Table Of ContentPalgrave Studies in Impact Finance
Series Editor
Mario La Torre
Sapienza University of Rome
Rome, Italy
The Palgrave Studies in Impact Finance series provides a valuable scien-
fi ‘ ’
ti c hub for researchers, professionals and policy makers involved in
fi
Impact nance and related topics. It includes studies in the social,
fi
political, environmental and ethical impact of nance, exploring all
fi
aspects of impact nance and socially responsible investment, including
fi
policy issues, nancial instruments, markets and clients, standards,
fi
regulationsand nancialmanagement,withaparticularfocusonimpact
fi
investments and micro nance.
Titles feature the most recent empirical analysis with a theoretical
approach, including up to date and innovative studies that cover issues
fi
which impact nance and society globally.
More information about this series at
http://www.springer.com/series/14621
Gianluigi Giorgioni
Editor
Development
Finance
Challenges and Opportunities
Editor
GianluigiGiorgioni
TheUniversityofLiverpool
Liverpool,UnitedKingdom
PalgraveStudiesinImpactFinance
ISBN978-1-137-58031-3 ISBN978-1-137-58032-0(eBook)
DOI10.1057/978-1-137-58032-0
LibraryofCongressControlNumber:2017941280
©TheEditor(s)(ifapplicable)andTheAuthor(s)2017
Theauthor(s)has/haveassertedtheirright(s)tobeidentifiedastheauthor(s)ofthisworkinaccordance
withtheCopyright,DesignsandPatentsAct1988.
Thisworkissubjecttocopyright.AllrightsaresolelyandexclusivelylicensedbythePublisher,whether
thewholeorpartofthematerialisconcerned,specificallytherightsoftranslation,reprinting,reuseof
illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and
transmission or information storage and retrieval, electronic adaptation, computer software, or by
similarordissimilarmethodologynowknownorhereafterdeveloped.
Theuseofgeneraldescriptivenames,registerednames,trademarks,servicemarks,etc.inthispublica-
tiondoesnotimply,evenintheabsenceofaspecificstatement,thatsuchnamesareexemptfromthe
relevantprotectivelawsandregulationsandthereforefreeforgeneraluse.
Thepublisher,theauthorsandtheeditorsaresafetoassumethattheadviceandinformationinthis
book are believed to be true and accurate at the date of publication. Neither the publisher nor the
authorsortheeditorsgiveawarranty,expressorimplied,withrespecttothematerialcontainedherein
orforanyerrorsoromissionsthatmayhavebeenmade.Thepublisherremainsneutralwithregardto
jurisdictionalclaimsinpublishedmapsandinstitutionalaffiliations.
CoverImage©LucaTettoni,robertharding/AlamyStockPhoto
Printedonacid-freepaper
ThisPalgraveMacmillanimprintispublishedbySpringerNature
TheregisteredcompanyisMacmillanPublishersLtd.
Theregisteredcompanyaddressis:TheCampus,4CrinanStreet,London,N19XW,UnitedKingdom
To Julia and Isabella
Acknowledgments
The editor would like to thank DRIVE (Development Research
Initiative) Knowledge Platform of the University of Liverpool
Management School (ULMS) for the funding received for the organisa-
“ ”
tionoftheworkshopon DevelopmentFinance:IssuesandChallenges
heldinLiverpoolonFriday3July2015.Theworkshophasprovidedan
excellent platform to discuss ideas for this book.
vii
Contents
1 Introduction 1
Gianluigi Giorgioni
1.1 Introduction 1
1.2 Issues and Challenges: An Assessment of the Empirical
Evidence 4
1.3 Government Intervention and Financial Sector
Development 6
1.4 Overseas Aid as an Instrument of Development Finance 7
1.5 Migrant Remittances and Beyond: The Development
Implications of Human Capital Mobility and
Accompanying Financial Flows 8
1.6 MultinationalEnterprisesandEconomicDevelopmentin
’
Host Countries: What We Know and What We Dont
Know 9
fi
1.7 The Impact of Micro nance on Poverty Alleviation:
Making Sense of the Evidence 10
1.8 The Stock Market Development and Economic Growth
Puzzle: Empirical Evidence from Africa 11
References 12
ix
x Contents
2 Issues and Challenges: An Assessment of the Empirical
Evidence 19
Gianluigi Giorgioni
2.1 Introduction 19
2.2 Evidence from Impact of Finance upon Economic
Growth 23
2.3 Misallocation 29
2.3.1 Removal of Financial Frictions: The Case
of Microcredit 33
2.4 The Unbanked: The Role of Legal Titles and the Role
of Financial Illiteracy 38
2.4.1 The Role of Legal Titles 39
2.4.2 Financial Literacy 40
2.5 Conclusions 44
References 45
3 Government Intervention and Financial Sector
Development 53
Rashmi Arora
3.1 Introduction 53
3.2 Governments Should Intervene in the Financial Sector 55
3.2.1 Historical Evidence on Government Intervention 59
3.2.2 Role of Development Banks 61
3.2.3 Role of Government in Financial Regulation 64
3.3 Government Should Not Intervene 65
3.4 Conditional Interventions 69
3.5 Conclusion 71
References 72
4 Overseas Aid as an Instrument of Development Finance 79
Paul Mosley
4.1 Background to the Aid Debate 79
4.1.1 Introduction 79
–
4.1.2 TheEconomicsandPoliticsofAid(1945 1970s) 81
4.1.3 Analytical Frameworks for Understanding Aid
ff
E ectiveness 85
Contents xi
4.2 Aid,DonorPressureandRecipientResponseintheOpen
–
Economy (1980 Early 2000s) 90
‘ ’
4.2.1 Liberalisation and the Washington Consensus 92
‘
4.2.2 The Rise of Human Capital and the New
’
Poverty Agenda as Development Solutions 94
4.2.3 New Regression Results at the Millennium, and
Their Interpretation 96
4.3 Aid in the Twenty-First Century: Hopes Dashed and
Regained 99
4.4 Conclusions 105
References 107
5 Migrant Remittances and Beyond: The Development
Implications of Human Capital Mobility and
Accompanying Financial Flows 111
Ralitza Dimova
5.1 Introduction 111
5.2 The Economics of Labour Mobility and Related Cross-
Border Financial Flows 114
5.3 The Economics of Migrant Selectivity, Brain Drain and
Brain Gain 118
5.4 The Economics of Migrant Remittances 123
5.5 Putting It All Together and Moving Forward 131
5.5.1 Brain Drain, Brain Gain and the Intervening
ff
E ect of Remittances 131
5.5.2 The Special Case of Refugees, Displaced People
and Remittances 132
5.6 Conclusion 136
References 137
6 Multinational Enterprises and Economic Development in
’
Host Countries: What We Know and What We Dont
Know 147
Rajneesh Narula and André Pineli
6.1 Introduction 147
6.2 The Importance of FDI to Developing Countries 149
