Book Chapter
Over-Arching Issues

This chapter, together with chs. 10 to 11, approaches the question of development funding in a theoretical way, rather than by examining individual proposals for sources. Chapter 2 itself deals with over‐arching issues and aims to set out a number of the common questions that arise in considering sources of new revenue for development finance. These concern the precise specification of the proposal, its relation with Official Development Assistance (ODA), and the administrative architecture. The key questions addressed in the different sections are: the role of the new sources; their fiscal architecture (flexibility in country involvement, institutional arrangements, fiscal federalism); the marginal cost of development funds (the leaky bucket argument) and the double dividend argument; the transfer problem (the possible effects of transfers on the economies of the donor and recipient countries); and the equivalent effects of different economic measures/policy instruments.