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Compensatory Financing for Shocks

What Changes Are Needed? - Working Paper #147

José Antonio Ocampo, Stephany Griffith-Jones

Paper  124kb pdf

One of the key aims of a development supportive international financial architecture—that is, one supporting growth and poverty reduction— is the provision of adequate countercyclical official liquidity in the face of external shocks. External shocks tend to have very large negative effects on developing economies’ growth, investment and poverty. Thus, provision of appropriate official liquidity and aid can potentially be very effective for protecting economic growth (and the income of poor people) from the negative impact of economic shocks, whether these relate to terms of trade, volatility of private capital flows or natural disasters. In this paper the authors focus mainly on shocks arising from trade. They argue that there is a great urgency to improve existing compensatory financing mechanisms quickly and/or design new ones where gaps exist.

About the Authors

José Antonio Ocampo
Co-President
Initiative for Policy Dialogue (IPD)

Jose Antonio Ocampo is Co-President of IPD, Professor of Professional Practice in the School of International and Public Affairs, and Fellow of the Committee on Global Thought at Columbia University. Prior to his appointment at Columbia, Professor Ocampo served as the United Nations Under-Secretary-General for Economic and Social Affairs, and head of UN Department of Economic and Social Affairs (DESA), as Executive Secretary of the UN Economic Commission for Latin America and the Caribbean (ECLAC), and has held a number of high-level posts in the Government of Colombia, including Minister of Finance and Public Credit, Director of the National Planning Department, and Minister of Agriculture . Professor Ocampo is author or editor of over 30 books and has published over 200 scholarly articles on macroeconomic theory and policy, international financial issues, economic development, international trade, and Colombian and Latin American economic history.

Stephany Griffith-Jones
Financial Markets Program Director
Initiative for Policy Dialogue (IPD)

Stephany Griffith-Jones is an economist specialising in international finance and development, with emphasis on reform of the international and national financial system, especially in relation to financial regulation and global governance. She is Financial Markets Director at the Initiative for Policy Dialogue, Columbia University. Previously she was Professorial Fellow at the Institute of Development Studies at Sussex University. She was Director of International Finance at the Commonwealth Secretariat and worked at UN DESA and ECLAC. She was senior consultant to governments in Eastern Europe, Latin America and Africa and many international agencies, including the World Bank, the IADB, the European Commission, UNDP and UNCTAD. She was a member of the Warwick Commission on financial regulation. She currently is theme leader on finance in the ESRC /DFID growth programme for LICs, especially African ones. She has published over 20 books and many scholarly and journalistic articles. Her books include Time for the Visible Hand, Lessons from the 2008 crisis, edited jointly with José Antonio Ocampo and Joseph Stiglitz.

Publication Information

Type Working Paper
Program Governance of Globalization
Posted 03/13/08
Download 124kb pdf
# Pages 23