Should Countries Be More Like Shopping Malls? A Proposal for Service Performance Guarantees

20 Pages Posted: 7 May 2020

See all articles by Alan Gelb

Alan Gelb

Center for Global Development

Vijaya Ramachandran

Center for Global Development

Matthew Juden

University of London - School of Oriental and African Studies (SOAS)

Alice Rossignol

London School of Economics & Political Science (LSE) - London School of Economics

Date Written: July 2019

Abstract

Through an examination of existing guarantee mechanisms, this article sets out and explains a proposal for the adoption of Service Performance Guarantees (SPGs) by developing countries working to attract foreign investment. The proposed approach is to offer investing firms the opportunity to purchase insurance against a wider range of risks than is currently possible, with highly visible payouts if service delivery standards fall short of those expected from the programme. The SPG contracts would be covered by a “domestic reserve” funded from premiums paid in by the firms and backed up by a further guarantee issued by a development partner. This approach restructures accountability to create a partnership of donors and recipient governments, accountable to their investor clients.

Keywords: accountability, foreign direct investment (FDI), results‐based aid, service performance guarantee, special economic zone

Suggested Citation

Gelb, Alan and Ramachandran, Vijaya and Juden, Matthew and Rossignol, Alice, Should Countries Be More Like Shopping Malls? A Proposal for Service Performance Guarantees (July 2019). Development Policy Review, Vol. 37, Issue 4, pp. 526-545, 2019, Available at SSRN: https://ssrn.com/abstract=3594726 or http://dx.doi.org/10.1111/dpr.12369

Alan Gelb (Contact Author)

Center for Global Development ( email )

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Vijaya Ramachandran

Center for Global Development ( email )

2055 L St. NW
5th floor
Washington, DC 20036
United States

Matthew Juden

University of London - School of Oriental and African Studies (SOAS)

Thornhaugh Street
Russell Square: College Buildings 541
London, WC1H 0XG
United Kingdom

Alice Rossignol

London School of Economics & Political Science (LSE) - London School of Economics

United Kingdom

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