
Francois Bourguignon
Is the global financial crisis at the heart of the emerging landscape of development finance? Francois Bourguignon, at the opening plenary of GDN’s Annual Conference, says not. Bourguignon, Director of the Paris School of Economics, speaking in the session ‘Financing Development in a Post-Crisis World: The New Agenda’ believes that the changes in the global economy had already been set in motion before the crisis. This was underpinned by a shift over time from a focus on the quantity to quality of development finance.
For many years, policy makers and academics talked about a two gap model, which saw development countries as lacking investable resources and foreign currency. The solution to this problem was seen as increasing foreign flows, and this led to a focus on North-South flows of finance.
The quantity of development finance is no longer seen as the primary restraint on development. Bourguignon was keen to point out that this shift is linked to the evolution of the global economy, and the acceleration of growth rates in the South.
Emerging Economies
In the majority of emerging economies, finance is not seen as a problem because of advances in international capital markets, countries and their financial sectors. It was also outlined how this situation has been enhanced by domestic saving rates, which have increased by around 3.5% since the 1970s in low and middle-income countries (increasing from 20% to 23.5%).
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