from excessive state intervention in the financial system through other channels, including through the unique and pervasive influence of the communist party, which hampers supervisory independence and makes it difficult to establish accountability for regulatory failures. While the recently announced reform may improve coordination across supervisory bodies, coordination within the new quasi-integrated supervisor, across central departments, and between them and local branches, will remain a challenge.
Topic:
Reform, Regulation, Finance, and Financial Stability
Political Geography:
China and Asia

6. The potential of sovereign sustainability-linked bonds in the drive for net-zero

Author:
Alexander Lehmann and Catarina Martins
Publication Date:
03-2023
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
European Union governments have for some years issued green bonds that raise funds for climate-related spending. These bonds have been received well in capital markets but because they promise a certain use of proceeds, they complicate budget management and may not match investors’ claims of having an impact on national climate policies. Public commitments made by major investors and asset owners suggest that limiting climate transition risks and the assessment of the alignment of sovereigns with net-zero targets will now become key determinants of portfolio allocation. Yield differentials in bond markets are already beginning to reflect transition risks that arise from the inadequate pursuit by issuers of climate targets. Unlike standard green bonds, sustainability-linked bonds (SLBs) create a link between performance (outcome) indicators and the financial terms of the bonds. SLBs have grown rapidly in importance in private markets and are now being assessed by sovereign issuers. We show that sovereign SLBs could help incentivise climate policies in EU countries, and accelerate emission reductions. They would be an effective tool for signalling commitment. A common EU framework for issuance by EU countries would enhance capital market integration and the transparency of national policies, and would limit climate transition risks in EU capital markets more broadly.
Topic:
Climate Change, European Union, Finance, Carbon Emissions, and Sovereign Bonds
Political Geography:
Europe

7. Central Bank Digital Currency: The Risks and the Myths

Author:
Nicholas Anthony and Norbert Michel
Publication Date:
01-2023
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
Central bank digital currencies (CBDCs) have the potential to radically transform the American financial system—ultimately usurping the private sector and endangering Americans’ core freedoms. Although CBDCs have gained the attention of politicians, central bankers, and the tech industry, this experiment should be left on the drawing board. This paper provides a summary of why Congress should explicitly prohibit the Federal Reserve and the Department of the Treasury from issuing a CBDC.
Topic:
Finance, Economy, Fiscal Policy, Banking, and Digital Currency
Political Geography:
North America and United States of America

8. Proposals for Reducing the Size and Cost of Running Government

Author:
Kojo Asante and David Asante Darko
Publication Date:
01-2023
Content Type:
Policy Brief
Institution:
Ghana Center for Democratic Development
Abstract:
Every other sector of the economy has had to incur substantive inconvenience or financial loss in efforts to return the sovereign debts to sustainable levels. Every other sector of the economy, except government itself. Against this backdrop, this paper reiterates some of the measures that have been proposed to reduce government spending and examines them in more detail. We delve into how the ministerial team might be reduced in size and thereby optimized to cut down government expenditure.
Topic:
Government, Budget, Finance, and Economy
Political Geography:
Africa and Ghana

9. Maximising the impact of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP)

Author:
Vincent Obisie-Orlu
Publication Date:
12-2023
Content Type:
Policy Brief
Institution:
Good Governance Africa (GGA)
Abstract:
This briefing assesses South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). It acknowledges programme achievements while addressing challenges, including delays to the procurement process and financial issues facing REIPPPP projects. It underscores the necessity for electricity industry reform and more cohesive energy policies. It proposes changes to how investment decisions are made, and collaboration occurs alongside the REIPPPP process to promote private sector investment, develop localisation within the REIPPPP and reduce supply chain vulnerabilities. Lastly, it provides a thorough analysis to inform recommendations that will maximise REIPPPP’s role in realising South Africa’s energy objectives.
Topic:
Reform, Finance, Investment, Electricity, Renewable Energy, and Procurement
Political Geography:
Africa and South Africa

10. Financing Women, Peace and Security: A Review of WPS National Action Plans from 2005 to 2022

Author:
Our Secure Future
Publication Date:
05-2023
Content Type:
Policy Brief
Institution:
Our Secure Future
Abstract:
This publication is a policy brief accompanying an upcoming in-depth report on financing Women, Peace and Security (WPS) National Action Plans (NAP). This brief provides an overview of WPS NAPs, as well as the current state of funding for WPS NAP implementation, and a breakdown of this data by region. Stay tuned for the upcoming report to learn more about financing WPS NAPs. Key Findings: • As of early 2023, 31 countries out of 101 have estimated the amount of money required to implement WPS NAP activities. Available information does not illuminate whether these funds are secured. • More than 50 WPS NAPs out of 101 mention that a budget is needed to implement WPS activities, but do not include specification of funding. • The majority of WPS NAPs with budget estimates identify responsible parties for activity implementation, including ministries and/or government institutions, predominantly related to foreign affairs and gender equality.
Topic:
Security, Foreign Policy, Budget, Women, Finance, and Peace
Political Geography:
Global Focus

11. Are Financial Barriers Affecting the Health Care Habits of American Men?

Author:
Munira Z. Gunja, Evan D. Gumas, and Reginald D. Williams II
Publication Date:
07-2022
Content Type:
Policy Brief
Institution:
Commonwealth Fund
Abstract:
Whether it’s stubbornness, an aversion to appearing weak or vulnerable, or other reasons, men go to the doctor far less than women do.1 While behavioral and cultural norms may have a lot to do with the care-seeking habits of American men, the fact remains that the United States is the only high-income country that does not ensure all its residents have access to affordable health care. Roughly 16 million U.S. men are without health insurance, and affordability is the reason that people most often cite for why they do not enroll in a health plan.2 Do income level and financial stress help explain why men do not get needed care and experience worse health outcomes? Using data from the Commonwealth Fund’s 2020 International Health Policy Survey and the Organisation for Economic Co-operation and Development (OECD), we compare health care accessibility, affordability, and health status for adult men in 11 high-income countries. We also examine measures of income and income-related stress, where the data allow, to understand the role income insecurity might play in American men’s relatively low use of health care.
Topic:
Health, Finance, Medicine, and Gender
Political Geography:
North America and United States of America

12. Lending to Defaulters: The IMF Updates Its Lending into Arrears Policy

Author:
Gregory Makoff
Publication Date:
08-2022
Content Type:
Policy Brief
Institution:
Centre for International Governance Innovation
Abstract:
The International Monetary Fund’s (IMF’s) “lending into arrears” policy outlines the criteria used by the IMF in deciding whether to loan to a country in default. This policy brief focuses on one of the conditions a country must meet when seeking debt relief from the IMF: it must engage in good faith negotiations with its creditors (known as the good faith criterion). The country must also implement significant financial reforms and provide assurances that it will be able to meet its financial obligations. This policy brief looks at the history of the lending into arrears policy, the controversy surrounding its use during Argentina’s 2005 debt restructuring and the May 2022 update to the policy.
Topic:
Economics, International Cooperation, Finance, and IMF
Political Geography:
Argentina and South America

13. Central Bank Digital Currencies and the implications for the global financial infrastructure: The transformational potential of Russia’s digital rouble and China’s digital renminbi

Author:
Maria Shagina
Publication Date:
01-2022
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
The launch of Central Bank Digital Currencies (CBDC) not only revolutionizes the international financial system, it also represents an opportunity to minimize the exposure to the US dollar transactions and avoid US oversight. China enjoys a first-mover advantage, as it became the first major economy to launch a CBDC. Following in Beijing’s footsteps, Russia is at the forefront of advancing its digital currency project. As US-sanctioned countries, Russia’s and China’s motivation extends beyond transaction costs reduction and financial inclusion: the governments seek to reduce their dependence on the US dollar and mitigate sanctions risks. In the short term, the US dollar’s international status remains unrivalled. No currency is well-positioned to displace the greenback as a reserve currency. In the long term, CBDCs could eliminate the need for third-party intermediaries and allow cross-border transactions that take place outside of the US-led financial system. This would hamper the US’s ability to use sanctions as a geoeconomic tool and oversee their extraterritorial enforcement.
Topic:
Finance, Digital Economy, Central Bank, and Banking
Political Geography:
China and Asia

14. Reforming the World Bank and MDBs to Meet Shared Global Challenges

Author:
Center for Global Development
Publication Date:
10-2022
Content Type:
Policy Brief
Institution:
Center for Global Development
Abstract:
Last July, the Center for Global Development hosted a meeting with other think tanks to exchange perspectives on the multilateral development bank (MDB) system. We shared a common diagnosis that MDBs must more aggressively address the global challenges that defy national borders and threaten human life as we know it. By virtue of its global reach, financial firepower, and expertise, the World Bank is especially well positioned to be a major driver of progress on climate, pandemic preparedness natural resource conservation, and other global public goods. But it is not meeting its full potential. Participants at our meeting agreed to set out a shared “call to action” where we lay out ideas to evolve the World Bank. The central ideas are to make climate mitigation and adaptation a core component of the World Bank’s mandate; greatly expand its financing capacity; create more incentives for countries to invest in climate and health preparedness; and reform the organizational structure of the institution. Together these could help lay the foundation for a modern World Bank that is meeting the defining challenges of our time head on. Unless otherwise noted, we the undersigned support these ideas in our personal capacity. More information on related work underway in our organizations can be found at our respective websites.
Topic:
Sovereignty, Reform, Finance, and Banking
Political Geography:
Global Focus

15. Leveraging Knowledge Generation for Policy Impact: Recommendations for the World Bank

Author:
Amanda Glassman, Julia Kaufman, Ruth Levine, and Janeen Madan Keller
Publication Date:
07-2022
Content Type:
Policy Brief
Institution:
Center for Global Development
Abstract:
Since the 2006 release of the CGD report When Will We Ever Learn? Improving Lives Through Impact Evaluation, there have been nearly two decades of progress in generating and using evidence for public policy decisions and development programs. There has been a steady increase in the number of impact evaluations—a rigorous approach that establishes the attributable net impact of a project or program. Their ability to assess attribution makes impact evaluations uniquely well suited for decision making. Nevertheless, the COVID-19 pandemic put a spotlight on an unfinished agenda and underscored the need for high-quality, timely, and context-specific evidence. Across sectors, decision makers in governments, aid agencies, multilateral organizations, and NGOs have not yet fully harnessed the value of evidence for better public policies. Numerous challenges limit evidence use. On the demand side, impact evaluations may lack relevance to policy decisions and fail to respond to decision makers’ priorities, timelines, and questions. On the supply side, decision makers often lack institutional incentives and funding to generate and act on relevant evidence. Current funding models compound these challenges by contributing to misaligned incentives between policymaker needs and academic researchers. In response to these challenges, CGD launched the Working Group on New Evidence Tools for Policy Impact to develop a renewed agenda for the next generation of investments in impact evaluation and related evidence systems to enhance their value for real-world decision making. The group brought together policymakers and experts to review the progress and obstacles to the use and utility of evidence for global development. Its final report highlights how far the field has come in addressing critiques about the scale, generalizability, and policy utility of impact evaluation, and offers recommendations to the development community on “what and how to fund to deliver on the promise of impact evaluation and bolster the broader evidence ecosystem.” The working group proposes five ways to improve impact evaluation funding and practice: (1) design evaluations that start from the policy question and decision space; (2) harness technology for timely, lower-cost evidence; (3) advance locally grounded evidence-to-policy partnerships; (4) enact new incentives and structures to strengthen evidence use; and (5) invest in evidence leaders and communities.
Topic:
International Cooperation, World Bank, Finance, and Banking
Political Geography:
Global Focus

16. The Development Response to Kleptocracy and Strategic Corruption

Author:
Josh Rudolph
Publication Date:
01-2022
Content Type:
Policy Brief
Institution:
German Marshall Fund of the United States (GMFUS)
Abstract:
Kleptocracies do not stop at their own borders. The same actors, networks, tactics, and resources that they wield to prevent democracy and rule of law from sprouting at home are also repurposed for foreign aggression. While cronies, oligarchs, and lesser operatives do get rich in the process, “strategic corruption” is chiefly a geopolitical weapon directed by autocratic regimes to secretly undermine the sovereignty of other countries. The three most common manifestations of strategic corruption vary on a spectrum of how directly and boldly they violate sovereignty and subvert democratic processes. Starting with the most indirect and chronic form of strategic corruption, Russia and China invest “corrosive capital” throughout Eastern Europe and the Belt and Road Initiative, respectively. They use corrupt patronage networks and opaque business dealings to spread their kleptocratic model of authoritarian governance. Those corrupt investments are usually also supported by tactics of “malign influence,” like when a minister or politician receives bribes or economic threats until they censor their political speech, advance a foreign policy initiative, or otherwise subordinate the legitimate sovereign interests entrusted to them by their own people in favor of the interests of a foreign power. Finally, the most direct and acute form of strategic corruption involves financial methods of election interference and other tactics of corrupting democratic processes. Often funded with the proceeds of kleptocracy, election interference through covert political financing has become the bailiwick of Kremlin-directed oligarchs. Separate from those three manifestations of strategic corruption—corrosive capital, malign influence, and election interference—China and Russia try to hide their dirty money and malign activities by pressuring foreign journalists into silence through surveillance, thuggery, and lawsuits. Western foreign assistance has not yet offered a coherent response to kleptocracy and strategic corruption, but that is starting to change under the Biden administration. Building resilience to this transnational threat through foreign aid will require four new approaches that are more political and coordinated than traditional development assistance. First, aid should be informed by local political analysis. More important and less used than technical reviews of laws and institutions, political analysis should center anti-corruption efforts around known corrupt activity. That starts by asking sensitive questions about which individuals, institutions, and sectors are the most corrupt, how extensively their networks of wealth and power span, and which corrupt figures must be held accountable to thoroughly purge grand corruption. Second, aid should be responsive to political shifts, scaling up and down, respectively, in response to windows of opportunity for anti-corruption reform and times of backsliding toward kleptocracy. Third, aid responses to kleptocracy should be coordinated at the regional and global levels, similarly to how grand corruption operates across borders through transnational networks of actors and tools. Fourth, anti-corruption programming should be deeply integrated across the traditional sectors of assistance, particularly health, infrastructure, energy, climate, and security. Some of these new approaches are already being prioritized under the Biden administration’s new strategy to combat corruption, particularly coordinating across tools and sectors to fight transnational corruption. But operationalizing this mission will be no small endeavor, given that anti-corruption assistance is delivered through a notoriously technocratic and apolitical bureaucracy built during the Cold War to aid socioeconomic development in individual countries steadily over decades. But getting this right offers the key to defending democracies from autocratic aggression, showing how democracy can deliver, and even helping bring foreign policy and domestic politics into alignment for the first time in a generation.
Topic:
Corruption, Development, Finance, and Kleptocracy
Political Geography:
Russia, China, Eastern Europe, and Global Focus

17. An analysis of central bank decision-making

Author:
Maria Demertzis, Catarina Martina, and Nicola Viegi
Publication Date:
07-2022
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
The process by which central banks take decisions has evolved over the years, with a tendency towards independence and decisions taken by committees rather than individuals. Monetary policy committees can be set up formally in different ways, traditionally falling into one of two categories: individualistic or collegial. Individualistic committees reach decisions by voting and publish the votes of each of their members, while in collegial committees, decisions are typically reached collectively. The European Central Bank is an example of the latter, while the Bank of England follows an individualistic approach. Focusing on decision-making, a relevant question is whether the formal set-up in practice leads to different ways of deliberating and reaching monetary policy decisions. We look at decisions taken by the Bank of England, the Federal Reserve and the European Central Bank over more than 20 years to evaluate how different the decision-making process is in these three central banks. The results indicate that, irrespective of the committee type, their approach to consensus building when they take decisions is similar. The three central banks seem to value reaching decisions by unanimity, both on interest rates – the prime monetary policy instrument by definition – and on asset purchases. Decisions to tighten monetary policy are more often taken unanimously than decisions to ease monetary policy. When maintaining policy unchanged, decisions are usually backed by most committee members.
Topic:
Federal Reserve, Finance, Central Bank, European Central Bank, Decision-Making, and Bank of England
Political Geography:
United Kingdom, Europe, Global Focus, and United States of America

18. North Korean Cryptocurrency Operations: An Alternative Revenue Stream

Author:
Heeu Millie Kim, June Lee, and Rachel Paik
Publication Date:
05-2022
Content Type:
Policy Brief
Institution:
Belfer Center for Science and International Affairs, Harvard University
Abstract:
As cryptocurrency has risen to prominence within the past decade, its widespread use has like- wise created great potential for exploitation by malicious actors. With a cyber arsenal capable of reaching cryptocurrency platforms and users, North Korea has increasingly targeted virtual assets as a source of revenue for its regime. In its 2021 final report, the United Nations Panel of Experts estimated that North Korea stole approximately $316.4 million in virtual assets between January 2019 and November 2020. The decentralized nature of the cryptocurrency market is well-suited for a heavily-sanctioned and financially-isolated state like North Korea, especially given tighter trade restrictions and border closures during the COVID-19 pandemic. The ease of obscuring ownership of virtual assets and the lack of regulatory oversight make cryptocurrency all the more attractive for North Korea. Although North Korean cyber operations have been widely publicized, the purpose of this report is to focus on three ways North Korea obtains cryptocurrencies, specifically cryptomining, cryptojacking, and fraudulent initial coin offerings (ICOs). Given observed trends and changes in the cryptocurrency environment—namely, the rise of decentralized finance (DeFi) and over-the-counter brokers—this paper finds that North Korea’s crypto operations are consistent with its national objectives and likely to continue. Second, North Korea’s cryptocurrency operations offer an attractive and transferable model for other financially-isolated states and non-state actors. Finally, governments should work with law enforcement agencies, multilateral institutions, and non-traditional actors to mitigate the national security threat from North Korea’s cryptocurrency activities.
Topic:
Science and Technology, Finance, Cryptocurrencies, and Virtual Assets
Political Geography:
Asia and North Korea

19. Innovations in Donor Bureaucracies and the Implications for Peacebuilding Financing

Author:
Ed Laws
Publication Date:
04-2022
Content Type:
Policy Brief
Institution:
Center on International Cooperation
Abstract:
Donors face increasing pressure to do more with less, even in the most fragile contexts. This policy brief analyzes how organizational factors within governments create obstacles for good peacebuilding financing—and proposes options for overcoming them.
Topic:
Reform, Finance, Bureaucracy, Donors, and Peacebuilding
Political Geography:
United Kingdom, Europe, and Global Focus

20. Emerging Powers and Peacebuilding Financing: Recommendations for Finding Common Ground

Author:
Priyal Singh and Gustavo De Carvalho
Publication Date:
04-2022
Content Type:
Policy Brief
Institution:
Center on International Cooperation
Abstract:
There is currently a North-South gap in discussions on peacebuilding financing, despite the fact that emerging powers are playing an increasingly important role in fragile and conflict-affected countries. Now is the moment to create opportunities for mutual engagement, coordination, and learning.
Topic:
Finance, Conflict, Emerging Powers, and Peacebuilding
Political Geography:
South Asia, Middle East, India, East Asia, South Africa, and Latin America

21. Sanctions, SWIFT, and China’s Cross-Border Interbank Payments System

Author:
Barry Eichengreen
Publication Date:
05-2022
Content Type:
Policy Brief
Institution:
Center for Strategic and International Studies
Abstract:
In response to Russia’s attack on Ukraine, the United States and a coalition of cooperating countries imposed harsh financial sanctions on the Russian government, corporations, and individuals.1 These sanctions bar Russian banks from using SWIFT (the Society for Worldwide Interbank Financial Telecommunications) to facilitate cross-border payments, prohibit banks from doing most forms of business with Russian entities, and freeze assets held abroad by the Central Bank of Russia in the form of treasury securities and bank deposits. These developments have led Russia, as well as other countries contemplating whether they might find themselves in the same position, to explore alternatives. Such options could include building a substitute for SWIFT to send instructions regarding cross-border interbank transactions; identifying financial counterparties other than Western banks with which to do international business and platforms other than Western clearinghouses through which to make payment; and finding a vehicle other than the dollar for denominating and executing transactions. Specifically, countries are looking to China, which has large internationally active banks, has created its own clearinghouse for cross-border transactions and is embarked on a campaign to encourage broader international use of its currency, the renminbi.2 This note investigates how far China has gone in creating alternatives to SWIFT, Western banks, and the dollar. It explores whether Russia and other countries might be drawn toward this parallel international financial universe and what economic and political implications this has—for the United States, for its geopolitical rivals, and for global economics and politics. China is making strides in fostering cross-border use of the renminbi and building a renminbi-based interbank payments system that can serve as an alternative to SWIFT and Western clearinghouses. However, these remain somewhat limited alternatives—for the moment. The situation could change faster if lent additional impetus by Western sanctions. Thus, countries such as the United States that employ financial sanctions should prepare for the development of alternative financial arrangements in China and possibly elsewhere. This may mean relying more heavily on nonfinancial measures insofar as financial sanctions eventually become less effective.
Topic:
Economics, Sanctions, Finance, Borders, and Banks
Political Geography:
China and Asia

22. Options for a Loss and Damage Financial Mechanism

Author:
Michael Franczak
Publication Date:
10-2022
Content Type:
Policy Brief
Institution:
International Peace Institute
Abstract:
As efforts to mitigate and adapt to the impacts of climate change fall short, discussions around loss and damage (L&D) resulting from climate change have gained urgency. These discussions pivot on questions around financing, which remains very limited. Going into the twenty-seventh UN Climate Change Conference (COP27), the call for a new L&D financial mechanism has been raised by developing countries. This paper provides a brief overview of the state of play of global negotiations on L&D and explores options for funding arrangements for addressing L&D in the context of the positions of the G77 and Alliance of Small Island States (AOSIS). The paper considers options related to four key questions concerning a new mechanism for financing L&D: Where will it be located? A new L&D financial mechanism could be located within the climate regime. However, there could also be complementary mechanisms outside the climate regime. Who will pay for it? There are two broad options for funding: ask for public contributions from donors or impose new taxes. An L&D financial mechanism could adopt both approaches, though some taxes could negatively impact some of the very countries advocating for L&D. Who will control it? Any mechanism should be guided by the principle of Common But Differentiated Responsibility and should be new and additional; needs-based, adequate, and predictable; public and grant-based; guided by vulnerability criteria; and locally driven. What will it do? The fund should make clear how L&D is both distinct from and linked to mitigation and adaptation and should take special care to address critical gaps in financing for slow-onset and noneconomic losses.
Topic:
Climate Change, Development, and Finance
Political Geography:
Global Focus

23. Footing the Bill: Fair finance for loss and damage in an era of escalating climate impacts

Author:
Tracy Carty and Lyndsay Walsh
Publication Date:
06-2022
Content Type:
Policy Brief
Institution:
Oxfam Publishing
Abstract:
The world has entered a new and dangerous era of climate change impacts, causing huge loss and damage and driving up inequality in the world’s poorest countries and communities that have contributed least to the climate crisis. New research by Oxfam estimates that funding requirements for UN humanitarian appeals linked to extreme weather are eight times higher than they were 20 years ago, and over the past five years nearly half of appeal requirements have gone unmet. Funding for emergency humanitarian response is piecemeal and painfully inadequate, as is broader support to address loss and damage such as rebuilding homes and vital infrastructure. Scaled-up financial support from governments, corporations and individuals most responsible for causing the climate crisis, and most able to pay, is an immediate necessity. A new finance facility must be created to help ensure that finance to address loss and damage is accessible and sustained, is additional to adaptation, mitigation and ODA commitments, and is delivered in accordance with the principles of climate justice.
Topic:
Climate Change, Environment, Infrastructure, and Finance
Political Geography:
Global Focus

24. Climate Finance in West Africa: Assessing the state of climate finance in one of the world’s regions worst hit by the climate crisis

Author:
Norman Martin Casas and Azara Remalia Sanogo
Publication Date:
09-2022
Content Type:
Policy Brief
Institution:
Oxfam Publishing
Abstract:
In West Africa/Sahel, countries and their communities are experiencing the worst impacts of the climate crisis. Elsewhere, Paris Agreement climate finance commitments are set to prioritise the countries that are most impacted by climate change. However, new research by Oxfam shows that, despite West Africa/Sahel being one of the world’s most climate-vulnerable regions, the international climate finance received falls far short of meeting national climate finance needs and is being significantly over-reported in favour of debt instruments. Adaptation finance is also insufficient. Reported climate finance does not place gender equality at the centre, and only a small part directly reaches local actors. In light of this, developed countries and other donors should scale up grant-based adaptation finance that reaches the local level and responds to the real needs of particularly hard-hit regions such as West Africa/Sahel.
Topic:
Climate Change, Development, Environment, and Finance
Political Geography:
Africa, West Africa, and Sahel

25. Climate finance in Asia: Assessing the state of climate finance in one of the world’s most climate vulnerable regions

Author:
Christopher Roy
Publication Date:
11-2022
Content Type:
Policy Brief
Institution:
Oxfam Publishing
Abstract:
Asia is particularly vulnerable to climate hazards including extreme temperatures, flooding, droughts, cyclones, and sea level rise. The most vulnerable communities need financial support to help adapt to the climate crisis – they cannot do so alone. Developed countries have promised $100 bn in climate finance to developing countries every year until 2025. This promise has not been met. Asian countries have outlined the support they require and delivering on these needs is integral to bringing climate justice to those most vulnerable to – yet least responsible for – the climate crisis. We find that the climate finance provided to Asia is woefully inadequate to support the necessary adaptation actions and vulnerable communities are suffering as a result.
Topic:
Climate Change, Environment, Finance, and Climate Finance
Political Geography:
Asia

26. An Examination of Ghana’s Health Financing Challenges and Prospect for Reform

Author:
Gordon Abekah-Nkrumah
Publication Date:
03-2021
Content Type:
Policy Brief
Institution:
Ghana Center for Democratic Development
Abstract:
The goal of health financing is main to promote financial access to preventive and curative care by making funds available and setting the right financial incentive to healthcare providers.
Topic:
Development, Health, Health Care Policy, and Finance
Political Geography:
Ghana

27. Raising a caution flag on US financial sanctions against China

Author:
Jeffrey J. Schott
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
China’s policies in Xinjiang, Hong Kong, and the South China Sea and its ongoing support for Iran, North Korea, and Venezuela pose major challenges for the United States, where bipartisan pressure is growing to ramp up punitive sanctions against leading Chinese firms and financial institutions. Financial sanctions freeze the US assets or bar US entry of the targeted individuals and firms and prohibit US financial firms from doing business with them. Schott explains why US officials should carefully weigh the risks to international financial markets and US economic interests before imposing punitive sanctions on major financial institutions engaged with China. The collateral costs of such sanctions would be sizable, damaging US producers, financial institutions, and US alliances. By restricting access of major banks to international payments in US dollars and barring use of messaging systems like SWIFT, tougher US financial sanctions would effectively “weaponize” the dollar; friends and foes alike would be pushed to seek alternatives to dollar transactions that, over time, would weaken the international role of the dollar. Instead of doubling down on current unilateral financial sanctions, US policy should deploy sanctions in collaboration with allies and calibrate trade and financial controls to match the expected policy achievements.
Topic:
Human Rights, Sanctions, Finance, and Economy
Political Geography:
China, Asia, North America, and United States of America

28. Accounting for climate policies in Europe’s sovereign debt market

Author:
Marta Dominguez-Jimenez and Alexander Lehmann
Publication Date:
05-2021
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
International debt investors increasingly demand assets that are aligned with environmental, social and governance objectives. Sovereign debt is being belatedly swept up in this change. This huge asset class represents a uniquely long-term claim and funds a wide range of public expenditure, both brown and green. Public capital expenditures will be a central part of the roughly €3 trillion investment budget needed to pay for the European Green Deal. European Union countries have so far met investor appetite for climate-aligned assets through sovereign green bonds, the issuance of which has rapidly grown since 2017. The EU itself will also issue green bonds in large volumes. However, because of some inherent flaws in such instruments and as their still-weak frameworks, these bonds are unlikely to meet the environmental criteria demanded by investors, and will complicate established principles in sovereign debt management. Much more comprehensive information is needed on the climate related aspects of the public budgets of EU countries. Greater transparency in this respect would support stability and improve the functioning of capital markets, given that sovereign debt plays a pivotal role in all investor portfolios and also in regulatory and monetary policy. Adoption by sovereign issuers of green budgeting principles, based on a common taxonomy of sustainable activities, would enhance transparency. It could also be driven by investors who, under new EU rules, must disclose the climate-related aspects of all financial instruments offered in the capital market.
Topic:
Climate Change, Debt, Markets, Sovereignty, European Union, Finance, and Sustainability
Political Geography:
Europe

29. Low interest rates in Europe and the US: one trend, two stories

Author:
Maria Demertzis and Nicola Viegi
Publication Date:
03-2021
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
In both Europe and the United States, interest rates have been declining for more than fifteen years. For much of this period, real interest rates have been negative and they are expected to remain negative for at least another decade. The literature associates this decline in interest rates with a similarly protracted decline in productivity. But the decline in productivity appears paradoxical given major technological advances. The decline in the price of capital is underpinned by the factors that have caused a decline in demand for capital, as well as a relative increase in its supply. On the supply side, aging and an increase in overall macroeconomic risk since the financial crisis have both led to increased savings. On the demand side, the increase in the importance of intangible capital in production has reduced the demand for physical capital. Nevertheless, for the US, the literature has identified the increase in market concentration as the biggest factor responsible for the reduction in the overall demand for capital. Digital innovation has led to the creation of champion firms that have captured big market shares and have been able to prevent others from entering not only the US market, but markets globally. This has dampened investment. Europe is affected by US digital dominance, but other factors, including aging and increased risk, are more prominent in sustaining the downward pressure on interest rates. In particular, the lack of risk capital, in the context of capital markets, contributes to this downward pressure in the EU. As the knowledge economy relies increasingly on intangible capital, a bank-based system that requires collateral is not well suited to finance investments. A lack of suitable finance will remain an important factor in the downward pressure on interest rates. The structural factors behind the downward pressure on interest rates imply that macroeconomic policy will have a reduced role in managing aggregate demand. Monetary policy in the euro area will be more about preventing financial fragmentation and less about stimulating demand. Equally, fiscal policy will have more of a supporting rather than stimulating role. Tackling the structural decline in market dynamism and therefore in real rates will require structural policies to reduce market power globally and ensure the creation of capital markets in the EU.
Topic:
Monetary Policy, Governance, European Union, Finance, and Macroeconomics
Political Geography:
Europe, North America, and United States of America

30. Economy First: Assigning Ayman Ben Abdel Rahman to form the new Algerian government

Author:
FARAS
Publication Date:
07-2021
Content Type:
Policy Brief
Institution:
Future for Advanced Research and Studies (FARAS)
Abstract:
Finance Minister Ayman Ben Abdel Rahman (60 years old) has been assigned to form the new Algerian government, as he is a technocrat who is not affiliated with any political or ideological currents. This is in addition to his economic and financial expertise, which will be critical in handling the internal challenges, particularly with respect to dealing with the Hirak movement, tackling economic crisis and facing security threats. On June 30, 2021, Algerian President Abdelmadjid Tebboune issued a decree appointing Ayman Ben Abdel Rahman as Prime Minister to succeed Djerad, who submitted his resignation on June 24, following the announcement of the final results of the latest parliamentary elections. Abdel Rahman was assigned to consult with the winning political parties to form a new government as soon as possible. Abdel Rahman was assigned as the country's Prime Minister, in accordance with the provisions of the 5th and 7th paragraphs of Article "91" of the Algerian constitution, which grants the Algerian president the authority to assign a person to form a national government to manage the country's affairs.
Topic:
Government, Finance, Economy, Ideology, and Hirak Movement
Political Geography:
Algeria and North Africa

31. Germany’s Debt Brake and Europe’s Fiscal Stance after COVID-19

Author:
Shahin Vallée, Jérémie Cohen-Setton, and Dominik Buhl
Publication Date:
05-2021
Content Type:
Policy Brief
Institution:
German Council on Foreign Relations (DGAP)
Abstract:
Germany’s plan to return to its debt brake creates a serious risk of premature fiscal tightening. Given that the fiscal divide between Europe and the US will widen sharply in 2021, a hasty return to European and German fiscal rules would stifle recovery and undermine efforts to rebuild transatlantic ties in trade and macroeconomic cooperation. This paper proposes several practical options to attenuate the fiscal drag associated with a return to the debt brake and calls for a broad debate on its reform.
Topic:
Debt, European Union, Finance, Transatlantic Relations, and COVID-19
Political Geography:
Europe, Germany, and United States of America

32. New York City: Rebuilding a Future-Focused Economy

Author:
Committee for Economic Development of the Conference Board
Publication Date:
08-2021
Content Type:
Policy Brief
Institution:
The Conference Board
Abstract:
Major shifts are expected in how New Yorkers work in the postpandemic economy—remotely or in the office. But the COVID-19 pandemic has also dramatically accelerated a shift in the sectoral landscape of New York City and the industries in which New Yorkers will work. Restoring the city’s economic dynamism and creating a postpandemic, locally prosperous, and globally competitive economy will hinge on leveraging the city’s growth sectors and ensuring that New Yorkers have the skills they need to rebuild a thriving, future-focused NYC economy. The city lost almost 900,000 jobs during the initial months of the pandemic and had recovered just over half of those jobs by June 2021. Many of these job losses are in sectors that had seen relative weakness prior to the pandemic, including the city’s historically important finance & insurance and real estate sectors. The recovery in NYC has so far been an unbalanced one, lagging behind other major US city centers. Much of NYC’s ongoing economic recovery has been concentrated in health care, life sciences, and the growing tech industry, sectors that were strengthening prior to the pandemic. Indeed, tech jobs were already driving much of the employment growth in NYC before the pandemic. And while office and residential buildings emptied out during the crisis, Big Tech companies—including Amazon, Apple, Facebook, and Google—have increasingly moved in, expanding their office and warehouse spaces and accelerating hiring.
Topic:
International Trade and Finance, Finance, Economy, and COVID-19
Political Geography:
New York, North America, and United States of America

33. Changing Environment for Opening of Chinese Financial Sector and Implications

Author:
Sangbaek Hyun, Suyeob Na, Young Sun Kim, Koun Cho, and Bongkyo Seo
Publication Date:
04-2021
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
The opening of China's financial sector has progressed at a very slow pace, unlike the manufacturing and trade sectors that have pushed for an active opening to the outside world. The Chinese economy has been growing rapidly while serving as a global production base, but since 2012, it has become necessary to modify its approaches to achieve growth as it enters an era of medium-speed growth. Recently, new reform and opening measures have been taken in various fields to improve the quality of the Chinese economy, and the need for reform and opening in the financial sector has also increased. Internally, the financial system centered on China's state-owned commercial banks has focused on indirect financing, which has served as a major obstacle to upgrading China's economy and industry to the next level, further increasing the need for reform and opening of the financial sector. Moreover, externally, the U.S.-China conflict which began in earnest in 2018, is applying strong pressure toward reform and opening in China’s financial sector. The Chinese government began to show a proactive attitude toward financial opening amid such internal needs and external pressure, and an important development was seen in China’s financial opening when President Xi Jinping declared further opening measures at the Boao Forum in April 2018. The Chinese financial authorities have prepared follow-up measures related to financial opening, and the Chinese government’s efforts toward financial opening in the three years from 2018 to 2020 yielded more results than the ten-year opening period since its accession to the WTO. Against this backdrop, this study examines the main contents of China’s financial opening process, which has been accelerating recently, and derives evaluation and implications.
Topic:
Finance, Economy, Economic Growth, and Banks
Political Geography:
China, Asia, and Korea

34. The Commitment to Development Index 2021

Author:
Ian Mitchell, Lee Robinson, Beata Cichocka, and Euan Ritchie
Publication Date:
09-2021
Content Type:
Policy Brief
Institution:
Center for Global Development
Abstract:
The Commitment to Development Index (CDI) ranks 40 of the world’s most powerful countries on policies that affect more than five billion people living in poorer nations. Because development is about more than foreign aid, the CDI covers eight distinct policy areas: Development Finance Investment Migration Trade Health Environment Security Technology
Topic:
Security, Development, Environment, Health, Migration, Science and Technology, Finance, Investment, and Trade
Political Geography:
Global Focus

35. How the rest of the world responds to the US-China split

Author:
Hung Tran
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
The election of Joe Biden as the forty-sixth US president is not expected to change the list of substantive issues dividing the United States and China, such as trade, investment, technology, geopolitical competition, national security, and human rights—except that the priority among them may change, with human rights concerns moving more to the forefront. However, the tone and modality of the unfolding of the US-China competition will change from Donald Trump’s unilateralism to Biden’s efforts to build alliances with “likeminded” countries in Europe, Asia, and elsewhere to deal with the challenges China has posed. In a way, Biden’s alliance-building approach may intensify pressure on the rest of the world to take sides. How countries respond to this challenge, unwelcome by most, depends on whether they see themselves as competitors to China, or as “price takers” in the international economic system.
Topic:
Global Markets, Regulation, Finance, Economy, Trade, and Digital Policy
Political Geography:
China, Europe, Asia, North America, United States of America, and Indo-Pacific

36. Adversarial Avenues: Ten Bipartisan Ways to Make a Bill Like S. 1 Close Loopholes Autocrats Exploit to Meddle in U.S. Politics

Author:
Josh Rudolph
Publication Date:
04-2021
Content Type:
Policy Brief
Institution:
German Marshall Fund of the United States (GMFUS)
Abstract:
In his push for bipartisan efforts on voting rights legislation, Senator Joe Manchin (D-WV) warned that “the lack of transparency in many campaign finance rules provides multiple avenues for foreign and national adversaries to meddle in the American political system.” These loopholes might be called the “adversarial avenues” of malign finance. Manchin went on to explain that this is why he supports two campaign finance provisions included within the For the People Act (S. 1): The DISCLOSE Act and the Honest Ads Act. Manchin is absolutely right. The most comprehensive research on covert foreign money classified by legal avenue more than 100 cases—adding up to more than $300 million over the past decade—of authoritarian regimes such as Russia and China funneling money into democratic processes as a geopolitical weapon. Strikingly, 83 percent of this activity was enabled by seven legal loopholes that were identified in this research and are now being actively tackled by the European Parliament. Two of those seven vulnerabilities would be addressed by DISCLOSE and Honest Ads, which would impose financial transparency on “dark money” non-profits and online political ads, respectively. But foreign powers do not stop there. As President George Washington warned in his farewell address, they bring “insidious wiles” to their tradecraft of foreign influence. Autocrats invent and exploit cunning ways to secure political power, devising creative tricks to interfere in elections at home and abroad, often through some degree of legal participation by people within the target country. Indeed, a recent U.S. intelligence assessment found that in the 2020 election the Kremlin’s main innovation since 2016 was more collaboration with U.S.-based conduits. That is why, in addition to Thomas Morley’s and my year-long research project on malign finance, Jessica Brandt and I worked with a bipartisan team of legal experts to develop legislative proposals that would outlaw U.S. participation in foreign interference. Drawing from this extensive body of research developed over the past two years, 10 policy proposals would further address the “multiple avenues for foreign and national adversaries to meddle in the American political system.” The first five proposals offer ways to more thoroughly approach interference issues already under consideration in S. 1, while the second five proposals introduce new resilience measures for consideration.
Topic:
Politics, Finance, Legislation, and Foreign Interference
Political Geography:
North America and United States of America

37. Coordinating the War on Corruption

Author:
Josh Rudolph
Publication Date:
05-2021
Content Type:
Policy Brief
Institution:
German Marshall Fund of the United States (GMFUS)
Abstract:
The Biden administration has a historic opportunity to unify U.S. domestic and foreign policy through an aggressive mission to combat corruption and kleptocracy. Middle-class Americans are frustrated by perceptions of corruption at home, while authoritarian regimes are organized as oligarchies weaponizing corruption around the world. While these trends have fueled passionate discourse in recent years, the Biden administration should seek a legacy of achieving actual results by institutionalizing anti-corruption reforms throughout U.S. and international financial, diplomatic, and legal systems, including a formidable raft of new policies and commitments to be showcased at the Summit for Democracy, which Biden has pledged to host in his first year in office. The administration should start with powerful regulatory action to root dirty money out of the U.S. financial system. Within the first 100 days of this anti-corruption reform initiative, Treasury should take ten initial steps, the two strongest being finalizing a 2015 proposal to make private equity and hedge funds identify their customers and publishing the first-ever National Corruption Risk Assessment. After the first 100 days but within the first year of this effort, Treasury should take another seven steps, such as regulating more enablers and writing strong rules for the new beneficial ownership registry. The White House should also work together with Congress to eliminate dark money from politics and work with the Justice Department (DOJ) to deliver and communicate tangible policy and enforcement outcomes that most Americans would see as truly “draining the swamp.” The White House, in consultation with Treasury and partners at the Organization for Economic Cooperation and Development (OECD) and the Financial Action Task Force (FATF), should push for a landmark international agreement to end offshore financial secrecy, including commitments around public beneficial ownership registries, automatic exchange of tax information, a cross-border payments database, and steps toward a global asset registry, as well as sanctions to motivate cooperation with all the above. The United States Agency for International Development (USAID) should scale up support for anti-corruption activists. The Department of State should integrate an anti-corruption action fund into pre-existing efforts, recommit to international anti-corruption initiatives that languished under Trump, and strengthen internal coordination and capacity-building efforts. Law enforcement should pressure kleptocrats by publicizing confiscated assets and banned individuals while reforming global mechanisms suffering from abuse (e.g., EB-5 golden visas, mutual legal assistance treaties, Interpol, etc.). The ambitious 100-point anti-corruption agenda described in this report is achievable, but only if the White House supports it as a top policy priority, including the commitment of resources needed to dedicate a small team to coordinate the work, which could take the form of either a standalone directorate at the National Security Council (NSC) or a task force of staffers drawn from several White House components. To energize Treasury, State, USAID, DOJ, and other departments and agencies at a high level, this team should be run by a White House senior director dedicated exclusively to anti-corruption and a designated senior leader such as the Vice President, coordinating efforts across the areas of democracy and human rights (DHR), international economics (Intecon), the Domestic Policy Council (DPC), and other White House offices. This White House anti-corruption team should be staffed with at least three directors, each dedicated to one priority area: building a global coalition, rooting out dirty money, and showing compelling results to the American people.
Topic:
Corruption, Politics, and Finance
Political Geography:
United States of America

38. Regulating The Enablers: How the U.S. Treasury Should Prioritize Imposing Rules on Professionals Who Endanger National Security by Handling Dirty Money

Author:
Josh Rudolph
Publication Date:
09-2021
Content Type:
Policy Brief
Institution:
German Marshall Fund of the United States (GMFUS)
Abstract:
When kleptocrats, foreign intelligence services, homegrown autocrats, and other malign actors weaponize corruption to undermine U.S. democracy, their financial secrecy relies upon the services of ten sectors of U.S. professionals, including lawyers, real estate agents, hedge fund managers, and others. The U.S. government should promulgate new financial regulations—similar to existing rules for banks—that would require non-bank enablers to watch out for dirty money. Regulators should prioritize six or seven sectors of professionals known to gravely endanger U.S. national security by facilitating corruption. Unfortunately, the United States is among the less than 10 percent of countries that do not require non-bank enablers to establish anti-money laundering (AML) programs, which are mandatory for banks. That is, unlike enablers based in more than 90 percent of the world, U.S. non-bank enablers do not need to have compliance officers, trainings, audits, and controls reasonably designed to spot potential money laundering by identifying customers, scrutinizing transactions, keeping records, and reporting suspicious activity to the government. Fortunately, that may change soon, as the regulation of enablers has become a top priority among U.S. lawmakers, law enforcement, civil society, and other stakeholders. President Joe Biden’s memorandum prioritizing the fight against corruption as a core national security interest—and ordering U.S. departments and agencies to develop a presidential anti-corruption strategy within 200 days—included a prominent warning about the threat of U.S.-based professional enablers who move and launder dirty money.
Topic:
National Security, Finance, Financial Crimes, and Money Laundering
Political Geography:
North America and United States of America

39. Leveraging Extractive Industries to Address Ghana’s Fiscal Challenges: Lessons From the Pandemic

Author:
Andrew Bauer and Denis Gyeyir
Publication Date:
02-2021
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
Ghana’s economy and public finances have been hard hit by the dual shocks of the coronavirus pandemic and the oil price crash. Despite the downturn, the government has managed the pandemic better than most countries. Ghana's early response to the pandemic means the country is expected to be one of the world’s few economies that may continue to grow this year in nominal terms. Importantly for public finances, the Ghanaian government is becoming more dependent on extractive production. Just four years ago, in 2016, extractive revenues represented just 5 percent of fiscal revenues. In 2018, mineral revenues represented more than 3 percent of non-aid fiscal revenues. In 2019, oil revenues represented nearly 10 percent of non-aid fiscal revenues. The government expects oil, gas and mineral receipts to double between now and 2022, which would constitute a five-fold increase in resource dependence in six years unless other sources of revenue can be mobilized. Revenue mobilization is essential since Ghana remains a country at high risk of debt distress. Any further economic or financial shock could draw the government into a debt spiral and default. The Ghanaian government has responded in three ways: committing to macroeconomic stability and fiscal discipline, debt monetization and working to mobilize revenues. In this briefing, the authors discuss each of these strategies and offer recommendations for the government's current debt management policy.
Topic:
Oil, Finance, Economy, and COVID-19
Political Geography:
Africa and Ghana

40. Regional Financial Cooperation in East Asia from a New Perspective

Author:
Sungbae An and Subin Kim
Publication Date:
12-2021
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Following the Asian financial crisis of 1998, there was a need to improve regional financial cooperation, including liquidity support. The Chiang Mai Initiative Multilateralization (hereinafter, CMIM) and the Asian Bond Market Initiative (hereafter, ABMI) are two of the outcomes, but it is difficult to find countries that are actively using these mechanisms. Against this backdrop, we will first examine the limitations of existing systems and propose ways to overcome those limitations, as well as new ways to strengthen East Asian financial cooperation. We suggest three ways to strengthen financial coopera-tion in East Asia from a new perspective: 1) monetary cooperation through Central Bank Digital Currency (CBDC) 2) establishment of development financial institution in Northeast Asia 3) financial cooperation with Central Asia and Mongolia. Of course, more precise planning is required to implement these alternatives, and it is also recognized that the topics covered in this study represent only a subset of regional financial and monetary cooperation. However, by overcoming the limitations thus far, it is hoped that it can be a contribution that provides at least a glimmer of thought, which can hopefully become more concrete in future studies.
Topic:
Development, Regional Cooperation, Monetary Policy, Financial Crisis, and Finance
Political Geography:
Central Asia and East Asia

41. Addressing the Challenges of Digital Lending for Credit Markets and Financial Systems in Low- and Middle-Income Countries

Author:
Christoph Sommer
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
The demand for digital financial services has risen significantly over recent years. The COVID-19 pandemic has accelerated this trend and since the focus has shifted towards economic recovery, digital lending has become central. Digital credit products exploit traditional and alternative financial and non-financial data to provide access to finance for households and micro, small and medium enterprises (MSMEs). While it makes lending more inclusive for underserved or unserved households and firms, its increasing influence also brings forth challenges that need to be addressed by policy-makers and regulators in order to guarantee well-functioning credit markets and broader financial systems that foster sustainable economic development. A central concern is the adverse effect of digital lending on the stability and integrity of credit markets (and potentially the wider financial systems). The rise in non-performing loans, even before the COVID-19 crisis, has been associated with an increase in digital credits. New players with little experience enter the market and exploit regulatory arbitrage, but often these players have no (or only a partial) obligation to report to respective systems for sharing credit information or to supervisory bodies, which introduces severe vulnerabilities. In addition, the low entry threshold of digital financial products, due to their convenience and simplicity for customers, provides fertile ground for exploitative financialisation. Underserved households and MSMEs with limited financial literacy may be lured into taking up unsuitable and unaffordable digital credits, leading to over-indebtedness and bankruptcy. The last challenge arises from significantly shorter loan maturities in MSME lending if current forms of digital lending are scaled up. This is problematic, as firms need loans with longer maturities to realise productivity-enhancing medium- and long-term investments, many of which include complementary investments in labour, thereby contributing to an improvement in job quality.
Topic:
Development, Finance, COVID-19, Lending, Digital Finance, and Loans
Political Geography:
Global Focus