Current Financing Research Articles

External debt and monetary policy autonomy

During a time of rising world interest rates, the central bank of a small open economy may be motivated to increase its own interest rate to keep from suffering a destabilizing outflow of capital and depreciation in the exchange rate. Empirically, this paper shows that this is especially true for a small open economy with a current account deficit, which relies on foreign capital inflows to finance this deficit. In addition, the method of current account financing has a large effect on whether or not the central bank will opt for exchange rate and capital flow stabilization during a time of rising world interest rates. A current account deficit financed mainly through reserve depletion or the accumulation of private sector debt will cause the central bank to pursue de facto exchange rate stabilization, whereas a current account deficit financed through equity or FDI will not. Quantitatively, reserve depletion of about 7% of GDP will motivate the central bank with a floating currency to adjust its interest rate in line with the foreign interest rate to where it appears that the central bank has an exchange rate peg.

Reaching the global target to reduce stunting: an investment framework.

Childhood stunting, being short for one’s age, has life-long consequences for health, human capital and economic growth. Being stunted in early childhood is associated with slower cognitive development, reduced schooling attainment and adult incomes decreased by 5–53%. The World Health Assembly has endorsed global nutrition targets including one to reduce the number of stunted children under five by 40% by 2025. The target has been included in the Sustainable Development Goals (SDG target 2.2). This paper estimates the cost of achieving this target and develops scenarios for generating the necessary financing. We focus on a key intervention package for stunting (KIPS) with strong evidence of effectiveness. Annual scale-up costs for the period of 2016–25 were estimated for a sample of 37 high burden countries and extrapolated to all low and middle income countries. The Lives Saved Tool was used to model the impact of the scale-up on stunting prevalence. We analysed data on KIPS budget allocations and expenditure by governments, donors and households to derive a global baseline financing estimate. We modelled two financing scenarios, a ‘business as usual’, which extends the current trends in domestic and international financing for nutrition through 2025, and another that proposes increases in financing from all sources under a set of burden-sharing rules. The 10-year financial need to scale up KIPS is US$49.5 billion. Under ‘business as usual’, this financial need is not met and the global stunting target is not reached. To reach the target, current financing will have to increase from US$2.6 billion to US$7.4 billion a year on average. Reaching the stunting target is feasible but will require large coordinated investments in KIPS and a supportive enabling environment. The example of HIV scale-up over 2001–11 is instructive in identifying the factors that could drive such a global response to childhood stunting.

Who pays for cooperation in global health? A comparative analysis of WHO, the World Bank, the Global Fund to Fight HIV/AIDS, Tuberculosis and Malaria, and Gavi, the Vaccine Alliance

In this report we assess who pays for cooperation in global health through an analysis of the financial flows of WHO, the World Bank, the Global Fund to Fight HIV/AIDS, TB and Malaria, and Gavi, the Vaccine Alliance. The past few decades have seen the consolidation of influence in the disproportionate roles the USA, UK, and the Bill & Melinda Gates Foundation have had in financing three of these four institutions. Current financing flows in all four case study institutions allow donors to finance and deliver assistance in ways that they can more closely control and monitor at every stage. We highlight three major trends in global health governance more broadly that relate to this development: towards more discretionary funding and away from core or longer-term funding; towards defined multi-stakeholder governance and away from traditional government-centred representation and decision-making; and towards narrower mandates or problem-focused vertical initiatives and away from broader systemic goals.

Impacto de la universidad en la sociedad

El presente trabajo pretende compartir la experiencia colombiana con relación a la financiación de las instituciones de educación superior (Universidades) y sus implicaciones en cuanto a la gobernabilidad de las mismas para el cumplimiento eficaz de su misión, dada su naturaleza de bien publico al servicio del desarrollo territorial. Se parte de una descripción de la actual estructura de financiación de las instituciones de educación superior en Colombia, su caracterización, mecanismos de financiación, fuentes de ingresos y gastos, e impacto, teniendo en cuenta resultados en calidad, investigación (investigadores, grupos, publicaciones, proyectos), progreso social y competitividad,Indice de desarrollo humano e Indice Global de Competitividad, con cifras y datos del Sistema Nacional de Información de la Educación Superior-SNIES del Ministerio de Educación Nacional, Colciencias, DANE, Consejo Privado de Competitividad, Colombia Compra Eficiente, el Observatorio Colombiano de Ciencia y Tecnología (OCYT),y la Red de Indicadores de Ciencia y Tecnología Iberoamericana e Interamericana (RICYT) , el Indice de Progreso Social “IPS”, publicado anualmente por el Social Progress Imperative y el Indice Competitividad Global desarrollado por el Foro Económico Mundial. PNUD, IndiceGobal de Competitividad. Con base en lo anterior, se analizan algunos de los problemas nodales a que se enfrenta el modelo actual de financiación de las instituciones de educación superior en Colombia, especialmente las publicas, que ayudan a explicar, desde la financiación y la autonomía, la fragilidad del sistema impidiéndoles asumir a plenitud el rol de liderazgo que les compete para la transformación de las regiones y la nación.

Population ageing alongside health care spending growth

The Silver Tsunami or population ageing has become a globally widespread phenomenon. The purpose of this review is to observe its dynamics and consequences from a local Balkan perspective. The main drivers of this unique demographic evolution are extended longevity, improved early childhood survival, absorption of women into the labor markets, and consequences of sexual revolution leading to falling female fertility. This process lasting well over a century is taking its toll on contemporary societies. Major side effects are shrinking young labor force and growing pool of elderly and retired citizens in many countries. This equation tends to worsen further in the future threatening long-term financial sustainability of public social and health insurance funds. Notable health expenditure growth, accelerating worldwide since the 1960s, is to a large degree attributable to ageing itself. Growing share of senior citizens increases demand for medical services and costs of health care provision. Home-based care provided by the family caregivers presents another important reality putting a huge burden on modern communities. Serbs are no exception in this landscape. Historical demographic evolution of this nation gives a clear evidence of advanced and accelerated ageing, which is well documented in post-World War II era. This synthesis of rich published evidence shows clear upward parallel trend between the pace of population aging and the growth of health expenditure. National authorities shall be forced to consider reform of the current health care financing pattern inherited from the demographic growth era. This might be the only way to smooth out the impact of population ageing on the financial sustainability of the health system and long-term medical care in Serbia.

Research on Financing and Decision from Micro Enterprises in China <br/>—Based on Internet Financial Model Perspective

At present, the financing of small and medium-sized enterprises in China’s market economy has caused great concern of the whole society. Small and medium-sized enterprises financing difficulties directly affect our country to complete the “public entrepreneurship, people’s innovation” goal. There are many reasons for the financing difficulties of SMEs, such as the small and medium-sized enterprise’s financing characteristics, the state of small and medium-sized enterprise service system construction, financial institutions and credit evaluation mechanism of our country enterprise credit system etc. This paper argues that there are three reasons for the financing difficulties of SMEs: The first is the asymmetry of information between the two sides of the credit; secondly, the cost of the loan is huge. Finally, it is difficult to control credit risk. Therefore, in order to solve the problem of financing, we should focus on three aspects: Credit information, cost reduction and risk control. Internet banking model is not a traditional bank indirect financing model, nor is it a direct financing model on the capital market, but a multiagency cooperation to complete a new financing model. This model is convenient and rapid; it provides a feasible way to solve the financing difficulties of small and medium-sized enterprises, which can greatly improve the current financing environment.

System-wide analysis of health financing equity in Cambodia: a study protocol

BackgroundTo assess progress towards universal health coverage, countries like Cambodia require evidence on equity in the financing and distribution of healthcare benefits. This evidence must be based on a system-wide...

Gospodarka niskoemisyjna jako podstawa rozwoju regionu

All the time GDP per capita is far from the level in developed countries. Much worse was with the development, which was lower than the rate of economic growth. That is why we have in Poland, among others, a high level of poverty, the problem with providing adequate housing and health conditions, relatively high tax burden on people with the lowest incomes. In the next decade, the average growth rate of GDP may be significantly reduced because we have failed to build a sustainable competitive advantage. The previous success was mainly due to low labor costs, rather than innovation. Regions that wish to obtain long-term and high rate of economic development must build an advantage based on modern technology products and services. A low emission economy creates the chance. Especially that in the current financing perspective (2014-2020) the EU has allocated considerable resources for activities related to carbon efficiency. The article focuses on the benefits that region can get after the implementation of low emission economy. They concern, inter alia, the increase in local production of goods and services, growth in employment and average wages, improvement of the quality of the natural environment and ensuring energy security. These benefits come down to sustainable economic development in the long term. Building a low emission economy will allow to systematically increase the well-being of the population and improve the quality of life of people living in the municipality.

The Case Against Medicaid Expansion in North Carolina.

This commentary argues against Medicaid expansion in North Carolina for 5 reasons: Expansion will reduce access to care for highly vulnerable individuals who are already enrolled in Medicaid; it is unlikely to save lives; it is unaffordable in the long run; its current financing structure encourages fiscal irresponsibility; and it will eliminate more jobs than it creates.

Review of Global Shock, Risks, and Asian Financial Reform

Global Shock, Risks and Asian Financial Reform. Edited by Iwan J. Azis and Hyun Song Shin. Cheltenham, UK and Northampton, USA: Asian Development Bank and Edward Elgar Publishing, 2014. Pp. 731. Since the 2007-08 Global Financial Crisis (GFC), there have been many books written on the future of Asian finance and financial reform. This book, edited by Iwan J. Azis and Hyun Song Shin from the Asian Development Bank (ADB)/ Cornell University and Princeton University respectively, is the most comprehensive and in-depth study of the issues facing Asian finance to date. A hefty volume of over 700 pages and 18 chapters, written by ADB specialists, leading academics and financial policymakers, it deserves serious attention. Professor Shin has since moved to become the Economic Adviser and Head of Research at the Bank for International Settlements, helping to shape one of the most creative research agendas on current global finance, monetary and regulatory policy. The book comprises five parts: an introductory overview and summary by the editors; macro-prudential supervisory system and development impact; issues and challenges for the legal and institutional framework; (regional) financial integration and cooperation to support financial stability; and financial supervision and development challenges. Each section has an introduction with an overview of the findings and issues raised. The book is the outcome of an ADB research project on regulatory reform post-GFC and is very useful as a compendium and reference on regulatory issues for Asia up to 2012. The book focuses mostly on East Asia (particularly ASEAN countries). In contrast, South Asia and the Middle East economies are not given as much attention as they deserve. The overview in Part I by Azis and Shin provides a very useful summary but lacks a historical perspective, which begs a simple yet strategic question: as Asia evolves from the world's global supply chain to become a net lender through high savings and surplus, can it develop its own financial sector to better use its savings? Currently, the region suffers from exporting excess savings to advanced markets in London and New York and re-importing these back through foreign direct investments and portfolio flows that earn significantly higher returns. The region is also hostage to volatile capital flows and both India and China still maintain capital controls. How Asia manages its financial sector, particularly the difficult transition to totally open capital markets, will define its role in global leadership in the twenty-first century. In other words, the book takes the orthodoxy as given, recognizing that financial deepening is broadly good, albeit with risks to be managed. Even though it recognizes that there is no one-size-fits-all regulation or regulatory structure, it hints at current advanced markets--dominated by American and European thinking--as a model for Asia. The field of finance moves so rapidly that since the book was written, four major trends and events have turned and are turning the industry almost upside down. First, macroeconomic theory and finance is being challenged by central banks' unconventional monetary policy of moving interest rates beyond the lower boundary of zero. The spillover effects of such a move on financial markets and investor behaviour are still being digested and the outcome is highly uncertain. All that can be said is that savers recognize that they are being taxed indirectly, but steps made to adjust their portfolios remain to be seen. Second, financial technology platforms are challenging the payments, investment and transaction profits of traditional banks, insurance companies and asset managers. Their market valuation is currently worth more than the market capitalization of the largest banks. Third, as the implementation of the complex regulatory and legal reforms introduced post-GFC is being phased in, there has been some unexpected impact on market behaviour, such as flash crashes, high volatility and sudden liquidity stops. …

Unintended Consequences of Hospital Payment: The Case of Swiss Diagnosis Related Groups

Background: In 2012, Switzerland changed from retrospective to prospective hospital payment based on diagnosis related groups (DRGs), following the example of the United States, Australia, and Germany. As in these countries, the objective of this transition was to motivate hospitals to improve efficiency by making them bear financial risk to some extent.Objective: This contribution seeks to find out whether SwissDRG, the Swiss version of DRG payment, indeed provides hospitals with appropriate incentives, thus creating a level playing field enabling workable competition between them.Methods: Three conditions for creating a level playing are stated, of which the first is tested using data on some 757 000 patient cases treated by 93 hospitals in the year 2012.Results: The evidence suggests that hospital payment as currently devised by SwissDRG fails to create a level playing field. Differences in margins over cost of treatment can be traced to a hospital’s portfolio of specialties and mix of patients, both of which are largely beyond their control. The findings of this paper are subject to several limitations. The true DRG-specific cost distributions (and hence expected values) are not known; moreover, emphasis has been on variable cost, neglecting fixed (capital user) cost. Finally, hospitals with a high amount of capital user cost may well benefit from modern technology contributing to their efficiency in terms of variable cost.Conclusion: The finding that current hospital financing by SwissDRG fails to create a level playing field is likely to be robust, calling for an expeditious adjustment be-cause hospitals are exposed to financial risk to a greatly differing degree. It may be appropriate for them to purchase insurance against their financial risk, which is largely driven by influences beyond their control.

Zmiany w systemie wyrównywania dochodów samorządu województwa

The significant factor that enforces changes in the current local government financing system are some defects in the horizontal compensation scheme at the poviat and voievodship levels, expressed in the overdue redistribution of income. The changes in the local government income compensation scheme, as proposed recently by the legislator, result from the necessity to implement the recommendations of the Constitutional Tribunal. According to the Tribunal, the horizontal compensation scheme, based on transferring funds from wealthier local governments to poorer ones by the means of making payments for increasing the values of subsidies, should make for an exceptional measure and may only supplement the system of vertical compensating from the Treasury. The intention that stands behind the new draft is to introduce such a corrective and compensating mechanism that would not bring about reduction of incomes achieved by the contributing voivodeships. The proposed solutions would be temporary only - for the period of three years. Permanent solutions, however, need to be adopted to economical reforms, which will have an effect on incomes achieved by local government units.

Musharakah Tijarah Cross - Border Financing : Concept, Structure and Salient Features

Musharakah Tijarah Cross-Border Financing (“Product”) is the product to enable the Bank to undertake project and contract cross-border financing activities or other identified business ventures on “pure” Joint Venture basis, using the underlying Islamic financing contract of Musharakah. Musharakah concept has a low market share of less than 2.5% in the overall existing Islamic financing products in Malaysia. This product encourages mobilization of idle capital / cash entities and thus provides a basis for economic cooperation between these organizations in the society. The product also is expected to inject greater prosper to the Bank’s overall performance and ultimately able to assist small time landowners in a big way through business risk sharing. Musharakah provides an alternative investment, which will cater for Islamic investors and partners, especially from GCC, who may have been reluctant to invest in conventional or current debt-based financing scheme. With Musharakah concept, the most preferred and globally accepted Islamic financing, this can attract these investors to participate on similar risk-sharing arrangements through the creation of Specific Investment Account (SIA) or Islamic Syndication to back financing made into the Joint Venture.

Basic public services and the restructuring of the public finance system in China

Purpose The purpose of this paper is to examine the financing and provision of basic public services in China. The main issue addressed is how to reform the public finance system to achieve quality and fairness in the provision of basic public services. Design/methodology/approach Based on an historical analysis of the functional transformation of the public finance system in China and on an empirical analysis of the current public finance system and the public service provision system, a comprehensive understanding was gained about the relationship between the financing and provision of basic public services. Findings The paper argues that there is a close relationship between the provision of basic public services and the functional changes made to the public finance system. Based on a systematic retrospective study of the Chinese Government’s efforts to improve basic public services over the last three decades, this paper offers policy suggestions on further public finance restructuring that would support better service provision. Originality/value By analyzing issues in the public service provision system, this paper contributes to the debate about the efficiency improvement made to governmental functions in China.

The Global Engagement in Care Convening: Recommended Actions to Improve Health Outcomes for People Living With HIV.

The National HIV AIDS Strategy (NHAS) calls for a more coordinated response to the HIV epidemic. The Global Engagement in Care Convening created a forum for domestic and international experts to identify best practices in HIV care. This manuscript summarizes the meeting discussions and recommendations from meeting notes and an audio recording of the meeting. Recommendations include: further standardization of performance goals and performance measures; additional research; a more robust system to support competing needs of clients receiving services; electronic information exchanges for HIV-related data; an expansion of the role of other health professionals to extend the capacity of physicians and other members of the care team; and revisions to current financing systems to increase reimbursement for and access to services that promote linkage to and retention in HIV care. The recommendations provide a unique example of "reverse technical assistance" and will inform U.S. program development, research, and policy.

Dealer Compensation Programs in the Indirect Auto Finance Market: Conventional Reserves Versus Flat Fees

In the current indirect auto finance market, the conventional reserve program allows dealers to mark up the interest rate charged by a financial institution. Such a practice has led to significant disparities in the surcharge amount between minority and majority borrowers, and has caused serious regulatory concerns from the Consumer Financial Protection Bureau and the Department of Justice. In this paper, I build a simple double-marginalization model and investigate the possible impacts from the new flat fee program advocated by the regulatory agencies. I find that the new program successfully limits dealers' market power and reduces interest rates for minority borrowers. Majority borrowers may pay more under the new program, which can sometimes lead to a decrease in the overall consumer welfare.

Current trends in cooperative finance

Purpose The purpose of this paper is to explore the recent financial trends affecting grain and farm supply cooperatives. Design/methodology/approach Review of and descriptive analysis of current cooperative finance topics. Findings In recent years three important trends have become apparent among grain marketing and farm supply cooperatives. These farmer-owned firms have been rapidly investing in infrastructure, reformulating profit distribution and equity strategies, and have pursued consolidation with other cooperatives. Originality/value Grain and farm supply cooperatives are changing at a rapid clip to meet the needs of their evolving and growing farmer-owners. New research is needed to help these cooperatives meet these needs, and this paper identifies new areas of research in cooperative finance.

Making It Safe to Grow Old: A Financial Simulation Model for Launching MediCaring Communities for Frail Elderly Medicare Beneficiaries.

Policy Points: At age 65, the average man and woman can respectively expect 1.5 years and 2.5 years of requiring daily help with “activities of daily living.” Available services fail to match frail elders’ needs, thereby routinely generating errors, unreliability, unwanted services, unmet needs, and high costs.The number of elderly Medicare beneficiaries likely to be frail will triple between 2000 and 2050. Low retirement savings, rising medical and long‐term care costs, and declining family caregiver availability portend gaps in badly needed services.The financial simulation reported here for 4 diverse MediCaring Communities shows lower per capita costs. Program savings are substantial and can improve coverage and function of local supportive services within current overall Medicare spending levels. ContextThe Altarum Institute Center for Elder Care and Advanced Illness has developed a reform model, MediCaring Communities, to improve services for frail elderly Medicare beneficiaries through longitudinal care planning, better‐coordinated and more desirable medical and social services, and local monitoring and management of a community's quality and supply of services. This study uses financial simulation to determine whether communities could implement the model within current Medicare and Medicaid spending levels, an important consideration to enable development and broad implementation.MethodsThe financial simulation for MediCaring Communities uses 4 diverse communities chosen for adequate size, varying health care delivery systems, and ability to implement reforms and generate data rapidly: Akron, Ohio; Milwaukie, Oregon; northeastern Queens, New York; and Williamsburg, Virginia. For each community, leaders contributed baseline population and program effect estimates that reflected projections from reported research to build the model.FindingsThe simulation projected third‐year savings between $269 and $537 per beneficiary per month and cumulative returns on investment between 75% and 165%.ConclusionsThe MediCaring Communities financial simulation demonstrates that better care at lower cost for frail elderly Medicare beneficiaries is possible within current financing levels. Long‐term success of the initiative will require reinvestment of Medicare savings to bolster nonmedical supportive services in the community. Successful implementation will necessitate waiving certain regulations and developing new infrastructure in pilot communities. This financial simulation methodology will help leadership in other communities to project fiscal performance. Since the MediCaring Communities model also achieves the Centers for Medicare and Medicaid Services' vision for care for frail elders (better care, healthier people, smarter spending) and since these reforms can proceed with limited waivers from Medicare, willing communities should explore implementation and share best practices about how to achieve fundamental service delivery changes that can meet the challenges of a much older population in the 21st century.

Protecting human security: proposals for the G7 Ise-Shima Summit in Japan.

In today's highly globalised world, protecting human security is a core challenge for political leaders who are simultaneously dealing with terrorism, refugee and migration crises, disease epidemics, and climate change. Promoting universal health coverage (UHC) will help prevent another disease outbreak similar to the recent Ebola outbreak in west Africa, and create robust health systems, capable of withstanding future shocks. Robust health systems, in turn, are the prerequisites for achieving UHC. We propose three areas for global health action by the G7 countries at their meeting in Japan in May, 2016, to protect human security around the world: restructuring of the global health architecture so that it enables preparedness and responses to health emergencies; development of platforms to share best practices and harness shared learning about the resilience and sustainability of health systems; and strengthening of coordination and financing for research and development and system innovations for global health security. Rather than creating new funding or organisations, global leaders should reorganise current financing structures and institutions so that they work more effectively and efficiently. By making smart investments, countries will improve their capacity to monitor, track, review, and assess health system performance and accountability, and thereby be better prepared for future global health shocks.

The Problem With Estimating Public Health Spending

Accurate information on how much the United States spends on public health is critical. These estimates affect planning efforts; reflect the value society places on the public health enterprise; and allows for the demonstration of cost-effectiveness of programs, policies, and services aimed at increasing population health. Yet, at present, there are a limited number of sources of systematic public health finance data. Each of these sources is collected in different ways, for different reasons, and so yields strikingly different results. This article aims to compare and contrast all 4 current national public health finance data sets, including data compiled by Trust for America's Health, the Association of State and Territorial Health Officials (ASTHO), the National Association of County and City Health Officials (NACCHO), and the Census, which underlie the oft-cited National Health Expenditure Account estimates of public health activity. In FY2008, ASTHO estimates that state health agencies spent $24 billion ($94 per capita on average, median $79), while the Census estimated all state governmental agencies including state health agencies spent $60 billion on public health ($200 per capita on average, median $166). Census public health data suggest that local governments spent an average of $87 per capita (median $57), whereas NACCHO estimates that reporting LHDs spent $64 per capita on average (median $36) in FY2008. We conclude that these estimates differ because the various organizations collect data using different means, data definitions, and inclusion/exclusion criteria--most notably around whether to include spending by all agencies versus a state/local health department, and whether behavioral health, disability, and some clinical care spending are included in estimates. Alongside deeper analysis of presently underutilized Census administrative data, we see harmonization efforts and the creation of a standardized expenditure reporting system as a way to meaningfully systematize reporting of public health spending and revenue.