Shifting Financial Flows to Low-Income Countries

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Shifting Financial Flows to Low-Income Countries

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Titel: Shifting Financial Flows to Low-Income Countries
From Official Aid to Private Finance?
Forfatter: Thomsen, Lotte
Resume: Within the last decades, the share of government aid in overall external financial flows to developing countries has decreased. It is estimated that between 75 and 85% of all current financial flows to developing countries derive from a variety of private sources, including remittances, investment, commercial loans and charity, compared to some 65% in 1990 (see also Jones, 2007). Similarly, it has been estimated that total private flows reached 647 billion USD in 2006, which is roughly four times their level in the 1980s. This may imply a diminished or different role for official financing from ‘traditional’ donors, at least in relative terms (Dorsey et al., 2008; Steer, 2008). Yet, it has been pointed out (Steer, 2008) that the size, impact and relation of private financial flows to public flows are not fully understood, not least because monitoring systems in many developing countries are rudimentary, and e.g. FDI widely underestimated. Simultaneously with this increase in private finance to developing countries, the number of both private and public aid sources, including bilateral donor channels, multilateral organizations, funds and programmes, have been growing so that they now are higher in number than the number of developing countries they are created to assist (IDA, 2007). Against this background, this paper aims to provide an overview of recent and current changes in financial flows to developing countries. First, it explores the different types of financial flows to developing countries aiming at determining their recent and current importance. Second, to the extent possible, the tendencies described are broken down to particular developing countries or regions, and attention is also paid to whether or not the particular types of flows benefit certain sectors over others. Third, the described tendencies are compared, while their impact on developing countries is briefly discussed and concluded.
URI: http://hdl.handle.net/10398/9484
Dato: 2017-05-08

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