In order for microfinance institutions to reach more poor people they should become an integral part of the financial sector, and develop as sound domestic intermediaries. They should go commercial, broadening their client basis and scaling up their loans to small enterprises. Will it mean that...

The long-term decline in political instability continued in 2006 and armed conflicts, though still widespread, have diminished. Multiparty elections have taken place in several African countries and progress towards participative democracy is encouraging. Progress in economic governance is still...

Foreign investment in telecommunications in Latin America has amounted to over $110 billion since 1990, more than for all other developing countries combined. Only one in four of the poorest Latin Americans has a telephone line; competitive markets and policies promoting access can help narrow...

The focus on war and anecdotal evidence hides real progress towards more stable and open political systems in Africa. This is demonstrated by a new indicator based on a systematic screening of political events and decisions over the last ten years. The diagnosis for 2004 and 2005 is more...

The financing of health care is a major challenge for developing countries, especially since deficiencies in national health systems specifically harm the poor. Innovative financing mechanisms, such as private health insurance, offer benefits and risks. Their implementation requires caution on...

Decentralising health services – the transfer of power and responsibility from the central to the local level – should help the poor if local resources, accountability and governance are in good shape. The process in China and India had negative effects because local governments remained...

Cancelling of poor-country debt does not mean that the best way to give aid is through grants only. Aid through loans may often prove superior, provided that it maintains debt sustainability. A new scheme for soft loans is suggested, with higher interest rates and cancellation provisions if bad...

Growth will accelerate for net oil exporters and weaken slightly for oil importers. Inflation is rising due to increases in the price of food imports and rising oil prices. The current-account deficits of oil-importing countries are increasing.

Over the past 20 years, public attitudes towards aid in OECD countries have remained steadily positive throughout economic ups and downs. At the same time, polling data shows that voters continue to strongly support aid to developing countries, despite the financial crisis.

To meet pressing development challenges, Latin American states need fiscal resources. The good news is that in the last decade, favourable macroeconomic conditions and the design of better tax systems pushed up fiscal revenues in Latin America. Notably, tax revenues have increased by close to...