Influence of the soft state on the performance of development finance institutions.

Maynard, John E (1992) Influence of the soft state on the performance of development finance institutions. PhD thesis, Edinburgh Napier University.

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Development finance institutions put money into capital projects where conventional
intermediaries are reluctant to get involved, and/or where there is a political
preference for this channel of investment. In the last few decades D.F.l.s have
especially proliferated in developing countries. Unfortunately experience has been
disappointing. Most D.F .1.s have got into financial difficulties, and have not done
much for economic growth. A number of factors can be postulated as responsible for
this record. However, the concept of the 'soft' state as a causal factor has not been
applied in a structured manner to the problem. The following pages isolate 'soft' state
effects on D.F.1. experience via substantial Kenyan and Zimbabwean case studies.
The first part of the thesis is largely theoretical. The concept of the soft state is
discussed, and then a consideration of
(i) the place of financial intermediation in development,
(ii) the normative goals that often bias government policy and
(iii) the nature of financial systems in developing countries,
leads to a delineation of a role for development finance institutions.
The second part investigates the major 'general' D.F.1.s in Kenya and Zimbabwe in
order to test the deductions made and the hypothesis postulated in Part 1. As
necessary background to the D.F.1. analysis the history, the ideological bases, the
economics and the financial systems of the countries concerned are discussed. The
work on the D. F. 1. s themselves leads to some preliminary conclusions as to the effect
of the soft state on their operations.
The third part synthesises the material from the previous chapters, and draws some
conclusions as to how soft state features have affected the structures and work of
D.F.1.s in Kenya and Zimbabwe. A number of recommendations related to the role
and behaviour of D.F.1.s in developing countries are made at the end, and some
suggestions for further research.
There are three appendices after the final chapter. The first analyses the concept of
rent generation by and rent extraction from companies in developing countries and
the second formulates a rule as to when D.F.1.s should sell profitable investments.
The third looks briefly at some other developing country D.F.1.s.

Item Type: Thesis (PhD)
Additional Information: In collaboration with the University of Edinburgh and the Institute of Development Studies at the University of Sussex
Uncontrolled Keywords: Development Finance Institutions; soft state; economic growth; Kenya; Zimbabwe; financial investment;
University Divisions/Research Centres: The Business School > School of Management
Dewey Decimal Subjects: 300 Social sciences > 330 Economics > 332 Financial economics
Library of Congress Subjects: H Social Sciences > HG Finance
Item ID: 4488
Depositing User: Mrs Lyn Gibson
Date Deposited: 09 Jun 2011 11:29
Last Modified: 09 Jun 2011 11:29

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