Should countries be more like shopping malls? A proposal for Service Performance Guarantees

Alan Gelb, Vijaya Ramachandran, Matthew Juden and Alice Rossignol

Development Policy Review, 2019, vol. 37, issue 4, 526-545

Abstract: Through an examination of existing guarantee mechanisms, this article sets out and explains a proposal for the adoption of Service Performance Guarantees (SPGs) by developing countries working to attract foreign investment. The proposed approach is to offer investing firms the opportunity to purchase insurance against a wider range of risks than is currently possible, with highly visible payouts if service delivery standards fall short of those expected from the programme. The SPG contracts would be covered by a “domestic reserve” funded from premiums paid in by the firms and backed up by a further guarantee issued by a development partner. This approach restructures accountability to create a partnership of donors and recipient governments, accountable to their investor clients.

Date: 2019
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https://doi.org/10.1111/dpr.12369

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Persistent link: https://EconPapers.repec.org/RePEc:bla:devpol:v:37:y:2019:i:4:p:526-545

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