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Begin New Search Publishing Institution Center for Global Development Author Scott Morris Publication Year within 10 Years

1. Greening the US Sovereign Bond Guarantee Program: A Proposal to Boost Climate-Directed Sovereign Finance in Developing Countries

Author:
Scott Morris, Rowan Rockafellow, and Alan Cameron
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Sovereign bond guarantees (SBGs) are an effective but underutilized instrument available to the US government in support of developing country partners. By protecting bond purchasers in the event of a foreign issuer country’s default, SBGs substantially reduce borrowing costs for developing country governments. In this CGD policy paper, we estimate the costs and benefits of historical US sovereign bond guarantees in order to model the use of SBGs for climate finance purposes. We demonstrate that the US government-provided SBG has the effect of conferring the US government’s cost of borrowing on the partner government. On that basis, it represents substantial savings for these countries. Based on this analysis, we propose a $20 billion “Green” SBG program aimed at financing climate change mitigation efforts in 28 emerging market economies. We estimate that the US government could support $20 billion in bond issuances through a subsidy outlay of $2 billion, resulting in a 22 percent reduction in borrowing cost of the target countries, which represents $4 billion in budgetary saving for their governments. We propose that the subsidy appropriations in support of the guarantees be retained and recycled within the Green SBG program, which would substantially improve the financial leverage of the program over time. We also suggest that the program could be used for climate adaptation purposes by targeting a different group of developing countries
Topic:
Climate Change, Development, Finance, Sustainability, and Green Transition
Political Geography:
North America and United States of America

2. Mapping China’s Participation in Multilateral Development Institutions and Funds

Author:
Scott Morris, Rowan Rockafellow, and Sarah Rose
Publication Date:
11-2021
Content Type:
Policy Brief
Institution:
Center for Global Development
Abstract:
China has emerged as a leading participant in multilateral development organizations. In many ways, this is a welcome development. Today’s global challenges, including COVID-19 and climate change, require an international response and have prompted renewed calls for increased multilateral engagement by the major economy countries. This, combined with the recognition of multilateral institutions’ high standards for transparency and environmental safeguards, have led the United States at times to encourage China to step up its multilateral contributions. At the same time, countervailing voices focused on strategic competition increasingly view China’s multilateral participation with skepticism. When the People’s Republic of China joined the World Bank in 1980, it was allocated 12,000 International Bank for Reconstruction and Development (IBRD) shares, becoming the Bank’s sixth largest shareholder with 3.47 percent of the of the voting power. By 2013, decades of rapid economic growth had propelled China to its current position as the IBRD’s third largest shareholder, eclipsing France, Germany, and the United Kingdom with 5.03 percent of IBRD voting power. In many ways, China’s rise in stature at the IBRD mirrors its growth in influence across the multilateral development system. This is certainly true of China’s increasing voting share in the World Bank, IMF, and UN system, all of which tie financial contributions to economic size (see Figure 1). But China’s growing importance in the multilateral system is also the product of distinct policy choices made by the Chinese government. These policy choices go beyond the wealth-based financial contributions that dictate IBRD shareholding to include voluntary financing, borrowing, and commercial contracting. In concert, they make China a unique player in the multilateral system by virtue of to its simultaneous roles as a multilateral organization donor, shareholder, aid recipient, and commercial partner.
Topic:
Development, International Cooperation, Multilateralism, and Participation
Political Geography:
China and Asia

3. Mapping China’s Multilateralism: A Data Survey of China’s Participation in Multilateral Development Institutions and Funds

Author:
Scott Morris, Rowan Rockafellow, and Sarah Rose
Publication Date:
11-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
A considerable body of recent research attempts to shed light on China’s bilateral aid and finance flows, but there have been fewer efforts focused on China’s participation in multilateral development channels. As a result, China’s role across the landscape of multilateral institutions and funds is poorly understood, even as China has emerged as a leading donor within many of these entities. Part of China’s increased multilateral engagement reflects its economic growth, with shareholding and assessed contributions based largely on economic size. But the government of China’s policy choices are also revealed, in part, through its patterns of voluntary funding, cooperation agreements, and influence through personnel instated in leadership positions. By collating data on China’s financial and non-financial engagement with multilateral development banks and other financial institutions, sector-based vertical funds, and the development entities of the United Nations, among others, this paper seeks to provide a clear picture of China’s role in the multilateral development system and the evolution of that role over the past decade. This assessment brings to light the weight of China’s voting power across the multilateral development banks, the extent to which Chinese firms benefit from procurement opportunities in multilateral institutions, and the degree to which China has achieved a singular position of being a large-scale donor and recipient in the multilateral system.
Topic:
Development, International Cooperation, Hegemony, and Multilateralism
Political Geography:
China and Asia

4. Operationalizing Climate Adaptation at the US International Development Finance Corporation: The Case for an Agriculture-Led Agenda in Low-Income Countries

Author:
Clemence Landers, Jocilyn Estes, and Scott Morris
Publication Date:
09-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The US International Development Finance Corporation (DFC) could be well placed to lead among development finance institutions (DFIs) on agriculture adaptation to climate change. With its mandate to support private investment in developing country markets, overcoming barriers to investment in agricultural adaptation—where agricultural growth is an estimated two to four times more effective at reducing poverty than growth originating from other sectors—is exactly the type of activity DFC is intended to pursue. Yet, DFC is paradoxically prone to the same investment incentives and disincentives as private investors with an investment portfolio that tends to favor lower risk, higher deal size (and lower overhead) transactions. So, while global estimates for adaptation investments financing needs total close to $140-$300 billion by 2030, a fraction of the global mitigation needs measured in the trillions of dollars, the barriers to project level investment in agriculture adaptation and resilience raises the risk that DFC will continue to favor larger and lower risk mitigation investments in more established markets. This paper reviews DFC’s agriculture portfolio, and based on this review, proposes elements of an agriculture strategy that can overcome barriers to adaptation and resilience investments in the most climate vulnerable markets.
Topic:
Agriculture, Climate Change, Environment, and Finance
Political Geography:
Global Focus

5. How Effectively Is the Asian Development Bank Responding to COVID-19? An Early Assessment

Author:
Azusa Sato, Rakan Aboneaaj, and Scott Morris
Publication Date:
08-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
In 2020, the Asian Development Bank (ADB) joined efforts by other multilateral development banks (MDBs) to rapidly scale up support to developing countries to address COVID-19. Beyond headline numbers, there has been less focus on how ADB’s support was distributed by country income group, sector, modality, and product. Using an updated dataset on commitments and disbursements between 2018 and end of December 2020, we compare “pre-crisis” and “crisis period” trends. We overlay ADB data on other publicly available datasets reflecting population size, mobility levels, and government fiscal stimulus to evaluate the responsiveness and size of ADB support vis-à-vis other MDBs. Our findings show ADB’s response was most significant in the countries that most needed support—low income economies with sharp GDP declines and limited fiscal response capacity. The health and public sector management sectors had significant surges in commitments, and impacted the modality used. While there was a rise in grant and concessional financing in 2020, non- concessional loans and sovereign operations still dominated during the crisis period. We suggest further work on how these changes impact development outcomes, with a view to recalibrating the bank’s strategies in some sectors and products in the medium term.
Topic:
Development, Finance, Pandemic, COVID-19, and Banking
Political Geography:
Asia

6. Examining World Bank Lending to China: Graduation or Modulation?

Author:
Scott Morris and Gailyn Portelance
Publication Date:
01-2019
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Under the World Bank’s 2018 capital agreement, borrowing countries are expected to gradually reduce their portfolios once a base income threshold—the Graduation Discussion Income (GDI)—is reached. However, the agreement also affirms the case for ongoing lending to these countries. One justification is tied to external value beyond the borrowing country’s borders (global public goods, or GPGs). Another is tied to building capacity within the borrowing country, which can mean a focus on sub-regions where poverty remains high and capacity weak. In this paper, we examine World Bank graduation policies and lending through the lens of China, which maintains a large portfolio of World Bank projects. China currently exceeds the GDI thresholds for IBRD borrowing at the national level, while income inequality within the country leaves many noncoastal provinces below the GDI per capita threshold. Aggregate and provincial-level analysis of World Bank lending in China shows that less than half of China’s portfolio comprises activities clearly linked to GPGs, while a slight majority of projects are based in provinces with per capita income below the GDI threshold. A substantial number of World Bank projects in China focus on climate change mitigation and transportation infrastructure construction, while a smaller number relate to capacity building. Overall, we find evidence that China’s borrowing is broadly consistent with the 2018 principles of institutional capacity strengthening and GPG-related engagement, although significant areas of bank engagement do not appear to fall within the parameters of these principles.
Topic:
Poverty, Infrastructure, World Bank, and Inequality
Political Geography:
China and Asia

7. The Kunming-Vientiane Railway: The Economic, Procurement, Labor, and Safeguards Dimensions of a Chinese Belt and Road Project

Author:
Scott Morris
Publication Date:
05-2019
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The Kunming-Vientiane (K-V) railway, part of the Kunming-Singapore multi-country rail network (or “Pan-Asia Railway”), is an anchor investment of the Chinese government’s Belt and Road initiative (BRI). This case study will assess the rail project along four dimensions: economic implications; procurement arrangements; labor; and environmental and social safeguards. In each of these areas, evidence from the railway project suggests that Chinese policy and practice could be better aligned with the practices of other sources of multilateral and bilateral development finance. Where the project’s standards are broadly aligned, at least in principle, there is nonetheless reason to believe that China’s approach carries heightened risks given the overall scale of financing. These risks hold for China’s global program of official finance, which has made the country the largest source of official credit in the world. In this regard, BRI policymakers should consider a more rigorous set of “best practices” that align Chinese official finance with leading multilateral standards, even if these practices don’t currently characterize many other bilateral lenders. Such an approach would be consistent with the multilateral vision for BRI espoused by Chinese officials and reflected in the framework of the annual Belt and Road Forum for International Cooperation. This study considers what a stronger set of standards would look like in the context of the four areas of focus.
Topic:
Infrastructure, Belt and Road Initiative (BRI), Transportation, and Railways
Political Geography:
China and Asia

8. Promoting Investment in Research for Development Outcomes: A Research Ventures Fund at the World Bank

Author:
Scott Morris
Publication Date:
08-2019
Content Type:
Policy Brief
Institution:
Center for Global Development
Abstract:
This note proposes a new Research Ventures Fund (RVF) at the World Bank to better prioritize R&D investments in support of development progress. The RVF would employ financing mechanisms that are consistent with research needs: significant scale and scope, patience, and tolerance for failure. Existing development-oriented research consortia like CGIAR would provide a promising start for RVF funding allocations. Donors to the IDA-19 replenishment should take the first step in securing funding for the new fund in 2019.
Topic:
Development, International Cooperation, Science and Technology, World Bank, Finance, Research, and Banking
Political Geography:
Global Focus

9. ABCs of the IFIs: The African Development Bank, the Asian Development Bank, and the International Fund for Agricultural Development

Author:
Scott Morris, Erin Collinson, and Alysha Gardner
Publication Date:
10-2019
Content Type:
Policy Brief
Institution:
Center for Global Development
Abstract:
The African Development Bank (AfDB), the Asian Development Bank (ADB), and the International Fund for Agricultural Development (IFAD) are among the international financial institutions seeking pledges from donor countries as part of upcoming replenishment cycles in 2019 and 2020. The United States is a leading donor to these funds and has played a crucial role in shaping the institutions’ agendas throughout their histories.
Topic:
Agriculture, Development, Finance, Banks, Institutions, and Banking
Political Geography:
Africa and Asia

10. Lending Terms for IFAD Projects

Author:
Scott Morris and Jessie Lu
Publication Date:
11-2019
Content Type:
Research Paper
Institution:
Center for Global Development
Abstract:
Donor support for agriculture development is not keeping pace with developing country demand or the need for finance implied by Sustainable Development Goal 2. In order to increase the overall volume of resources available for these needs, IFAD is pursuing a reform agenda that considers providing loans on harder terms to its client countries. This study assesses whether this hardening of lending terms will affect country demand for projects. Using the World Bank experience as a proxy, this paper examines whether graduation from the International Development Association to the International Bank for Reconstruction and Development affects the sector portfolios of countries and the types of investment demands within agriculture through both statistical and qualitative country case study analysis. We find that as countries graduate, there is a relative shift away from “soft” sector investments and a different mix of investments within the agricultural sector. We argue that IFAD’s consideration of harder lending terms should also include consideration of how to respond to a different mix of country demand within the agricultural sector. Specifically, the fund should consider some scaling up of projects, increased emphasis on capital investments, and a greater emphasis on policy engagement with client countries.
Topic:
Agriculture, Development, Investment, Sustainability, and Banking
Political Geography:
Global Focus

11. The International Development Finance Club and the Sustainable Development Goals

Author:
Scott Morris
Publication Date:
12-2018
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The Sustainable Development Goals (SDGs) face a key dilemma . Although major multilateral institutions like the World Bank and the other core multilateral devel- opment banks (MDBs) have played a leadership role in shaping the SDG financing framework, there is a sig- nificant misalignment between the structure of these institutions and SDG financing needs . Specifically, the SDGs put countries, not multilateral institutions or foreign donors, at the forefront in achieving desired outcomes . Further, the SDG financing agenda identi- fies an important role for the private sector and other nonsovereign actors . Although the MDBs will remain key players in SDG financing, other leading actors—and particularly, other ways of organizing across institu- tions—will be needed to meet the SDGs . The International Development Finance Club (IDFC) is uniquely positioned to play a leadership role on the SDGs . A diverse group of development finance insti- tutions (DFIs), IDFC members collectively embrace a strong country-led focus and private-sector orienta- tion . Members represent a variety of models . Some act as national banks, focused primarily on domestic financing . Others act as bilateral aid agencies and DFIs . Still others act as regional and multilateral develop- ment institutions . Together they bring considerable financial and strategic resources to meet SDG financing needs, and they appear to be well matched to respond to key SDG requirements, including the call for nation- ally led development strategies and the need for sub- stantial private-sector and nonsovereign investment, particularly in infrastructure . This report surveys 22 IDFC member institutions to identify the club’s role in meeting SDG financing needs . Through institutional snapshots, aggregated financial data, qualitative inputs, and case studies, the report reveals a high degree of SDG relevance in these development institutions . We find that the total assets of IDFC institutions are significantly greater than the total assets of core MDBs, indicating that as an orga- nization, IDFC has untapped power as an organiz- ing platform for the SDG agenda . We also find a high degree of alignment between IDFC-reported activities and the full range of SDGs, though only a minority of IDFC members inform their operations with an explicit SDG strategy . Most relevant to the question of leveraging private financing for the SDGs, especially infrastructure, our survey indicates that as a group, IDFC members primarily finance nonsovereign enti- ties, especially private firms, in the course of pursuing development objectives . The IDFC could play a stronger leadership role on behalf of its membership by better aligning its mandate with the SDG agenda . We see a future in which IDFC members adopt common standards for SDG frame- works and for tracking the inputs and outputs relevant to the SDGs . Members should consider the degree to which they wish to make the club a meaningful plat- form for coordination, deliberation, and visibility for the broader SDG agenda . This agenda implies a wid- ening set of demands on members and may require a more robust secretariat to support a wider range of reporting activities, information gathering, agenda setting, and convening . Through a greater commitment to SDG-oriented activ- ities, IDFC members could demonstrate the value of organizing around national, bilateral, and multilateral development institutions to address the leading devel- opment challenges in the years ahead .
Topic:
Development, Finance, Sustainable Development Goals, and Sustainability
Political Geography:
Global Focus

12. Coming to Terms with China at the World Bank and in Development Finance

Author:
Scott Morris
Publication Date:
12-2018
Content Type:
Research Paper
Institution:
Center for Global Development
Abstract:
First, we should recognize that much of the value of the IFIs for the United States derives from their multilateral character. It greatly oversimplifies things to suggest they are strictly a US tool, available to do our bidding no matter what the issue. The reality is that when we want to get something done in these multilateral institutions, we need to work with other countries. In turn, these institutions are most effective when they have the buy-in of the largest number of their member countries. And when the United States is seeking something from them that doesn’t have broad-based support, it can be a tough road.
Topic:
Global Political Economy
Political Geography:
Global Focus

13. Multilateral Development Banking for this Century's Development Challenges: Five Recommendations to Shareholders of the Old and New Multilateral Development Banks

Author:
Nancy Birdsall and Scott Morris
Publication Date:
10-2016
Content Type:
Special Report
Institution:
Center for Global Development
Abstract:
The multilateral development banks (MDBs) emerged as one of the international community’s great success stories of the post–World War II era. Set up to address a market failure in long-term capital flows to post-conflict Europe and developing countries, they combined financial heft and technical knowledge for more than five decades to support their borrowing members’ investments in post-conflict reconstruction, growth stimulation, and poverty reduction. However, the geo-economic landscape has changed dramatically in this century, and with it the demands and needs of the developing world. Developing countries now make up half of the global economy. The capital market failure that originally motivated the MDBs is less acute. Almost all developing countries now rely primarily on domestic resources to manage public investment, and some of the poorest countries can borrow abroad on their own. Similarly, growth and the globalization of professional expertise on development practice have eroded whatever near-monopoly of advisory services the MDBs once had. At the same time, new challenges call for global collective action and financing of the sort the MDBs are well suited to provide but have been handicapped in doing so effectively. The list goes beyond major financial shocks, where the IMF’s role is clear—ranging from climate change, pandemic risk, increasing resistance to antibiotics, and poor management of international migration flows and of displaced and refugee populations. Other areas include the cross-border security and spillovers associated with growing competition for water and other renewable natural resources, and, with climate change, an increase in the frequency and human costs of weather and other shocks in low-income countries that are poorly equipped to respond.
Topic:
International Trade and Finance and International Development
Political Geography:
Global Focus