IDEAS home Printed from https://ideas.repec.org/p/cgd/wpaper/495.html

The Elusive Quest for Additionality

Author

Listed:
  • Patrick Carter

    (CDC Group)

  • Nicolas Van de Sijpe

    (Department of Economics, University of Sheffield)

  • Raphael Calel

    (McCourt School of Public Policy, Georgetown University)

Abstract

Development Finance Institutions (DFIs) are frequently asked to demonstrate their additionality—meaning that they make investments that the private sector would not—but what evidence of additionality would look like is rarely articulated. This paper examines potential quantitative and qualitative evidence. We investigate whether it is possible to infer additionality from observational investment data, and show how the demand-led nature of DFIs’ business model can create bias in standard statistical techniques used to identify causal effects. Having established that rigorous evidence of additionality may continue to elude us, we discuss circumstantial evidence that would increase confidence that additionality is present, and propose a probabilistic approach to additionality.

Suggested Citation

  • Patrick Carter & Nicolas Van de Sijpe & Raphael Calel, 2018. "The Elusive Quest for Additionality," Working Papers 495, Center for Global Development.
    • Handle: RePEc:cgd:wpaper:495
    as

    Download full text from publisher

    File URL: https://www.cgdev.org/publication/elusive-quest-for-additionality
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sacchetto, Camilla & Logan, Sarah & Collier, Paul & Kriticos, Sebastian, 2021. "Strengthening development finance in fragile contexts," LSE Research Online Documents on Economics 111560, London School of Economics and Political Science, LSE Library.
    2. McHugh, Christopher A., 2023. "Competitive conditions in development finance," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 83(C).
    3. Lea Marchal & Claire Naiditch & Betul Simsek, 2022. "How Foreign Aid Affects Migration: Quantifying Transmission Channels," EGEIWP 02-2022, Dipartimento di Economia e Finanza - Università degli Studi di Bari "Aldo Moro", revised Jan 2023.
    4. Swinkels, Laurens, 2024. "Trading carbon credit tokens on the blockchain," International Review of Economics & Finance, Elsevier, vol. 91(C), pages 720-733.
    5. Inderst, Georg, 2021. "Financing Development: Private Capital Mobilization and Institutional Investors," EconStor Preprints 232266, ZBW - Leibniz Information Centre for Economics.
    6. Léon, Florian, 2025. "Blended Binds: How DFI's support programs stifle bank lending in Africa," World Development, Elsevier, vol. 191(C).
    7. Filewod, Ben & McCarney, Geoff, 2023. "Avoiding leakage from nature-based offsets by design," LSE Research Online Documents on Economics 117927, London School of Economics and Political Science, LSE Library.
    8. Tanja Havemann & Christine Negra & Fred Werneck, 2020. "Blended finance for agriculture: exploring the constraints and possibilities of combining financial instruments for sustainable transitions," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 37(4), pages 1281-1292, December.
    9. Chiara Broccolini & Giulia Lotti & Alessandro Maffioli & Andrea F Presbitero & Rodolfo Stucchi, 2021. "Mobilization Effects of Multilateral Development Banks," The World Bank Economic Review, World Bank, vol. 35(2), pages 521-543.
    10. Arth Mishra, 2023. "The infrastructure catalyst: analysing the impact of development finance institutions on private infrastructure financing in developing countries," CSAE Working Paper Series 2023-13, Centre for the Study of African Economies, University of Oxford.
    11. Gurara, Daniel & Presbitero, Andrea & Sarmiento, Miguel, 2020. "Borrowing costs and the role of multilateral development banks: Evidence from cross-border syndicated bank lending," Journal of International Money and Finance, Elsevier, vol. 100(C).
    12. Kotchen, Matthew J. & Vogt, Andrew, 2025. "Is the emphasis on cofinancing good for environmental multilateral funds?," World Development, Elsevier, vol. 187(C).
    13. Küblböck, Karin & Grohs, Hannes, 2019. "Blended finance and its potential for development cooperation," Briefing Papers 21, Austrian Foundation for Development Research (ÖFSE).
    14. Briera, Thibault & Lefèvre, Julien, 2024. "Reducing the cost of capital through international climate finance to accelerate the renewable energy transition in developing countries," Energy Policy, Elsevier, vol. 188(C).
    15. Filewod, Ben & McCarney, Geoff, 2023. "Avoiding leakage from nature-based offsets by design," LSE Research Online Documents on Economics 117928, London School of Economics and Political Science, LSE Library.
    16. Trung V. Vu, 2022. "Does institutional quality foster economic complexity? The fundamental drivers of productive capabilities," Empirical Economics, Springer, vol. 63(3), pages 1571-1604, September.

    More about this item

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cgd:wpaper:495. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Publications Manager (email available below). General contact details of provider: https://edirc.repec.org/data/cgdevus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.