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Development Cooperation in Times of Crisis

Development Cooperation in Times of Crisis

José Antonio Alonso
José Antonio Ocampo
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  • Book Info
    Development Cooperation in Times of Crisis
    Book Description:

    Leading governments undertook extraordinary measures to offset the 2008 economic crisis, shoring up financial institutions, stimulating demand to reverse recession, and rebalancing budgets to alleviate sovereign debt. While productive in and of themselves, these solutions were effective because they were coordinated internationally and were matched with sweeping global financial reforms. Unfortunately, coordination has weakened after these initial steps, indicating one of the crisis's adverse effects will be a significant reduction in development cooperation.

    Urging advanced nations to improve their support for development, the contributors to this volume revisit the causes of the 2008 collapse and the ongoing effects of recession on global and developing economies. They reevaluate the international response to crisis and suggest more effective approaches to development cooperation. Experts on international aid join together to redesign the cooperation system and its governance, so it can accept new actors and better achieve the Millennial Development Goals of 2015 within the context of severe global crisis. In their introduction, José Antonio Alonso and José Antonio Ocampo summarize different chapters and the implications of their analyses, concluding with a frank assessment of global economic imbalance and the ability of increased cooperation to rectify these inequalities.

    eISBN: 978-0-231-50439-3
    Subjects: Business, Economics, Finance

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-x)
  3. CHAPTER 1 Introduction
    (pp. 1-16)
    José Antonio Alonso and José Antonio Ocampo

    Although the first signs of the current crisis appeared in mid-2007, it was not until September 2008 that the international community became fully aware of the scale and severity of the threat to the global economy. The dramatic bankruptcy of Lehman Brothers that month left the U.S. financial system on the brink of collapse, endangering international economic stability. The rapid reaction of authorities on both sides of the Atlantic saved the financial system from bankruptcy, but it could not prevent economies around the world from slumping simultaneously into a sharp recession that is still affecting growth and overall well-being. Although...

  4. CHAPTER 2 The Great Recession and the Developing World
    (pp. 17-81)
    José Antonio Ocampo, Stephany Griffith-Jones, Akbar Noman, Ariane Ortiz, Juliana Vallejo and Judith Tyson

    The developing world experienced a pattern of rapid and broad-based economic growth, at a rate of more than 7 percent per year during the period 2003–2007—much faster than the industrial world, which grew at a rate of 2.7 percent. Such phases of “catching up” (or convergence) with the industrial world have been rare through history, which has been characterized by a divergence in the growth of the developing versus the industrial world, a pattern that was typical in many parts of the developing world during the “lost decade” of the 1980s, as well as through the 1990s and...

  5. CHAPTER 3 The International Financial Architecture Seen through the Lens of the Crisis: Some Achievements and Numerous Challenges
    (pp. 82-141)
    Stephany Griffith-Jones and José Antonio Ocampo

    This chapter looks at the process of international financial and monetary reform from the Asian crisis until the end of 2010, in terms of the basic objectives that should be met by the international financial architecture. There are essentially five objectives: (1) to regulate the financial and capital markets in all countries, as well as cross-border transactions, in order to avoid the excessive accumulation of risk, which has caused frequent and costly crises in both developing and developed countries; (2) to offer emergency financing during crises, especially to ensure liquidity, complementing the functions of the central banks as lenders of...

  6. CHAPTER 4 The Economic Crisis and the International Aid
    (pp. 142-171)
    Andrew Mold and Annalisa Prizzon

    For many developing countries the financial and economic crisis that hit the global economy in the period 2007–2008 has been a “good crisis,” in the sense that, unlike during previous recessions, the vast majority have sustained economic growth. Indeed, some countries, notably the “Asian giants,” China and India, as well as other emerging powers, such as Indonesia, have continued to grow very rapidly. Although lower than pre-crisis peaks, external development finance (through trade, official development assistance [ODA], private investment, and remittances) also withstood the crisis relatively well. Crucially for the prospects of many resource-rich developing countries, despite a sharp...

  7. CHAPTER 5 Aid, Institutional Quality, and Taxation: Some Challenges for the International Cooperation System
    (pp. 172-247)
    José Antonio Alonso, Carlos Garcimartín and Víctor Martín

    In the last few years the international community has taken significant steps forward in defining its commitment to tackling poverty in a much more precise way. Through the Millennium Declaration—and the Millennium Development Goals (MDGs)—an agenda committing the whole of the international community has been achieved. Such progress has gone hand in hand with a series of proposals for reform to the methods of managing international aid in order to improve its effectiveness. Specifically, there is now a focus on the need for greater aid ownership by recipient countries and on the requirements for better coordination, harmonization, and...

  8. CHAPTER 6 The New Face of Development Cooperation: The Role of South-South Cooperation and Corporate Social Responsibility
    (pp. 248-313)
    Francisco Sagasti and Fernando Prada

    This chapter is an overview of international development finance and its future prospects and emphasizes two aspects that have emerged during the last decade. With this aim, the authors examine here the motivations of donors and providers of grants and other forms of financing, the capacity of recipient countries to mobilize domestic and external resources, and the financial instruments that connect donors and providers with recipients of financial resources. These elements provide a context in which to examine (1) South-South cooperation (SSC), which has acquired a new dimension as a number of developing countries have improved their living standards and...

  9. CHAPTER 7 Governance of the Aid System and the Role of the European Union
    (pp. 314-352)
    Owen Barder, Mikaela Gavas, Simon Maxwell and Deborah Johnson

    This chapter is about governance of the aid system, with a case study of the European Union (EU). The EU makes a good case study, because the global questions about governance of international aid also apply at the level of the EU. Is this a coherent and planned system or one that is more random and chaotic in nature? Is it capable of being governed and planned? Should it be governed and planned in its entirety? And assuming governance or architectural interventions are possible, should the aim be consolidation into fewer entities or cooperation among many?

    Within the world of...

    (pp. 353-358)
  11. INDEX
    (pp. 359-370)
  12. Back Matter
    (pp. 371-374)