Alternative development financing mechanisms for poverty reductionDIIS Report analyses pre-crisis trends and post-crisis outlookOver the past decade, development policy has witnessed a clear shift towards a poverty reduction agenda. Unsurprisingly, this has been accompanied by changes in views concerning development finance. A dominant refrain of the present agenda is that ‘traditional’ approaches to development finance, characterised by official bilateral and multilateral assistance to discrete projects through a combination of loans and credits, have been inadequate. In response, reforms of traditional aid and alternative approaches to financing are being advocated. This study assesses the recent evolution of non-traditional approaches to development finance. It includes 1) an examination of the characteristics of the alternative financing mechanisms that have emerged over recent years; 2) an analysis of their (combined) contribution to addressing development financing challenges in the poorest countries; and 3) considerations over the future prospects of alternative financing mechanisms. Previous studies retain a relatively narrow focus and therefore fail to capture either the comparative characteristics of alternative financing mechanisms or the extent to which |
| different instruments (or actors) may act as substitutes or complements to development assistance. This study seeks to address these shortcomings by providing an integrated and up-to-date perspective on recent developments, focussing on the extent to which more specific financing challenges are addressed. The study concentrates mainly on issues relevant to sub-Saharan Africa – as getting development finance “right” seem to be most important here. |
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