Research

To fulfill the promise of mobilizing finance in under-served markets, several donor governments have opened the capital of their bilateral development finance institutions (DFIs) to commercial shareholders. What happens when private owners enter public development institutions mandated to invest and assume risk where private investors will not? I argue that ownership structure shapes how much risk a DFI can take on: commercial shareholders selectively enforce risk discipline, which limits a DFI ability to be additional in markets scarce in capital. Drawing on an original dataset of 11,180 investments by 12 donor-DFIs across 129 recipient countries (1970–2024) and a shift-share instrument, I show that commercially owned DFIs reduce commitments to recipients with a higher credit risk profile, while fully public DFIs do not. This effect is observed only through financing instruments that generate spillovers onto commercial shareholders. The findings reveal the trade-offs of opening development finance to private actors and identify the conditions under which DFIs can fill the gap left when aid declines and global capital retreats.

We review the literature on the political economy of foreign aid, examining the geopolitical returns generated by Official Development Assistance (ODA). Our paper identifies under which conditions donors are able to influence political and economic outcomes in recipient countries, shape their behavior in global affairs, and adjust to domestic and international challenges. Building on an emerging body of research in international development finance, we propose future directions for the study of ODA in a contested global landscape.

Debt transparency is essential for managing sovereign debt, but it is often hindered by political and technical constraints. This paper introduces the Princeton-NYU Debt Transparency (PNDT) measure, a standardized index of debt transparency over time and across countries. The PNDT leverages missing data from the World Bank's Debtor Reporting System using a Bayesian item response theory model. Covering 113 countries from 1994 to 2022, the index is correlated with the domestic electoral cycle, openness, financial crises, and other international political dynamics. Debt transparency is not merely a matter of technical capacity but is also a political choice made by elected officials.