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Whatever it takes? The global financial safety net, Covid-19, and developing countries

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  • Stubbs, Thomas
  • Kring, William
  • Laskaridis, Christina
  • Kentikelenis, Alexander
  • Gallagher, Kevin

Abstract

Multilateral financial institutions have pledged to do whatever it takes to enable emerging market and developing countries to fill a $2.5 trillion financing gap to combat Covid-19 and subsequent economic crises. In this article, we present new datasets to track the extent to which multilateral financial institutions are meeting these goals, and conduct a preliminary assessment of progress to date. We find that the International Monetary Fund and the principal regional financial arrangements have made relatively trivial amounts of new financing available and have been slow to disburse the financing at their disposal. As of July 31, 2020, these institutions had committed $89.56 billion in loans and $550 million in currency swaps, totaling $90.11 billion—just 12.6% of their current capacity. The new datasets allow scholars, policymakers, and civil society to continue to track these trends, and eventually examine the impact of such financing on health and development outcomes.

Suggested Citation

  • Stubbs, Thomas & Kring, William & Laskaridis, Christina & Kentikelenis, Alexander & Gallagher, Kevin, 2021. "Whatever it takes? The global financial safety net, Covid-19, and developing countries," World Development, Elsevier, vol. 137(C).
    • Handle: RePEc:eee:wdevel:v:137:y:2021:i:c:s0305750x20302989
    DOI: 10.1016/j.worlddev.2020.105171
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    3. Gerson Javier Pérez-Valbuena & Paula Barrios, 2022. "Subnational fiscal accounts under pressure: the effects of COVID-19 in a developing country," Documentos de trabajo sobre Economía Regional y Urbana 306, Banco de la Republica de Colombia.
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    5. Yushkov, A. & Alexeev, M., 2021. "The fiscal impact of the COVID-19 pandemic on the Russian regions: An overview of federal support measures," Journal of the New Economic Association, New Economic Association, vol. 51(3), pages 232-242.
    6. Khurram Ajaz Khan & Zdenko Metzker & Justas Streimikis & John Amoah, 2023. "Impact of negative emotions on financial behavior: An assessment through general strain theory," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 18(1), pages 219-254, March.
    7. María del Carmen Valls Martínez & Pedro Antonio Martín Cervantes, 2021. "Testing the Resilience of CSR Stocks during the COVID-19 Crisis: A Transcontinental Analysis," Mathematics, MDPI, vol. 9(5), pages 1-24, March.
    8. Hausmann, Ricardo & Schetter, Ulrich, 2022. "Horrible trade-offs in a pandemic: Poverty, fiscal space, policy, and welfare," World Development, Elsevier, vol. 153(C).
    9. Li, Jingwei & Li, Shouwei, 2023. "Immunization of systemic risk in trade–investment networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 611(C).
    10. Alexander Kentikelenis & Thomas Stubbs, 2022. "Austerity Redux: The Post‐pandemic Wave of Budget Cuts and the Future of Global Public Health," Global Policy, London School of Economics and Political Science, vol. 13(1), pages 5-17, February.
    11. Matthew Sparke & Owain David Williams, 2022. "Neoliberal disease: COVID-19, co-pathogenesis and global health insecurities," Environment and Planning A, , vol. 54(1), pages 15-32, February.
    12. Hugo Oriola & Jamel Saadaoui, 2024. "How do geopolitical interests affect financial markets reaction to international institution projects?," Working Papers of BETA 2024-25, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    13. Chiara Mariotti & María José Romero, 2022. "Demystifying Bretton Woods Institutions’ Rhetoric on Public Services," Development, Palgrave Macmillan;Society for International Deveopment, vol. 65(2), pages 217-227, December.

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