Issues in Assessing the Impact of Project and Sector Adjustment Lending
Ali, Ifzal | December 1990
Abstract
The paper deals wich some conceptual and analytical issues in the area of international development financing. The major lending modalities of the multilateral financial institutions (HFIs) include project and adjustment lending. While project lending could be viewed as the modality for augmenting investment, the role of adjustment lending would be to facilitate adjustment of policies and institutions in developing countries. The purpose of this paper is to highlight the major conceptual issues in assessing the impact of project and adjustment lending focusing on the areas of commonality and points of departure in the two modalities. No attempt is made to infer implications for the procedures and policies of the HFIs. At the outset, a brief review of the evolution of project and adjustment lending would be instructive. Imperfections in the world capital markets led to the initial impetus for lending by the HFIs in developing countries for sound investment purposes. Lending through project loans with sufficiently high rates of return to service the loan and contribute to economic growth was advocated for two reasons. First, project loans were considered a good conduit for the transfer of technology to developing countries without adequate technical capacity to plan and execute projects. Second, capital accumulation was viewed as crucial to increasing growth rates. In the 1970s, it was recognized chat some project investments would not yield their potential rates of return without policy reforms. Poor policy environments were not conducive to effective operations of projects. For example, the crucial link between public utility pricing and project profitability was recognized and addressed through policy dialogue on subsectoral issues. Suggestions for policy reforms were limited to addressing issues related to project viability.
Citation
Ali, Ifzal. 1990. Issues in Assessing the Impact of Project and Sector Adjustment Lending. © Asian Development Bank. http://hdl.handle.net/11540/3081. License: CC BY 3.0 IGO.Keywords
Urban Development Finance
Trade Finance
Small Business Finance
Rural Finance
Roundtable on International Trade and Finance
Regional Development Finance
Public Service Finance
Public Finance
Project Finance
Private Finance
Nonbank Financing
Non-Bank Financial Institutions
Municipal Finance
Local Government Finance
Local Currency Financing
Limited Resource Financing
International Financial Institutions
Infrastructure Financing
Industrial Finance
Government Financial Institutions
Government Finance
Financing of Infrastructure
Financial Sector Development
Financial Regulation
Taxation
Public Accounting
National Budget
Municipal Bonds
Local Government
Local Taxes
International Monetary Relations
International Financial Market
International Banking
Central Banks
Business Financing
Capital Resources
Budgetary Policy
Capital Needs
Corporate Divestiture
Capital Instruments
Pension Funds
Insurance Companies
Banks
Portfolio Management
Fiscal Administration
Economics of Education
Development Banks
Use tax
Taxing power
State of taxation
Tax-sales
Tax revenue estimating
Tax planning
Spendings tax
Special assessments
Tax administration and procedure
Sales tax
Real property and taxation
Progressive taxation
Effect of taxation on land use
Effect of taxation on labor supply
Intergovernmental tax relations
Inheritance and transfer tax
Energy tax
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