VoxDev Development Economics
S4 Ep53: The role of evidence at development finance institutions
Dec 19, 2024
Chris Woodruff, a University of Oxford professor and non-executive director at British International Investment, shares insights on the intersection of research and investment. He highlights the challenges BII faces in promoting sustainable growth in emerging markets. The discussion dives into evidence-based strategies for businesses, using randomized control trials to address hurdles faced by micro and large enterprises. Woodruff also reevaluates the significance of external validity in investment decisions, advocating for a thorough understanding of general equilibrium effects to enhance DFI impact.
29:42
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Quick takeaways
- British International Investment leverages academic research on business growth constraints to inform impactful investment decisions in low-income countries.
- The podcast highlights the importance of understanding spillover effects and general equilibrium impacts to assess the true development impact of investments.
Deep dives
The Role of British International Investment (BII)
British International Investment (BII) is focused on fostering sustainable economic development in low-income countries, primarily in Africa and South Asia. As a development finance institution, BII aims to make impactful investments while achieving modest financial returns, enabling them to reinvest capital. The organization's unique structure, with a single shareholder in the UK government, allows for greater willingness to take risks that can lead to significant developmental outcomes. By predominantly investing in equity rather than debt, BII prioritizes investments with a higher potential for developmental impact, especially in underfunded sectors.
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