The Role of International Financial Institutions

Abstract

Multilateral and regional financial institutions have adopted numerous instruments designed to provide financial assistance to countries hit by disaster. Their aim is to support immediate relief to populations, as well as recovery and reconstruction. Over the last decades, development banks have extended the scope of their assistance, on the assumption that to overcome emergencies and difficulties due to disaster, the adoption of preventive measures can be as important as post-disaster operations. Consequently, new financial instruments have been introduced, focusing on prevention and disaster risk reduction actions by beneficiaries. All these initiatives may include a component in favor of the least developed countries, to make financial resources available to them on concessional terms. In more recent practice, debt relief programs have also been introduced to reduce the debt of beneficiary countries toward international financial institutions, so that more resources can be allocated to humanitarian assistance, recovery, and reconstruction programs.This chapter will analyze the practice of the International Monetary Fund and the World Bank Group. The analysis will be carried out in the light of the general instruments of financial assistance adopted by these institutions, to explore to what extent positive discrimination is applied in favor of countries affected by disaster. Special emphasis will be placed on whether co-ordination mechanisms are implemented between these institutions and between them and other actors, both States and other intergovernmental (regional or universal) organizations providing financial assistance. The purpose is to explore whether mechanisms of international governance have emerged in the practice.