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Washington, D.C., United States Agency for International Development, 1990 Jul. x, 21 p. (A.I.D. Program Evaluation Discussion Paper No. 31)This report examines the critical issues involved in continued donor support for development finance institutions (DFI) based on a review of donor experience and explores the effectiveness of DFI as "intermediaries for targeting credit to priority sectors, the long-term sustainability of DFI in developing countries and the contribution of DFI to the development of financial markets." The key question is whether DFI can mobilize local resources and supply long-term credit to priority groups in developing countries. This report is based on the work of the Development Assistance Committee (DAC) of the Organization for Economic Cooperation and Development which established an Expert Group on AID Evaluation representing 9 major donors and covering the period from 1975 to the late 1980's. Despite several examples of DFI programs positively affecting credit availability and private sector growth (Korea, Pakistan, Costa Rica, Indonesia, and Tanzania) the consensus was the DFI reach very few target groups because of: 1) eligibility requirements to get credit; 2) transaction costs of credit; and 3) interest rates charged to sub-borrowers. DFI have not become sustainable intermediaries because of poor financial performance due to: 1) the inability of DFI to mobilize domestic savings and to operate as "full-fledged" financial institutions; 2) restrictions and prohibitions (interest rate ceilings and legal/contractual prohibitions) making them specialized as opposed to a decentralized operation; and 3) a management capability that cannot compete in a "complex economic environment." Lastly, DFI have been unable to contribute to financial market developments in developing countries due to financial policy measures limiting DFI from offering new financial services. Changes should be directed at donors that could increase the efficiency and performance of DFI in the future.
In: Population policy: contemporary issues, edited by Godfrey Roberts. New York, New York/London, England, Praeger, 1990. 179-91.The primary role of the World Bank is to assist Third World governments in the economic and social development process. Given the World Bank's view that reductions in fertility and mortality will lead to improvements in productivity, GNP growth, and maternal-child health, its population activities are focused on encouraging governments to adopt fertility decline as a national development objective and on providing loans for implementing population programs. The Bank's sector work, including country economic reports and population sector analyses, has been most ambitious in countries where there was no population policy or program, especially sub-Saharan African countries. Even in pronatalist countries, this sector work has been instrumental in leading to an open discussion of population issues. In other countries, such as Indonesia, the Bank's population sector work has been instrumental in helping governments to develop and implement a population program. Through the World Bank's access to the highest levels of government and its links to a wide range of ministries, it is in a position to influence governments by providing information about the seriousness of the population problem. In Africa, this type of dialogue has been facilitated through a series of regional senior policy and management-level seminars. The Bank is further able to shape policy development through its involvement in project identification and implementation. In recent years, Bank-funded projects have placed greater emphasis on management, institution building, demand-generation activities, and involvement of the private sector in service delivery. In the area of research, the Bank's current priority is the internal efficiency of alternative policy and program strategies. Evaluations have identified the policy dealogue that links population issues with other aspects of development as the World Bank's most effective role.