F1ID 4050 - Financing Development: The Architecture of International Development Finance

Economic development requires investment in physical and human capital. This course introduces the complex financial architecture that has developed to channel financial resources to emerging economies. These include the multilateral institutions (IMF, World Bank Group, regional development banks and climate funds); bilateral development partners and government-to-government lending; commercial banks; and financial markets. Remittances, direct investment from private actors, and domestic fiscal revenue also play significant roles in financing development.

The course will provide students with, first, a good working knowledge of these different financing mechanisms: their governance, their financial instruments and their modus operandi, including how the different development institutions raise their capital. It will cover how the global financial sector (securities markets, commercial banks, foreign direct investment, remittances) work, and how they participate in financing development. Second, the course will cover how this financing is deployed in emerging economies to finance their development needs, in different sectors of the economy (infrastructure, agriculture, health, education, private sector development, etc.). Actual country examples and hands-on project case studies based on real projects will be extensively used for students to work interactively on the project investment cycle in which projects and programmes are identified, appraised, financed, and managed.

Learning Outcomes

• Solid working understanding of the development process at the programme and project level; the financial sector; and key financial concepts and players participating in economic development.
• Ability to interact effectively with financial players (development banks, bilaterals, private sector banks and investors, ministries of finance) on development issues.
• Familiarity with and ability to use (at high level) the key economic and financial tools needed as a development professional: macroeconomic, microeconomic, financial analysis and project finance.
• Ability to analyze complex development issues, identify possible solutions and structure a financing response.

Professional Skills

Ability to formulate development policies based on solid micro-economic principles (market structure; economic behavior of firms; stakeholder engagement, etc.).

Project financial analysis; and financial structuring using both sovereign financing and limited recourse financing.

Strong interest in geopolitics and economic development. Basic economics and/or prior work in development a plus .

The course will include several micro-economic concepts such as market structure, firm behavior, and the impact of economic policies on the economy. Some understanding of micro-economics, or the willingness to acquire it during the course, is strongly encouraged.

Students will be graded on:

(a) team presentations (teams of three students each) presented to the class on selected topics.

(b) A Policy Paper on a selected topic (from a short-list of topics provided, about 5 to 10 pages in length), prepared after the end of the course, will contribute to the final grading.

(c) Students will also be evaluated on their class participation.

Grading:

• Team presentation 30%
• Policy Paper 50%
• Group participation 20%

• In Class Presence: 4 hours a week / 24 hours a semester
• Online learning activities: 3 hours a week / 18 hours a semester
• Reading and Preparation for Class: 4 hours a week / 24 hours a semester
• Research and Preparation for Group Work: 4 hours a week / 36 hours a semester
• Research and Writing for Individual Assessments: 4 hours a week / 48 hours a semester
• Acquisition of fundamentals of micro-economics (if not known): 2 hours a week / 24 hours a semester