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Mobilizing Resources for Supporting Environmental Activities in Developing Countries: The Case of the GEF Trust Fund

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  • Miller, Sebastián J.
  • Yu, Bok-Keun

Abstract

Mobilizing sufficient resources is essential for supporting environmental activities in developing countries, and cofinancing is generally considered an important tool to help developing countries increase the resources they need. Moreover, cofinancing should increase ownership of projects by local authorities while improving accountability. The literature, however, has not explored why certain projects receive higher levels of cofinancing than others. This paper attempts to fill this gap by examining the cofinancing ratio and its determinants using projects financed by the GEF Trust Fund. The empirical results confirm that the rules of the fund, requiring different minimum cofinancing ratios by size and focal area of the GEF projects, do matter. Other important factors include funds' origins (foreign vs. domestic), types of cofinancing sources (reimbursable vs. nonreimbursable) and the particular GEF agencies involved.

Suggested Citation

  • Miller, Sebastián J. & Yu, Bok-Keun, 2012. "Mobilizing Resources for Supporting Environmental Activities in Developing Countries: The Case of the GEF Trust Fund," IDB Publications (Working Papers) 4091, Inter-American Development Bank.
    • Handle: RePEc:idb:brikps:4091
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    References listed on IDEAS

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    1. Pantelis Kalaitzidakis & Sarantis Kalyvitis, 2008. "On the Growth Implications of Foreign Aid for Public Investment Co‐Financing," Review of Development Economics, Wiley Blackwell, vol. 12(2), pages 354-371, May.
    2. Chatterjee, Santanu & Sakoulis, Georgios & Turnovsky, Stephen J., 2003. "Unilateral capital transfers, public investment, and economic growth," European Economic Review, Elsevier, vol. 47(6), pages 1077-1103, December.
    3. Gilles Nancy & Boriana Yontcheva, 2006. "Does NGO Aid Go to the Poor? Empirical Evidence from Europe," IMF Working Papers 2006/039, International Monetary Fund.
    4. Wezel, Torsten, 2004. "Does co-financing by multilateral development banks increase "risky" direct investment in emerging markets?," Discussion Paper Series 1: Economic Studies 2004,02, Deutsche Bundesbank.
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    Cited by:

    1. Matthew J Kotchen & Neeraj Kumar Negi, 2019. "Cofinancing in Environment and Development: Evidence from the Global Environment Facility," The World Bank Economic Review, World Bank, vol. 33(1), pages 41-62.
    2. Kotchen, Matthew J. & Vogt, Andrew, 2025. "Is the emphasis on cofinancing good for environmental multilateral funds?," World Development, Elsevier, vol. 187(C).
    3. Alice Iannantuoni & Charla Waeiss & Matthew S. Winters, 2021. "Project design decisions of egalitarian and non-egalitarian international organizations: Evidence from the Global Environment Facility and the World Bank," The Review of International Organizations, Springer, vol. 16(2), pages 431-462, April.
    4. Lu, Yangsiyu & Springer, Cecilia & Steffen, Bjarne, 2024. "Cofinancing and infrastructure project outcomes in Chinese lending and overseas development finance," World Development, Elsevier, vol. 175(C).

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    JEL classification:

    • F30 - International Economics - - International Finance - - - General
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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