Retooling Global Development and Governance

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This publication provides a whole new set of ideas on how to overcome the deficiencies in the ongoing process of globalization and in the existing mechanisms for global economic governance. It points out promising directions for reform, including: strengthening government capacities for formulating and implementing national development strategies; doing more to ensure that official development assistance is aligned with national priorities; strengthening the international trade and financial systems so that countries with limited capabilities can successfully integrate into the global economy; and creating new mechanisms for dealing with deficiencies. The authors do not pretend to offer a blueprint, but aim instead at presenting ideas that could become the basis for a new, coherent “toolbox” designed to guide development policies and international cooperation.



Reforming the international financial architecture

Ensuring that developing countries are able to increase their rate of investment is as big a challenge today as it was in the early days of development thinking. During the 1980s and 1990s, structural adjustment programmes coupled with the liberalization of private capital flows had been expected to increase the rate of investment in developing countries. Instead, the rate of fixed investment stagnated in most parts of the world, despite a significantly higher level of international financial flows (see figure V.1). Meeting sustainable development objectives will require an investment regime that can underpin private risk-taking with sufficient stability.


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