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Infrastructure finance in developing countries—the potential of sub-sovereign bonds

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  • Daniel Platz

Abstract

This paper sets out to explore the potential of sub-sovereign bonds in financing infrastructure in developing countries. Taking into account the historical experience of the US, it develops a supply and demand side framework for analysis of the market for sub-sovereign bonded debt in developing countries and applies this framework to Mexico, India and South Africa. Finally, it draws lessons for countries seeking to promote markets for sub-sovereign bonds. Evidence suggests that the regulatory environment, a diversified financial sector and increased capacity for debt support and management matter most for the development of the sub-sovereign bond market.

Suggested Citation

  • Daniel Platz, 2009. "Infrastructure finance in developing countries—the potential of sub-sovereign bonds," Working Papers 76, United Nations, Department of Economics and Social Affairs.
    • Handle: RePEc:une:wpaper:76
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    File URL: http://www.un.org/esa/desa/papers/2009/wp76_2009.pdf
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    References listed on IDEAS

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    1. Shah, Anwar, 2004. "Fiscal decentralization in developing and transition economies: progress, problems, and the promise," Policy Research Working Paper Series 3282, The World Bank.
    2. David M. Cutler & Grant Miller, 2006. "Water, Water Everywhere. Municipal Finance and Water Supply in American Cities," NBER Chapters, in: Corruption and Reform: Lessons from America's Economic History, pages 153-183, National Bureau of Economic Research, Inc.
    3. Patricia Clarke Annez & George E. Peterson, 2007. "Financing Cities : Fiscal Responsibility and Urban Infrastructure in Brazil, China, India, Poland and South Africa," World Bank Publications - Books, The World Bank Group, number 6735, December.
    4. James Leigland & Cledan Mandri-Perrott, 2008. "Enhancing the Creditworthiness of Municipal Bonds : Innovations from Mexico," World Bank Publications - Reports 10598, The World Bank Group.
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    Citations

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    Cited by:

    1. Suk Hyun & Donghyun Park & Shu Tian, 2018. "Determinants of Public–Private Partnerships in Infrastructure in Asia: Implications for Capital Market Development," Working Papers id:12887, eSocialSciences.
    2. Hyun, Suk & Park, Donghyun & Tian, Shu, 2018. "Determinants of Public–Private Partnerships in Infrastructure in Asia: Implications for Capital Market Development," ADB Economics Working Paper Series 552, Asian Development Bank.
    3. Ortiz, Isabel, & Cummins, Matthew. & Karunanethy, Kalaivani., 2015. "Fiscal space for social protection and the SDGs options to expand social investments in 187 countries," ILO Working Papers 994877663402676, International Labour Organization.
    4. Paul Smoke, 2019. "Improving Subnational Government Development Finance in Emerging and Developing Economies: Towards a Strategic Approach," Working Papers id:13007, eSocialSciences.
    5. Liliana Bunescu, 2010. "Municipal Bonds. A Viable Funding Option For Oradea Local Public Administration (Romania)," Economic Analysis Working Papers (2002-2010). Atlantic Review of Economics (2011-2016), Colexio de Economistas de A Coruña, Spain and Fundación Una Galicia Moderna, vol. 9, pages 1-15, October.
    6. Ba, Lika & Gasmi, Farid & Noumba Um, Paul, 2010. "Is the level of financial sector development a key determinant of private investment in the power sector ?," Policy Research Working Paper Series 5373, The World Bank.
    7. Leonardo Romeo & Paul Smoke, 2014. "The Political Economy of Local Infrastructure Planning," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1417, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    8. Inderst, Georg & Stewart, Fiona, 2014. "Institutional Investment in Infrastructure in Emerging Markets and Developing Economies," MPRA Paper 62522, University Library of Munich, Germany.
    9. Elisa Van Waeyenberge & Hannah Bargawi, 2016. "Financing Economic Development. Theoretical Debates and Empirical Trends," Working papers wpaper139, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    10. Alfonso Mendoza-Velázquez & Heidi J. Smith & Diego Mendoza-Martínez, 2023. "Regional Growth, Debt Thresholds and Subnational Sustainability," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 18(2), pages 1-23, Abril - J.
    11. Smoke, Paul, 2019. "Improving Subnational Government Development Finance in Emerging and Developing Economies: Toward a Strategic Approach," ADBI Working Papers 921, Asian Development Bank Institute.
    12. Mawejje, Joseph & Munyambonera, Ezra, 2017. "Financing Infrastructure Development In Uganda," Research Series 253562, Economic Policy Research Centre (EPRC).

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    More about this item

    Keywords

    Sub-sovereign bonds; infrastructure finance; issuers; investors; financial sector; municipal finance;
    All these keywords.

    JEL classification:

    • H74 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Borrowing
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts

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