Sustainable Financing for Development

By Homi Kharas, Sachin Chaturvedi, Mustafizur Rahman, and Imme Scholz

Abstract

Developing countries face challenges in using cross-border capital flows to fund investments in sustainable development. International financial institutions have a key role to play in minimizing risks to developing economies while ensuring more efficient allocation of public and private capital. However, the global financial architecture is not yet fit for the task. To advance sustainable financing, we recommend that the Japanese G20: (i) agree on measures to catalyze and mobilize private capital in support of the SDGs; (ii) promote measures to improve the allocation of development finance; and (iii) establish, and encourage commitment to, funding approaches for global public goods.