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Monday, 16 July 2018

Eco. 361 Assignment (Finance and Development)---- 14/7/2018

Critically discuss and analyse the relationship between Finance and Development and other aspects of Development Finance (including other financial aspects of development)
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ONWUMEREOBI IFEANYI VICTOR 2015/197776 said...

CHAPTER ONE
INTRODUCTION
Development had been a major topic that is reoccurring in every programme of the government and any other international organizations. Deliberations on how to ensure sustainable growth in the economic as well as equitable distribution of resources in the economy had been a major concern in the 20th and 21th century. Given the high level of poverty among the masses, the government and various nongovernmental organizations (NGOs) are endeavouring to bring out policies, efficient policies that will help in the eradication of poverty in the society as a whole. Development is about the all round wellbeing of the society both socially, academically, psychologically and health wise. However we cannot talk about development and neglect finance. This is because finances will be required for the purchase or establishment of facilities that will ensure the alleviation of poverty. The building of schools and other infrastructural facilities will require adequate funding. In order to ensure sustainable production and consumption in the economy, funds will be made available for potential investors with sound entrepreneurial ideas to borrow and invest at a very low interest rate. Effective development require finances even if the development project or programme is run by the government or a nongovernmental organization, therefore, this work will focus on the concept of finance with respect to development. By the end of this research work, we will understand the sources of government funds for developmental projects and the role of nongovernmental organization in development.

ONWUMEREOBI IFEANYI VICTOR 2015/197776 said...

MEANING OF FINANCE: Finance is a broad term that describes two related activities: the study of how money is managed and the actual process of acquiring needed funds. It encompasses the oversight, creation and study of money, banking, credit, investments, assets and liabilities that make up financial systems. Many of the basic concepts in finance come from micro and macroeconomic theories. One of the most fundamental theories is the time value of money, which essentially states that a dollar today is worth more than a dollar in the future. Since individuals, businesses and government entities all need funding to operate, the field is often separated into three main sub-categories: personal finance, corporate finance and public (government) finance.
Personal Finance: Financial planning generally involves analyzing an individual's or a family's current financial position, and formulating strategies for future needs within financial constraints. Personal finance is a very personal activity that depends largely on one's earnings, living requirements, goals and individual desires. For example, individuals need to save for retirement expenses, which mean investing enough money along the way to properly fund their long-term plans. This type of financial management decision falls under personal finance. Personal finance includes the purchasing of financial products, like credit cards, insurance, mortgages and various types of investments. Banking is also considered a part of personal finance, including checking and savings accounts as well as online or mobile payment services like PayPal and Venmo.
Corporate Finance: Corporate finance consists of the financial activities related to running a corporation, usually with a division or department set up to oversee the financial activities. For example, a large company may have to decide whether to raise additional funds through a bond issue or stock offering. Investment banks may advise the firm on such considerations and help them market the securities. Startups may receive capital from angel investors or venture capitalists in exchange for a percentage of ownership. If a company thrives and decides to go public, it will issue shares on a stock exchange in an initial public offering (IPO) to raise cash. Another instance could be a company that is trying to budget their capital and make decisions on what projects to finance and what projects to put on hold in order to grow the company. These types of decisions fall under corporate finance.
Public Finance: Public finance includes tax, spending, budgeting and debt issuance policies that all affect how a government pays for the services it provides to the public. The federal government helps prevent market failure by overseeing the allocation of resources, distribution of income and stabilization of the economy. Regular funding is secured mostly through taxation. Borrowing from banks, insurance companies and other governments also help finance the government. In addition to managing money for its day-to-day operations, a government body also has larger social responsibilities. Its goals include attaining an equitable distribution of income for its citizens and enacting policies that lead to a stable economy.

ONWUMEREOBI IFEANYI VICTOR 2015/197776 said...

MEANING OF DEVELOPMENT:
Development means “improvement in country’s economic and social conditions”. More specially, it refers to improvements in way of managing an area’s natural and human resources, in order to create wealth and improve people’s lives. Dudley Seers while elaborating on the meaning of development suggests that while there can be value judgements on what is development and what is not, it should be a universally acceptable aim of development to make for conditions that lead to a realization of the potentials of human personality. The capacity to obtain physical necessities, particularly food; A job (not necessarily paid employment) but including studying, working on a family farm or keeping house; Equality, which should be considered an objective in its own right; Participation in government; Belonging to a nation that is truly independent, both economically and politically; and Adequate educational levels (especially literacy).
GLOBAL AND DOMESTIC FACTS ON DEVELOPMENT
Financing for development is focused on new stakeholders in the financing of development cooperation. This is one of the most important UN approaches to supporting poor countries' financing of development and poverty reduction ­- a necessity when official development assistance is no longer sufficient. The world is moving forward in many different areas, but to achieve the Global Goals for Sustainable Development, which define a sustainable world free from extreme poverty, we must mobilize resources from many different sources other than traditional state aid. The concept of "Financing for Development" was first adopted at a UN conference in Mexico in 2002. Today's development financing is primarily concerned with the financing of the Global Goals for Sustainable Development in low-income countries. When working with these goals, development financing plays a far more important role than in the previous work on the Millennium Development Goals. Financing for development is one of the most important UN approaches to support poor countries' financing of their development and the fight against poverty. The idea is to identify and coordinate new actors that can contribute to development both financially and with their expertise and competence. In order to reach the enormous sums that are required for a truly sustainable development, both private and public capital flows, other than official development assistance, must be involved. We need to engage actors such as banks, insurance companies and private donors while also working to develop tax systems in developing countries, which in many ways represent a huge potential resource. Official development assistance (ODA) remains the basis for the financing of development cooperation with development financing as a supplement. Sweden is working for all rich countries to live up to the agreement to designate at least 0.7 per cent of their gross national income (GNI) to development cooperation. At present, only a few countries meet this goal, among them Sweden. When traditional aid is combined with development financing there is an increase in total resources and also the probability of eradicating poverty. In several countries, including Germany, the UK and the Netherlands, financing for development is gradually being integrated into development cooperation. The supranational organization OECD as well as private and philanthropic actors have also begun working with development financing. Sida has been working with a series of projects in this area since 2014.

ONWUMEREOBI IFEANYI VICTOR 2015/197776 said...

LINKAGE BETWEEN FINANCE AND DEVELOPMENT
The role of financial development in economic growth has received a lot of attention in both theoretical and empirical literature since one of the main goals of economic managers and planners is economic growth. One argument is that efficient financial sector results in savings mobilization which leads to investment with the resultant effect of economic growth, other things equal.
An efficient financial system provides an enabling environment for economic growth and development. Financial system is comprised of financial institutions and markets that play major role in promoting economic growth through various channels. This very aim is realized through the intermediary roles of both banking and non-banking financial institutions, which underlie strict policies that regulate and guide the operations of such institutions.
Financial innovation and intermediation enhance financial development mechanism. Financial intermediaries acquire fund in the form of deposits, premiums, financial claims etc., and transform the funds so acquired into assets that are attractive and preferred by the public. This way, financial intermediaries perform the economic functions of: (i) Providing maturity transformation, (ii) reduction of risk through diversification, (iii) cutting of cost of contracting as well as information processing, and (iv) provision of payment mechanism. The above economic functions propel financial development as funds are effectively transferred from net savers to the investors. Availability of investible funds thus stimulates economic growth by increasing the level of economic activities hence real output. Schumpeter (1911) argues that financial services provided by financial institutions are critical drivers of innovation and growth. The theoretical and empirical discourses on finance and economic growth nexus have emphasized importance of financial development as a critical factor in enhancing the amount of capital and therefore economic growth. However, the relevance of finance to growth has always been vigorously contentious. Traditional growth models, notably the neoclassical model developed by Solow (1956), have undermined the role of financial development. Solow’s growth model otherwise known as exogenous growth model was founded on the premise that technical progress is the key determinant of growth and is independent of funding or finance.

ONWUMEREOBI IFEANYI VICTOR 2015/197776 said...

CHAPTER THREE
GOVERNMENT FINANCING
Public finance is the branch of economics concerned with the income and expenditure of public authorities and its effect upon the economy in general. When the Classical Economists wrote upon the subject of public finance, they concentrated upon the income side, taxation. Since the Keynesian era of the 1930s, much more emphasis has been given to the expenditure side and the effect that fiscal policy has on the economy. The public sector is so large a part of most economies that it influences virtually every aspect of economic life, either through its own expenditure on goods and service provided by the private sector, its wage payments to public-sector employees, or its social security payments (pensions, sickness and unemployment benefits). Similarly, the financing of these expenditures by means of various taxes (income tax, value-added tax, corporation tax, etc.) affects the size and pattern of spending by individuals and businesses.
Governments plan their revenue and expenditure each fiscal year by preparing a budget (see budget ( government). They may plan to match their expenditure with their revenue, aiming for a balanced budget; or they may plan to spend less than they raise in taxation, running a budget surplus and using this surplus to repay former public debts (see national debt); or they may plan to spend more than they raise in taxation, running a budget deficit that has to be financed by borrowing. As well as serving as the instrument of government planning of its own economic and social commitments, the budget plays an integral role in the application of fiscal policy, specifically the operation of demand management policies to reduce unemployment and inflation.

ONWUMEREOBI IFEANYI VICTOR 2015/197776 said...

SOURCES OF GOVERNMENT FINANCE
1. Tax: A tax is a compulsory levy imposed by a public authority against which tax payers cannot claim anything. It is not imposed as a penalty for only legal offence. The essence of a tax, as distinguished from other charges by the government, is the absence of a direct quid pro quo (i.e., exchange of favour) between the tax payer and the public authority. Tax has three important features: It is a compulsory contribution, to the state from the citizen. Anyone refusing to pay tax is punished under law. Nobody can object to taxation on the ground that he is not getting the benefit of certain state services, and it is the personal obligation of the individual to pay taxes under all circumstances, finally, there is no direct relationship between benefit and tax payment.
2. Rates: Rates refer to local taxation, i.e., taxation levied by (or for) local rather than central government. Normally rates are proportional to the estimated rentable value of business and domestic properties. Rates are often criticised as being unrelated to income.
3. Fees: Fee is a payment to defray the cost of each recurring service undertaken by the government, primarily in the public interest.
4. Licence fee: A licence fee is paid in those instances in which the govern­ment authority is invoked simply to confer permission or a privilege.
5. Surplus of the public sector units: The government acts like a business- person and the public acts like its customers. The government may either sell goods or render services like train, city bus, electricity, transport, posts and telegraphs, water supply, etc. The government also earns revenue from the production of commodities like steel, oil, life-saving drugs, etc.
6. Fine and penalties: They are the charges imposed on persons as a punishment for contravention of a law. The main purpose of these is not to raise revenue from the public but to force them to follow law and order of the country.
7. Gifts and grants: Gifts are voluntary contribution from private individu­als or non-government donors to the government fund for specific purposes such as relief fund, defence fund during war or an emergency. However, this source provides a small portion of government revenue.
8. Printing of paper money: It is another source of revenue of the govern­ment. It is a method of creating extra resources. This method is normally avoided because if once this method of financing is started, it becomes difficult to stop it.
9. Borrowings: Borrowings from the public is another source of govern­ment revenue. It includes loans from the public in the form of deposits, bonds, etc. and also from the foreign agencies and organizations.

ONWUMEREOBI IFEANYI VICTOR 2015/197776 said...

DEVELOPMENT FINANCE IN NIGERIA
Development financing is one of the requirements for sustainable economic growth in any economy. The supply of finance to various sectors of the economy will promote the growth of the economy in a holistic manner and this, will make development, welfare improvement to proceed at a faster rate. The Central Bank of Nigeria development finance initiatives involve the formulation and implementation of various policies, innovation of appropriate products and creation of enabling environment for financial institutions to deliver services in an effective, efficient and sustainable manner. The initiatives are mainly targeted at agricultural sector, rural development and micro, small and medium enterprises.
SOURCES OF FINANCE FOR DEVELOPMENT
Most of the world's nations lack investment funds that could promote economic development – funds needed to build roads, schools, clinics and factories. As a result, their economies languish and their populations remain poor. In March 2002, the United Nations held an International Conference on Financing for Development to address this problem. The conference focused on six different sources for development funds - domestic resources (such as savings and taxation), foreign direct investment, international trade, international aid, debt relief, and finally systemic reforms. NGOs and others independent voices proposed alternative sources of financing, including especially global taxes and fees. The following shows various ways by which Nigerian government can source development funds.

ONWUMEREOBI IFEANYI VICTOR 2015/197776 said...

Global Taxes: Global taxes can address serious global problems while at the same time raising revenue for development. A tax on carbon emissions could help slow global climate change, while a tax on currency trading could dampen dangerous instability in the foreign exchange markets. The revenue from these taxes could support major programs to reduce poverty and hunger, ensure primary schooling for all children, and reverse the spread of HIV/AIDS, malaria and other major diseases. Unreliable donations from rich countries will not fill this need, estimated by the UN to cost tens of billions per year. A global system of revenue-raising must be put in place to fund genuinely international initiatives.
Foreign Direct Investment (FDI): Policies to attract investment such investment often associated with multinational corporations and these policies need to focus on having the right conditions in place, that is infrastructure, security, peace, local laws and regulation, government corruption scrutiny, freedom of the market, local labour supply, legal issues – protection for the investor, property rights, etc. Tax regime has been criticized as being a means by which MNCs can exploit poorer countries
Debt Relief: Debt has been choking the world's weakest economies and blocking economic progress for billions of the world's poorest people. Governments borrowed money in the past for development projects, but often corrupt leaders stole the proceeds. To pay off the interest and principal, governments have been forced by creditors to slash their social spending and shrink their public sector. Even so, the debt burden continues to grow, placing the poorest countries in a kind of debt bondage. Campaigns such as Jubilee 2000 have demanded debt forgiveness, and a few debts have been canceled, but still the debt burden grows larger. This page contains information on the debt crisis and proposals to solve it.
Domestic Financial Resources: Developing countries must mobilize domestic resources for development. National budgets contain potential for savings and redistribution. Governments can make additional resources available for sustainable development by reforming their tax systems and eliminating harmful subsidies and unproductive expenses. Of course, when dictators send billions to secret bank accounts, and when wealthy citizens send their savings overseas, they drain domestic financial resources, undermining the basis for development. This page posts articles on the challenges and opportunities of mobilizing domestic resources for development.

ONWUMEREOBI IFEANYI VICTOR 2015/197776 said...

CHAPTER FOUR
OTHER FINANCIAL ASPECTS OF DEVELOPMENT
(i) Legal origins, originally put forward by La Porta et al (1997)
(ii) Government ownership of banks, associated with La Porta et al (2002).
(iii) Initial endowments, polit ics and economic institutions (Acemoglu et al, 2001; Acemoglu et al, 2004).
(iv) Incumbents and openness
The Legal Origins
The legal origins puts forward the idea that common law based systems, are better suited than civil law based systems, for the development of capital markets. This is because civil law evolved to protect private property from the authority while common law was developed with the aim of addressing corruption of the judiciary and enhancing the powers of the state. Consequently, it is argued that capital markets developed faster in countries with common law systems than in those with civil law systems. The view that common-law countries have better shareholder protection than civil law countries has been challenged in an important recent study. At such finances are used to developed sound legal system that will eradicate all forms of inefficiency in the market systems. This aspect of financial development has to do with the establishment of sound institutional system that will ensure that the right of everyone is protected. Unlike the civil laws that seek to satisfy the objective of those in power, this aspects of financial development advocates the funding of projects that will look into the origins of different laws that coordinate the production, consumption, and distribution system in every economy, so as to ensure the equitable distribution of resources in the society. Broad-based property rights protection is critical for investors and, consequently, for financial development. It takes central role in the political economy which, however, places little if any emphasis on the origin of the legal system. We may therefore conclude that while there is a broad consensus that a properly functioning legal system that provides effective protection for investors‟ property rights is important for financial development (and growth), the legal origins view is not widely accepted, indeed it has been largely discredited by lawyers.

ONWUMEREOBI IFEANYI VICTOR 2015/197776 said...

Initial Endowments, Politics and Economic Institutions
These contributions, acknowledge the importance of strong institutions for economic growth, but do not focus on financial development per se. They ascribe institutional quality differences to varying initial endowments and dynamic political economy factors.
The initial endowment hypothesis suggests that the disease environment encountered by a country can be a major obstacle for the establishment of institutions that would promote long run prosperity. Thus, it is argued that European colonial powers established extractive institutions that are unsuitable for long-term growth where the environment was unfavourable and institutions that were better suited for growth where they encountered favourable environments. The economic institutions hypothesis addresses the main shortcoming of the endowment hypothesis, by proposing a dynamic political economy framework in which differences in economic institutions are the fundamental causes of differences in economic development. Economic institutions, which determine the incentives and constraints of economic agents, are social decisions that are chosen for their consequences. Political institutions and income distribution are the dynamic forces that combine to shape economic institutions and outcomes. It is argued that growth promoting economic institutions emerge when political institutions (a) allocate power to groups with interests in broad based property rights enforcement, (b) create effective constraints on power holders and (c) when there are few rents to be captured by power holders.

ONWUMEREOBI IFEANYI VICTOR 2015/197776 said...

Incumbents and Openness
The incumbents and openness hypothesis, as formulated by Rajan and Zingales (2003), postulates that interest groups, specifically industrial and financial incumbents, frequently stand to lose from financial development, because it usually breeds competition, which erodes their rents. They argue that incumbents‟ opposition will be weaker when an economy is open to both trade and capital flows, hence the opening of both the trade and capital accounts holds the key to successful financial development. This is not only because trade and financial openness limit the ability of incumbents to block the development of financial markets but also because the new opportunities created by openness may generate sufficient new profits for them that outweigh the negative effects of increased competition.
This hypothesis has attracted considerable attention in the academic and policy making community but there has been little evidence to suggest it is relevant to developing countries today. This question can be addressed using four annual panel datasets and dynamic panel data estimation procedures. Its main finding is that trade and financial openness - as well as economic institutions - are statistically important determinants of the variation in financial development across countries and over time since the 1980s. However, there is mixed support for the hypothesis that the simultaneous opening of both trade and capital accounts is necessary to promote financial development in a contemporary setting. There is good news for policy makers in low income countries that are relatively closed, since opening up their trade and/or capital accounts may provide an effective stimulus to financial development (e.g. Bangladesh, Ghana, India and Pakistan). At the other end of the spectrum, however, low income countries that are already very open, such as Malawi, Senegal, Togo and Zambia, need to focus on improving their institutional infrastructure in order to grow their financial systems, while financial openness offers greater scope for advancing financial development than trade openness. This analysis also suggests that additional trade openness is unlikely to deliver any stimulus to banking sector development in any country but may well help to boost the development of capital markets in a few countries, particularly those that do not have very open capital accounts, such as Bangladesh, India, Mexico, Zimbabwe and Pakistan. To conclude, trade and financial openness appear to be statistically significant determinants of financial development across countries and over time. However, additional openness offers little, if any, scope for delivering gains in terms of greater financial development in developing countries that are already relatively open.
Government Ownership of Banks
The “political view” of state-owned banks suggests that government ownership of banks is widespread because it is in the interests of politicians, since it enables them to direct credit and favours, such as employment and subsidies, to political supporters. This, in turn, enables corrupt politicians to attract votes, political contributions and bribes, fuelling a vicious cycle of bad economic decisions and re-election of corrupt politicians. This cycle clearly undermines economic growth, not least because credit is channelled to sectors and firms in accordance to political rather than economic priorities. It is also argued that government-owned banks are less innovative and less efficient – plagued by incompetent and unmotivated employees - than private banks, hence they are typically less able to promote financial development as effectively as private banks.

ONWUMEREOBI IFEANYI VICTOR 2015/197776 said...

CHAPTER FIVE
NON GOVERNMENTAL ORGANIZATIONS
Non-governmental organizations, commonly referred to as NGOs, are usually non-profit and sometimes international organizations independent of governments and international governmental organizations (though often funded by governments) that are active in humanitarian, educational, health care, public policy, social, human rights, environmental, and other areas to effect changes according to their objectives. They are thus a subgroup of all organizations founded by citizens, which include clubs and other associations that provide services, benefits, and premises only to members. Sometimes the term is used as a synonym of "civil society organization" to refer to any association founded by citizens, but this is not how the term is normally used in the media or everyday language, as recorded by major dictionaries. The explanation of the term by NGO.org (the non-governmental organizations associated with the United Nations) is ambivalent. It first says an NGO is any non-profit, voluntary citizens' group which is organized on a local, national or international level, but then goes on to restrict the meaning in the sense used by most English speakers and the media: Task-oriented and driven by people with a common interest, NGOs perform a variety of service and humanitarian functions, bring citizen concerns to Governments, advocate and monitor policies and encourage political participation through provision of information. NGOs are usually funded by donations, but some avoid formal funding altogether and are run primarily by volunteers. NGOs are highly diverse groups of organizations engaged in a wide range of activities, and take different forms in different parts of the world. Some may have charitable status, while others may be registered for tax exemption based on recognition of social purposes. Others may be fronts for political, religious, or other interests. Since the end of World War II, NGOs have had an increasing role in international development, particularly in the fields of humanitarian assistance and poverty alleviation.

ONWUMEREOBI IFEANYI VICTOR 2015/197776 said...

The number of NGOs worldwide is estimated to be 10 million. Russia had about 277,000 NGOs in 2008. India is estimated to have had around 2 million NGOs in 2009, just over one NGO per 600 Indians, and many times the number of primary schools and primary health centres in India. China is estimated to have approximately 440,000 officially registered NGOs. About 1.5 million domestic and foreign NGOs operated in the United States in 2017. The term 'NGO' is not always used consistently. In some countries the term NGO is applied to an organization that in another country would be called an NPO (non-profit organization), and vice versa. Political parties and trade unions are considered NGOs only in some countries. There are many different classifications of NGO in use. The most common focus is on "orientation" and "level of operation". An NGO's orientation refers to the type of activities it takes on. These activities might include human rights, environmental, improving health, or development work. An NGO's level of operation indicates the scale at which an organization works, such as local, regional, national, or international. The term "non-governmental organization" was first coined in 1945, when the United Nations (UN) was created. The UN, itself an intergovernmental organization, made it possible for certain approved specialized international non-state agencies — i.e., non-governmental organizations — to be awarded observer status at its assemblies and some of its meetings. Later the term became used more widely. Today, according to the UN, any kind of private organization that is independent from government control can be termed an "NGO", provided it is not-for-profit, non-prevention,[clarification needed] but not simply an opposition political party. One characteristic these diverse organizations share is that their non-profit status means they are not hindered by short-term financial objectives. Accordingly, they are able to devote themselves to issues which occur across longer time horizons, such as climate change, malaria prevention, or a global ban on landmines. Public surveys reveal that NGOs often enjoy a high degree of public trust, which can make them a useful - but not always sufficient - proxy for the concerns of society and stakeholders.

ONWUMEREOBI IFEANYI VICTOR 2015/197776 said...

IMPACT OF NGOS IN DEVELOPMENT
The essence of nongovernmental organizations remains the same: to provide basic services to those who need them. Many NGOs have demonstrated an ability to reach poor people, work in inaccessible areas, innovate, or in other ways achieve things better than by official agencies. Many NGOs have close links with poor communities. Some are membership organizations of poor or vulnerable people; others are skilled at participatory approaches. Their resources are largely additional; they complement the development effort of others, and they can help to make the development process more accountable, transparent and participatory. They not only "fill in the gaps" but they also act as a response to failures in the public and private sectors in providing basic services. Mirroring the support given to northern NGOs, official funding of southern NGOs has taken two forms: the funding of initiatives put forward by southern NGOs, and the utilization of the services of southern NGOs to help donors achieve their own aid objectives. Donor funding of southern NGOs has received a mixed reception from recipient governments. Clear hostility from many non-democratic regimes has been part of more general opposition to any initiatives to support organizations beyond the control of the state. But even in democratic countries, governments have often resisted moves seen as diverting significant amounts of official aid to non-state controlled initiatives, especially where NGO projects have not been integrated with particular line ministry programs. The common ground between donors and NGOs can be expected to grow, especially as donors seek to make more explicit their stated objectives of enhancing democratic processes and strengthening marginal groups in civil society. However, and in spite of a likely expansion and deepening of the reverse agenda, NGOs are likely to maintain their wariness of too close and extensive an alignment with donors.

ONWUMEREOBI IFEANYI VICTOR 2015/197776 said...

Interactions with Formal Private Sector
NGOs vary greatly in the extent to which they ensure beneficiary participation within their own programs. At one extreme are NGOs whose orientation and competence are very similar to the private sector firms with whom they compete for contracts in project implementation or service delivery. The nonprofit sector as a whole competes with the for-profit sector for skilled labor, sales, and reduced cost services provision (Steinberg, 1987). Such NGOs may be very efficient (and in strong demand) as service deliverers but are oriented to meeting the requirements of bureaucratic funding agencies and are unlikely to use participatory processes. At the other extreme are participatory NGOs which see themselves exclusively as enablers and capacity builders and refuse to compromise their objectives or independence by collaborating in official programs. These NGOs usually do not interact much with the formal private sector.
There is a lot of mutual distrust and misunderstandings between these two sectors. Often they both see only negative sides of another party existence. The formal private sector considers NGOs shallow and irresponsible, while the informal private sector often looks at for-profit organizations as greedy and selfish entities.
Interactions with the State
As it is mentioned already, one of the fundamental reasons that NGOs have received so much attention of late is that they are perceived to be able to do something that national governments cannot or will not do. However, it is important to recognize that relations between NGOs and governments vary drastically from region to region and country to country. For example, NGOs in India derive much support and encouragement from their government and tend to work in close collaboration with it. NGOs from Africa also acknowledged the frequent need to work closely with their government or at least avoid antagonizing the authorities. Most NGOs from Latin America offered a much different perspective: NGOs and other grassroots organizations as an opposition to government. In the Third World, the difficult economic situation may force governments to yield to pressure from multilateral agencies to give money to NGOs. In these cases, the governments act as conduits of funds but is some cases try to maintain control over these NGOs precisely because of their access to funds. However, it was also recognized that through the multilateral donors, NGO cooperation and solidarity can influence policy at the national levels. Multilateral donors may serve as a kind of "buffer" between government and NGOs in order to avoid unnecessary current tensions and to promote coherent national development strategies.

ONWUMEREOBI IFEANYI VICTOR 2015/197776 said...

A Healthy State-NGO Relationship: A healthy relationship is only conceivable when both parties share common objectives. If the government’s commitment to improving of the provision of urban services is weak, NGOs will find dialogue and collaboration frustrating or even counter-productive. Likewise, repressive governments will be wary of NGOs which represent the poor or victimized. Where government has a positive social agenda (or even where individual ministries do) and where NGOs are effective, there is the potential for a strong, collaborative relationship. This does not mean the sub-contracting of placid NGOs, but a "genuine partnership between NGOs and the government to work on a problem facing the country or a region... based on mutual respect, acceptance of autonomy, independence, and pluralism of NGO opinions and positions."
However, as Tandon points out, such relations are rare, even when the conditions are met. The mutual distrust and jealousy appears to be deep-rooted. Governments fear that NGOs erode their political power or even threaten national security. And NGOs mistrust the motivation of the government and its officials. Though controversial and risky, many of the more strategic NGOs are overcoming their inhibitions and are seeking closer collaboration with governments. However, with closer collaboration comes increased risk of corruption, reduced independence, and financial dependency.
Fostering an Enabling Environment
The State has various instruments it can use, for good or ill, to influence the health of the NGO sector (Brown 1990). The level of response can be non-interventionist, active encouragement, partnership, co-option or control. For individual NGOs, the most favorable policy setting is when legal restrictions are minimized, when they have complete freedom to receive funds from whomsoever they choose, to speak out as they wish and to associate freely with whoever they select. In such a setting, the NGO sector is likely to grow most rapidly, but "bigger" does not necessarily mean "better." Loose regulations and reporting open the door for unhealthy and even corrupt NGO activities which may taint the sector as a whole. Where the expansion of the sector has been most rapid (e.g. South Asia and certain African countries) there is considerable concern about the rapid ascension of "bogus" NGOs - NGOs which serve their own interest rather than those of vulnerable groups. The individual NGOs may be healthy, but collectively there may be insufficient coordination, duplication of effort, and important gaps left unaddressed.

ONWUMEREOBI IFEANYI VICTOR 2015/197776 said...

REFERENCES
Andrianova, S., Demetriades, P. and Xu, C. (2008) “Political Economy Origins of Financial Development in Europe and Asia”, World Economy and Finance WorkingPaper WEF0034
Caporale, G.M., Rault, C., Sova, R., Sova, A. (2009), Financial Development and Economic Growth: Evidence from Ten New EU Members. Discussion Papers (940), 1-43. Berlin, October, 2009.
Haber, S., (forthcoming), Why Institutions Matter: Banking and Economic Growth in Mexico, 1821-2004”, in Welna, C. (ed.) Reforming the State of Mexico, University of Notre Dame Press, forthcoming.
Investopedia Inc. (2017) What is Finance https://www.investopedia.com/ask/answers/what-is- finance/#ixzz5KvrkDa3
Sociology Discussion (2017) Development: meaning and concept of development http://www.sociologydiscussion.com/society/development-meaning-and-concept-of- development/688
Springer Inc (2018) Relationship between Financial Development and Economic Growth in Nigeria: https://link.springer.com/chapter/10.1007/978-3-642-27711-5_15
Wikipedia Inc. (2018) Non-governmental Organization https://en.wikipedia.org/wiki/Non- governmental_organization

Ihunyere victorious ifeoma 2015/200357. Economics Education said...

NAME: Ihunyere victorious ifeoma
DEPT: Economics education
REG No: 2015/200357
BLOG ADDRESS: vickyihunyere@blogspot.com


















CHAPTER 1
INTRODUCTION
Finance is a broad term that describes two related activities: the study of how money is managed and the actual process of acquiring needed funds. It encompasses the oversight, creation and study of money, banking, credit, investments, assets and liabilities that make up financial systems.
Public finance includes tax, spending, budgeting and debt issuance policies that all affect how a government pays for the services it provides to the public. The federal government helps prevent market failure by overseeing the allocation of resources, distribution of income and stabilization of the economy. Regular funding is secured mostly through taxation. Borrowing from banks, insurance companies and other governments also help finance the government. In addition to managing money for its day-to-day operations, a government body also has larger social responsibilities. Its goals include attaining an equitable distribution of income for its citizens and enacting policies that lead to a stable economy. Global finance refers to the financial system consisting of regulators and various financial institutions that conduct their business on an international level.
As a result of this definition, global finance does not constitute any financial businesses or regulators that act on a national or regional level. The primary components of global finance are the enormous international institutions, such as the bank for International Settlements or the International monetary Fund, as well as various national agencies and government departments, such as various central banks, finance ministries, and those private companies who act on a global scale.
Prominent International Institutions aligned with Global Finance
The International Monetary Fund is a financial institution that is responsible for maintaining the international balance of payments accounts of its member states. The International Monetary Fund may also act as a lender (typically in last resort situations) for state members who are in financial distress due to currency crises or struggles that revolve around meeting the balance of payment when debt default is present. Membership in the International Monetary Fund is based on quota or the amount of funding a member state (country) provides to the fund. The evaluation of funding is based on a relative investigation of the member state’s role in the international trading system and global finance in general.
Another prominent member of global finance is the World Bank, which is an institution who aims to offer funding for development projects that, for the most part, reside in developing nations. The World Bank assumes the credit risk of these developing nations; the World Bank will provide financing to projects that otherwise would not be able to access such funding.
The World Trade Organization is another principle player aligned with global finance. The World Trade Organization is responsible for settling disputes and negotiating international trade agreements with various international companies, institutions or government agencies.

Ihunyere victorious ifeoma 2015/200357. Economics Education said...

Domestic Finance
This advises and assists in areas of domestic finance, banking, and other related economic matters. It develops policies and guidance for Treasury Department activities in the areas of financial institutions, federal debt finance, financial regulation, and capital markets.
Meaning of development
Development means an increase in the size or pace of the economy such that more products and services are produced. Conventionally, a common assumption has been that, if an economy generates more products and services, then humans will enjoy a higher standard of living. The aim of many conventional approaches to development has been to increase the size of the economy (economic growth) in order to increase the output of products and services. Of course, without any change in the fundamental economic processes involved, the production of more products and services will inevitably require more raw materials and energy, and will generate more waste.
Global development lacks a clear definition, but it is often linked with human development and international efforts to reduce poverty and inequality and improve health, education and job opportunities around the world. A variety of data can be used to describe what is also often referred to as international development, including a country’s gross domestic product or its average per-capita income, literacy and maternal survival rates, as well as life expectancy, human rights and political freedoms. While humanitarian aid and disaster relief are meant to provide short-term fixes to emergencies, international development is meant to be long-term and sustainable. For years, global development was driven by the United States and other industrialized countries in Europe and beyond. Now, we may be on the verge of a transformative change – the transition to a multipolar world economic order. That’s what two World Bank economists suggest. By 2025, they predict, six emerging economies — Brazil, China, India, Indonesia, South Korea, and Russia — will collectively account for about half of global growth. This shift will have wide-ranging consequences on the international monetary system, North-South relations, and security and stability around the globe. Already, many developing countries appear to be recovering better from recent global financial and economic turmoil. Foreign investment in Africa has surpassed foreign aid to the continent. People in the Middle East and elsewhere are demanding political reforms to boost the economy and availability of jobs. As emerging economies grow, so will their private sector companies’ influence on global business, and it may become necessary to rethink global economic governance structures through multilateral channels such as the World Trade Organization, International Monetary Fund and other Bretton Woods institutions. Financial, monetary and trade policy reforms may be needed to ensure sustainable growth.
Domestic economic development is an increase in the capacity of an economy to produce goods and services, compared from one period of time to another. It can be measured in nominal or real terms, the latter of which is adjusted for inflation. Traditionally, aggregate economic growth is measured in terms of gross national product (GNP) or gross domestic product (GDP), although alternative metrics are sometimes used .In simplest terms, economic development refers to an increase in aggregate productivity. Often, but not necessarily, aggregate gains in productivity correlate with increased average marginal productivity. This means the average laborer in a given economy becomes, on average, more productive. It is also possible to achieve aggregate economic growth without an increased average marginal productivity through extra immigration or higher birth rates. Economic growth has a ripple effect. By expanding the economy, businesses start to see a surge in profits, which means stock prices also see growth.

Ihunyere victorious ifeoma 2015/200357. Economics Education said...

CHAPTER 2
DEVELOPMENT FINANCE
Development finance is the efforts of local communities to support, encourage and catalyze expansion through public and private investment in physical development, redevelopment and/or business and industry. It is the act of contributing to a project or deal that causes that project or deal to materialize in a manner that benefits the long-term health of the community. Development finance requires programs and solutions to challenges that the local business, industry, real estate and environment creates. As examples, we need unique financing approaches to address environmentally contaminated land and specific solutions to unlocking capital access in underserved markets and industries. Each of the problems that we seek to solve in development require unique and targeted solutions.
There are dozens of terms within the development finance industry including debt, equity, loans, bonds, credits, liabilities, remediation, guarantees, collateral, credit enhancement, venture/seed capital, angels, short-term, long-term, incentives, and gap financing. Ultimately, development finance aims to establish proactive approaches that leverage public resources to solve the needs of business, industry, developers and investors. The easiest way to understand the depth and breadth of development finance is to compartmentalize tools into basic categories.
Government projects are exactly what they sound like – roads, bridges, sewers, water facilities, schools, airports, docks, parking garages, broadband, utilities, etc.
Established industry represents our industrial, office and retail sectors (depending on location). Examples such as industrial parks, manufacturing, tech/research hubs and commercial retail centers fall within this category.
Development and redevelopment consists of the projects that require major public resource commitments to catalyze new private sector development. We see this throughout the country with urban revitalization, rural rejuvenation, adaptive reuse, brownfield development and other transformative projects that require significant public capital.
Small Business and Micro-Enterprises are pretty self-explanatory as well. These projects represent our economic engine locally. Generally, a small business is defined as any company with less than 500 employees and a micro-enterprise is any company with fewer than five employees. There are approximately 30 million micro-enterprises in the U.S.
Entrepreneurs represents our future businesses. These are one-two person companies that are working through the early stages of the business life cycle. Typically, entrepreneurs are not ready for traditional financing and need a unique approach to help them find the working capital needed to expand and grow.
Methods of development finance
Taxation
Both direct and indirect taxes have to be levied to increase the State resources. Taxes restrict domestic consumption and increase savings. It is best to impose taxes on luxury consumption and on non-entrepreneurial incomes. In backward countries, it is essential to levy indirect taxes on commodities of mass consumption. Agricultural taxes are also necessary. But care has to be taken that taxes do not weaken incentives to work, save and invest.

Ihunyere victorious ifeoma 2015/200357. Economics Education said...

Government Borrowing:
The savings of the people can be mobilized by means of public loans. But the private sector competes with the government in this matter. To ensure success of the government borrowing, it is essential to establish and extend financial institutions in rural areas. It is also necessary to check unproductive investment, such as that in real estate and jewellery.
Foreign Capital:
Foreign aid is also essential. But it must be without ‘strings’, i.e., the independence of the country must not be endangered. Foreign loans nowadays come from governments and international financial institutions like the World Bank and International Development Association.
Profits of Government Undertakings:
In course of time, government undertakings yield profit and help in financing further development. But if they are to yield surpluses, they must be run efficiently.
Deficit Financing:
This is also an important source. This is ‘created’ money. Care has to be taken to keep it within limits otherwise it may lead to dangerous inflation. India has made use of all these methods in financing her Five-Year Plans. Since deficit financing is an important and Controversial means of economic

SOURCES OF DEVELOPMENT FINANCING
Long-Term Sources of Finance
Long-term financing means capital requirements for a period of more than 5 years to 10, 15, and 20 years or maybe more depending on other factors. Capital expenditures in fixed assets like plant and machinery, land and building etc. of a business are funded using long-term sources of finance. Part of working capital which permanently stays with the business is also financed with long-term sources of funds. Long-term financing sources can be in form of any of them:
Share Capital or Equity Shares
Preference Capital or Preference Shares
Retained Earnings or Internal Accruals
Debenture / Bonds
Term Loans from Financial Institutes, Government, and Commercial Banks
Venture Funding
Asset Securitization
International Financing by way of Euro Issue, Foreign Currency Loans, ADR, GDR etc.
Medium Term Sources of Finance
Medium term financing means financing for a period of 3 to 5 years and is used generally for two reasons. One, when long-term capital is not available for the time being and second when deferred revenue expenditures like advertisements are made which are to be written off over a period of 3 to 5 years. Medium term financing sources can in the form of one of them:
Preference Capital or Preference Shares
Debenture / Bonds
Medium Term Loans from
Financial Institutes
Government, and
Commercial Banks
Lease Finance
Hire Purchase Finance
Short Term Sources of Finance
Short term financing means financing for a period of less than 1 year. The need for short-term finance arises to finance the current assets of a business like an inventory of raw material and finished goods, debtors, minimum cash and bank balance etc. Short-term financing is also named as working capital financing. Short term finances are available in the form of:
Trade Credit
Short Term Loans like Working Capital Loans from Commercial Banks
Fixed Deposits for a period of 1 year or less
Advances received from customers
Creditors
Payables
Factoring Services
Bill Discounting etc.

Ihunyere victorious ifeoma 2015/200357. Economics Education said...

Other financial aspects of developments
Finance and Financial Intermediaries: Self-Finance, Direct Finance, and Indirect Finance. Expenditure is self-financed by spending units with balanced budgets. Their consumption is financed from income, their investment from internal savings. If their financial assets and debt do change, the changes are equal. Self-finance continues to be important in the most sophisticated economic system, say in the form of investment out of retained corporate earnings. But over the very long term, the trend has been away from self-finance. Government, business, and consumers alike have come to lean more heavily on external finance. External finance may take either of two forms, direct finance or in- direct finance. Direct finance involves borrowing by deficit spending units from surplus spending units. The former issue debt of their own, direct debt. The latter buy and hold financial assets in the form of these direct securities. If spending on capital formation is directly financed, debt tends to accumulate pari passu with wealth. Economic development is retarded if only self-finance and direct
Debt to finance exhaustive spending is sometimes called "dead-weight" debt. We have avoided this term because it suggests, improperly in our view, that such debt is necessarily obstructive in the growth process in contrast with debt that finances expansion of productive capacity. Finances are accessible, if financial intermediaries do not evolve. The primary function of intermediaries is to issue debt of their own, indirect debt, in soliciting loanable funds from surplus spending units, and to allocate these loanable funds among deficit units whose direct debt they absorb. When intermediaries intervene in the flow of loanable funds, the accumulation of financial assets by surplus spending units continues to equal the accumulation of debt by deficit units. The rise of intermediaries-of institutional savers and investors-does not affect at all the basic equalities in a complete social accounting system between budgetary deficits and surpluses, purchases and sales of loanable funds, or accumulation of financial assets and debt. But total debt, including both the direct debt that intermediaries buy and the indirect debt of their own that they issue, rises at a faster pace relative to income and wealth than when finance is either direct or arranged internally. Institutionalization of saving and investment quickens the growth rate of debt relative to the growth rates of income and wealth.
Commercial Banks and Competitive Intermediaries. A monetary system, and especially its commercial banking component, has commonly been the first significant financial intermediary to complicate the simplicity of self-finance and direct finance. Even as late as a half- century ago in this country, the commercial banks offered the predominant escape from self-finance and direct finance. The role of the banks has been, first, to borrow loanable funds from spending units with surpluses, issuing indirect securities in exchange. These securities have been the currency and deposits that spending




Ihunyere victorious ifeoma 2015/200357. Economics Education said...

CHAPTER 3
PUBLIC FINANCE
Public finance is closely connected to issues of income distribution and social equity. Governments can reallocate income through transfer payments or by designing tax systems that treat high-income and low-income households differently. Collection of sufficient resources from the economy in an appropriate manner along with allocating and use of these resources efficiently and effectively constitute good financial management. Resource generation, resource allocation and expenditure management (resource utilization) are the essential components of a public financial management system.
The following subdivisions form the subject matter of public finance.
1. Public expenditure
2. Public revenue
3. Public debt
4. Financial administration
5. Federal finance
Government expenditures
Economists classify government expenditures into three main types. Government purchases of goods and services for current use are classed as government consumption. Government purchases of goods and services intended to create future benefits – such as infrastructure investment or research spending – are classed as government investment. Government expenditures that are not purchases of goods and services, and instead just represent transfers of money – such as social security payments – are called transfer payments .
Government operations
Government operations are those activities involved in the running of a state or a functional equivalent of a state (for example, tribes, secessionist movements or revolutionary movements) for the purpose of producing value for the citizens. Government operations have the power to make, and the authority to enforce rules and laws within a civil, corporate, religious, academic, or other organization or group.
Income distribution
Some forms of government expenditure are specifically intended to transfer income from some groups to others. For example, governments sometimes transfer income to people that have suffered a loss due to natural disaster. Likewise, public pension programs transfer wealth from the young to the old. Other forms of government expenditure which represent purchases of goods and services also have the effect of changing the income distribution. For example, engaging in a war may transfer wealth to certain sectors of society. Public education transfers wealth to families with children in these schools. Public road construction transfers wealth from people that do not use the roads to those people that do (and to those that build the roads).

Ihunyere victorious ifeoma 2015/200357. Economics Education said...

Sources of public finance
Taxation is the central part of modern public finance. Its significance arises not only from the fact that it is by far the most important of all revenues but also because of the gravity of the problems created by the present day tax burden. The main objective of taxation is raising revenue. A high level of taxation is necessary in a welfare State to fulfill its obligations. Taxation is used as an instrument of attaining certain social objectives i.e. as a means of redistribution of wealth and thereby reducing inequalities. Taxation in a modern Government is thus needed not merely to raise the revenue required to meet its ever-growing expenditure on administration and social services but also to reduce the inequalities of income and wealth. Taxation is also needed to draw away money that would otherwise go into consumption and cause inflation to rise.
A tax is a financial charge or other levy imposed on an individual or a legal entity by a state or a functional equivalent of a state (for example, tribes, secessionist movements or revolutionary movements). Taxes could also be imposed by a subnational entity. Taxes consist of direct tax or indirect tax, and may be paid in money or as corvée labor. A tax may be defined as a "pecuniary burden laid upon individuals or property to support the government by a payment exacted by legislative authority." A tax "is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority" and is "any contribution imposed by government whether under the name of toll, tribute, tallage, gabel, impost, duty, custom, excise, subsidy, aid, supply, or other name."
There are various types of taxes, broadly divided into two heads – direct (which is proportional) and indirect tax (which is differential in nature):
Stamp duty, levied on documents
Excise tax (tax levied on production for sale, or sale, of a certain good)
Sales tax (tax on business transactions, especially the sale of goods and services )
Value added tax (VAT) is a type of sales tax
Services taxes on specific services














Ihunyere victorious ifeoma 2015/200357. Economics Education said...

CHAPTER 4
Non government organizations
A non-governmental organization (NGO) is a non-profit, citizen-based group that functions independently of government. NGOs, sometimes called civil societies, are organized on community, national and international levels to serve specific social or political purposes, and are cooperative, rather than commercial, in nature.
Two broad groups of NGOs are identified by the World Bank:
Operational NGOs, which focus on development projects.
Advocacy NGOs, which are organized to promote particular causes.
Certain NGOs may fall under both categories simultaneously.
Examples of NGOs include those that support human rights, advocate for improved health or encourage political participation.
While the term "NGO" has various interpretations, it is generally accepted to include private organizations that operate without government control and that are non-profit and non-criminal. Other definitions further clarify NGOs as associations that are non-religious and non-military.
Some NGOs rely primarily on volunteers, while others support a paid staff.
How NGOs are funded
As non-profits, NGOs rely on a variety of sources for funding, including:
Membership dues
Private donations
The sale of goods and services
Grants
Despite their independence from government, some NGOs rely significantly on government funding. Large NGOs may have budgets in the millions or billions of dollars.
Types of NGOs
A number of NGO variations exist, including:
BINGO: business-friendly international NGO (example: Red Cross)
ENGO: environmental NGO (Greenpeace and World Wildlife Fund)
GONGO: government-organized non-governmental organization (International Union for Conservation of Nature)
INGO: international NGO (Oxfam)
QUANGO: quasi-autonomous NGO (International Organization for Standardization [ISO])
Roles of non-government organizations
Some of the roles of NGOs include;
Development and Operation of Infrastructure:
Community-based organizations and cooperatives can acquire, subdivide and develop land, construct housing, provide infrastructure and operate and maintain infrastructure such as wells or public toilets and solid waste collection services. They can also develop building material supply centres and other community-based economic enterprises. In many cases, they will need technical assistance or advice from governmental agencies or higher-level NGOs.
Supporting Innovation, Demonstration and Pilot Projects:
NGO have the advantage of selecting particular places for innovative projects and specify in advance the length of time which they will be supporting the project - overcoming some of the shortcomings that governments face in this respect. NGOs can also be pilots for larger government projects by virtue of their ability to act more quickly than the government bureaucracy.
Facilitating Communication:
NGOs use interpersonal methods of communication, and study the right entry points whereby they gain the trust of the community they seek to benefit. They would also have a good idea of the feasibility of the projects they take up. The significance of this role to the government is that NGOs can communicate to the policy-making levels of government, information about the lives, capabilities, attitudes and cultural characteristics of people at the local level. NGOs can facilitate communication upward from people to the government and downward from the government to the people. Communication upward involves informing government about what local people are thinking, doing and feeling while communication downward involves informing local people about what the government is planning and doing. NGOs are also in a unique position to share information horizontally, networking between other organizations doing similar work.

Ihunyere victorious ifeoma 2015/200357. Economics Education said...

Technical Assistance and Training:
Training institutions and NGOs can develop a technical assistance and training capacity and use this to assist both CBOs and governments.
Research, Monitoring and Evaluation:
Innovative activities need to be carefully documented and shared - effective participatory monitoring would permit the sharing of results with the people themselves as well as with the project staff.
Advocacy for and with the Poor:
In some cases, NGOs become spokespersons or ombudsmen for the poor and attempt to influence government policies and programmes on their behalf. This may be done through a variety of means ranging from demonstration and pilot projects to participation in public forums and the formulation of government policy and plans, to publicizing research results and case studies of the poor. Thus NGOs play roles from advocates for the poor to implementers of government programmes; from agitators and critics to partners and advisors; from sponsors of pilot projects to mediators.





















REFRENCES
https://www.investopedia.com/ask/answers/what is finance/

https://www.omicsonline.org/open-access/sources-of-public=funds-and-economic-prosperity-th-nigerian-case-2160234-1000215.php?aid=81299

https://www.taxpolicycenter.org/briefing-book/what-are-sources-revenue-federal-government

https://finance.laws.com/global-development-what-you-need-to-know-74999
https://www.investopedia.com/terms/e/economicgrowth.asp

http://www.nigeriavillagesquare.com/articles/the-role-of-non-governmental-organizations-ngos-in-development.html




NNAJI, AMARACHI GRACE 2015/203558 (ECONOMICS) said...

QUESTION ONE
DISCUSS THE CONCEPT OF FINANCE AND DEVELOPMENT USING GLOBAL AND DOMESTIC STYLIZED FACTS
Development has traditionally meant achieving sustained rates of growth of income per capita to enable a nation to expand its output at a rate faster than the growth rate of its population. Levels and rates of growth of “real” per capita gross national income (GNI) (monetary growth of GNI per capita minus the rate of inflation) are then used to measure the overall economic well-being of a population—how much of real goods and services is available to the average citizen for consumption and investment. Economic development in the past has also been typically seen in terms of the planned alteration of the structure of production and employment so that agriculture’s share of both declines and that of the manufacturing and service industries increases. Development strategies have therefore usually focused on rapid industrialization, often at the expense of agriculture and rural development. With few exceptions, such as in development policy circles in the 1970s, development was until recently nearly always seen as an economic phenomenon in which rapid gains in overall and per capita GNI growth would either “trickle down” to the masses in the form of jobs and other economic opportunities or create the necessary conditions for the wider distribution of the economic and social benefits of growth. Problems of poverty, discrimination, unemployment, and income distribution were of secondary importance to “getting the growth job done.” Indeed, the emphasis is often on increased output, measured by gross domestic product (GDP).

NNAJI, AMARACHI GRACE 2015/203558 (ECONOMICS) said...

Global and domestic stylized facts on development
Financing for development is focused on new stakeholders in the financing of development cooperation. This is one of the most important UN approaches to supporting poor countries' financing of development and poverty reduction ¬- a necessity when official development assistance is no longer sufficient. The world is moving forward in many different areas, but to achieve the Global Goals for Sustainable Development, which define a sustainable world free from extreme poverty, we must mobilize resources from many different sources other than traditional state aid. The concept of "Financing for Development" was first adopted at a UN conference in Mexico in 2002. Today's development financing is primarily concerned with the financing of the Global Goals for Sustainable Development in low-income countries. When working with these goals, development financing plays a far more important role than in the previous work on the Millennium Development Goals. Financing for development is one of the most important UN approaches to support poor countries' financing of their development and the fight against poverty. The idea is to identify and coordinate new actors that can contribute to development both financially and with their expertise and competence. In order to reach the enormous sums that are required for a truly sustainable development, both private and public capital flows, other than official development assistance, must be involved. We need to engage actors such as banks, insurance companies and private donors while also working to develop tax systems in developing countries, which in many ways represent a huge potential resource. Official development assistance (ODA) remains the basis for the financing of development cooperation with development financing as a supplement. Sweden is working for all rich countries to live up to the agreement to designate at least 0.7 per cent of their gross national income (GNI) to development cooperation. At present, only a few countries meet this goal, among them Sweden. When traditional aid is combined with development financing there is an increase in total resources and also the probability of eradicating poverty. In several countries, including Germany, the UK and the Netherlands, financing for development is gradually being integrated into development cooperation. The supranational organization OECD as well as private and philanthropic actors have also begun working with development financing. Sida has been working with a series of projects in this area since 2014.

NNAJI, AMARACHI GRACE 2015/203558 (ECONOMICS) said...

QUESTION TWO
DO A CRITICAL ANALYSIS OF THE LINKAGES AND INTER-LINKAGES BETWEEN FINANCE AND DEVELOPMENT
How does the structure and growth of the financial sector in a country affect the growth and development of its economy? How is the rural economy affected by improved access to financial services? What are the results of the new emphasis on improving the access of the poor to microfinance services? An explosion of empirical research in recent years provides new information that I use in this survey paper to address these issues. Many of the publications cited concerning the cross-country analysis of financial systems were based on the analysis of new multi-country data sets recently created covering the period 1960 to 1997.1 A recent AID conference on rural finance also provided important information summarizing the state of the art.
Questions about the relationship between finance and economic development
 How have economists’ views evolved over time regarding the relationship between the financial system and growth?
Historically, economists have held strikingly different views about the importance of the financial system for economic growth (Levine, 1997). On the one hand, John Hicks argued that it played a critical role in England’s industrialization, while Joseph Schumpeter reasoned that well-functioning banks spurred technological innovation by identifying and funding the most innovative entrepreneurs. On the other hand, Joan Robinson felt that where enterprise led, then finance would follow. Levine observed that the pioneers of development economics often did not even mention finance in their work. Gurley and Shaw (1960) identified contributions that finance makes to the economy and Patrick (1966) observed that some countries pursued supply-leading policies which were intended to accelerate growth by expanding the financial system. Goldsmith (1969) is credited with being the first to document the growth in financial activities that occurs with overall growth in the economy, but he hesitated to conclude the direction of causality: Were financial factors responsible for accelerating economic development or did financial development reflect economic growth? Shaw (1973) and McKinnon (1973) were the first to describe how controls and regulations contributed to financial repression, which negatively affects economic growth. Their models were narrowly focused on money, although their descriptive narratives were broader. For example, McKinnon noted the importance of finance by using the example of technology adoption by farmers. He thought economic growth would be slowed without efficient finance because it would be virtually impossible for farmers to self-finance the needed investment to speedily adopt new technologies. Wachtel (2001) noted that McKinnon forcefully argued for financial liberalization and, by 1990, concluded that “there is widespread agreement that flows of saving and investment should be voluntary and significantly decentralized in an open capital market at close to equilibrium interest rates” (p. 336).

NNAJI, AMARACHI GRACE 2015/203558 (ECONOMICS) said...

Moving beyond money, Levine (1997) developed a comprehensive theoretical framework to explain how finance broadly defined can be conceptually linked to growth. This framework was used to organize his discussion regarding the explosion of research that emerged in the 1990s. The starting point is that financial markets and institutions may arise to ameliorate problems created by information and transaction frictions. Financial systems serve the primary function of facilitating the allocation of resources across space and time in an uncertain environment. These financial functions are expected to affect economic growth through capital accumulation and technological innovation. Levine’s framework helped guide subsequent empirical research that tested the relationship between finance and growth. Defined in this way, these functions help to justify the view that the financial sector operates like the “brain of the economy” (World Bank, 2001). 2. What does the empirical evidence reveal about the connection between financial development and growth?
 Does the impact of finance vary by size or type of firm or industry?
Firms finance themselves in various ways. Some use more external finance than others so the banking structure can have a greater impact on them. Rajan and Zingales (1998) classified firms in 36 manufacturing sectors in more than 40 countries according to their use of external finance as reflected in U.S firms. They concluded that industries more dependent on external finance grow faster in more financially developed countries. The effect of financial development occurs mostly through growth in the number of establishments rather than through growth in average size of establishment.
Cetorelli and Gambera (2001) extended that analysis to test how measures of bank concentration affect the growth of firms. Their results revealed that industries in which young firms are more dependent on external finance grow faster in those countries in which the banking system is more concentrated. The depressive effect of banking concentration on growth, therefore, may be offset by the positive effect on specific industries. If these results are found to be robust under additional testing, the implication is that there is no optimum banking market structure. Banking can have an impact on technological progress if it facilitates credit access to younger firms that are more likely to introduce innovative technologies. In this way the banking market structure may actually contribute to shaping industrial structure and the cross-industry size distribution of firms by providing finance to firms that grow more quickly.
Although efficient legal and financial systems can be a significant determinant of the financing of firms, it is not clear which aspects of financial and legal development are most significant and how they affect firms of different sizes. Beck, Demirguc-Kunt and Maksimovic (2002) used data from a sample of over 4,000 firms in 54 countries to test if the firms’ responses to questions of perceived constraints in fact affect growth, measured by growth in firm sales, and if the effect was different by sizes of firms.5 The survey provided “information on whether collateral requirements, bank bureaucracies, the need to have special connections with banks, high interest rates, lack of money in the banking system, and access to different types of financing are troubling enough issues for firms to report as constraints” (p. 6). The firms were asked their opinions about what they find particularly constraining about the legal system and most troubling about corruption. Small firms reported the highest financial and corruption constraints and the largest firms reported the highest legal constraints.

NNAJI, AMARACHI GRACE 2015/203558 (ECONOMICS) said...

QUESTION THREE
DISCUSS GOVERNMENT FINANCING, ITS SOURCES AND DISCUSS DEVELOPMENT FINANCING IN NIGERIA AND THEIR SOURCES
Government financing is the study of the means the government finances its projects in the economy. Government finance is the branch of economics which assesses the government revenue and government expenditure of the public authorities and the adjustment of one or the other to achieve desirable effects and avoid undesirable ones. The proper role of government provides a starting point for the analysis of public finance. In theory, under certain circumstances, private markets will allocate goods and services among individuals efficiently (in the sense that no waste occurs and that individual tastes are matching with the economy's productive abilities). If private markets were able to provide efficient outcomes and if the distribution of income were socially acceptable, then there would be little or no scope for government. In many cases, however, conditions for private market efficiency are violated. For example, if many people can enjoy the same good at the same time (non-rival, non-excludable consumption), then private markets may supply too little of that good. National defense is one example of non-rival consumption, or of a public good
Sources of finance
Government expenditures are financed primarily in three ways:
• Government revenue
o Taxes
o Non-tax revenue (revenue from government-owned corporations, sovereign wealth funds, sales of assets, or seigniorage)
• Government borrowing
• Money creation

NNAJI, AMARACHI GRACE 2015/203558 (ECONOMICS) said...

Taxes
Taxation is the central part of modern public finance. Its significance arises not only from the fact that it is by far the most important of all revenues but also because of the gravity of the problems created by the present day tax burden.[7] The main objective of taxation is raising revenue. A high level of taxation is necessary in a welfare State to fulfill its obligations. Taxation is used as an instrument of attaining certain social objectives i.e. as a means of redistribution of wealth and thereby reducing inequalities. Taxation in a modern Government is thus needed not merely to raise the revenue required to meet its ever-growing expenditure on administration and social services but also to reduce the inequalities of income and wealth. Taxation is also needed to draw away money that would otherwise go into consumption and cause inflation to rise.[8]
A tax is a financial charge or other levy imposed on an individual or a legal entity by a state or a functional equivalent of a state (for example, tribes, secessionist movements or revolutionary movements). Taxes could also be imposed by a subnational entity. Taxes consist of direct tax or indirect tax, and may be paid in money or as corvée labor. A tax may be defined as a "pecuniary burden laid upon individuals or property to support the government [ . . .] a payment exacted by legislative authority."[9] A tax "is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority" and is "any contribution imposed by government [ . . .] whether under the name of toll, tribute, tallage, gabel, impost, duty, custom, excise, subsidy, aid, supply, or other name."[10]
• There are various types of taxes, broadly divided into two heads – direct (which is proportional) and indirect tax (which is differential in nature):
• Stamp duty, levied on documents
• Excise tax (tax levied on production for sale, or sale, of a certain good)
• Sales tax (tax on business transactions, especially the sale of goods and services)
o Value added tax (VAT) is a type of sales tax
o Services taxes on specific services
• Road tax; Vehicle excise duty (UK), Registration Fee (USA), Regco (Australia), Vehicle Licensing Fee (Brazil) etc.
• Gift tax
• Duties (taxes on importation, levied at customs)
• Corporate income tax on corporations (incorporated entities)
• Wealth tax
• Personal income tax (may be levied on individuals, families such as the Hindu joint family in India, unincorporated associations, etc.)

NNAJI, AMARACHI GRACE 2015/203558 (ECONOMICS) said...

Debt
Governments, like any other legal entity, can take out loans, issue bonds and make financial investments. Government debt (also known as public debt or national debt) is money (or credit) owed by any level of government; either central or federal government, municipal government or local government. Some local governments issue bonds based on their taxing authority, such as tax increment bonds or revenue bonds.
As the government represents the people, government debt can be seen as an indirect debt of the taxpayers. Government debt can be categorized as internal debt, owed to lenders within the country, and external debt, owed to foreign lenders. Governments usually borrow by issuing securities such as government bonds and bills. Less creditworthy countries sometimes borrow directly from commercial banks or international institutions such as the International Monetary Fund or the World Bank.
Most government budgets are calculated on a cash basis, meaning that revenues are recognized when collected and outlays are recognized when paid. Some consider all government liabilities, including future pension payments and payments for goods and services the government has contracted for but not yet paid, as government debt. This approach is called accrual accounting, meaning that obligations are recognized when they are acquired, or accrued, rather than when they are paid. This constitutes public debt.
Seigniorage
Seigniorage is the net revenue derived from the issuing of currency. It arises from the difference between the face value of a coin or bank note and the cost of producing, distributing and eventually retiring it from circulation. Seigniorage is an important source of revenue for some national banks, although it provides a very small proportion of revenue for advanced industrial countries

NNAJI, AMARACHI GRACE 2015/203558 (ECONOMICS) said...

QUESTION FOUR
DISCUSS OTHER FINANCIAL ASPECTS OF DEVELOPMENT


The legal origins puts forward the idea that common law based systems, are better suited than civil law based systems, for the development of capital markets. This is because civil law evolved to protect private property from the authority while common law was developed with the aim of addressing corruption of the judiciary and enhancing the powers of the state. Consequently, it is argued that capital markets developed faster in countries with common law systems than in those with civil law systems. The view that common-law countries have better shareholder protection than civil law countries has been challenged in an important recent study. At such finances are used to developed sound legal system that will eradicate all forms of inefficiency in the market systems. This aspect of financial development has to do with the establishment of sound institutional system that will ensure that the right of everyone is protected. Unlike the civil laws that seek to satisfy the objective of those in power, this aspects of financial development advocates the funding of projects that will look into the origins of different laws that coordinate the production, consumption, and distribution system in every economy, so as to ensure the equitable distribution of resources in the society. Broad-based property rights protection is critical for investors and, consequently, for financial development. It takes central role in the political economy which, however, places little if any emphasis on the origin of the legal system. We may therefore conclude that while there is a broad consensus that a properly functioning legal system that provides effective protection for investors‟ property rights is important for financial development (and growth), the legal origins view is not widely accepted, indeed it has been largely discredited by lawyers.
These contributions, acknowledge the importance of strong institutions for economic growth, but do not focus on financial development per se. They ascribe institutional quality differences to varying initial endowments and dynamic political economy factors.
The initial endowment hypothesis suggests that the disease environment encountered by a country can be a major obstacle for the establishment of institutions that would promote long run prosperity. Thus, it is argued that European colonial powers established extractive institutions that are unsuitable for long-term growth where the environment was unfavourable and institutions that were better suited for growth where they encountered favourable environments. The economic institutions hypothesis addresses the main shortcoming of the endowment hypothesis, by proposing a dynamic political economy framework in which differences in economic institutions are the fundamental causes of differences in economic development. Economic institutions, which determine the incentives and constraints of economic agents, are social decisions that are chosen for their consequences. Political institutions and income distribution are the dynamic forces that combine to shape economic institutions and outcomes.

NNAJI, AMARACHI GRACE 2015/203558 (ECONOMICS) said...

QUESTION FIVE
CRITICALLY DISCUSS THE CONCEPT OF NON GOVERNMENTAL ORGANISATIO (NGO) AND THEIR IMPACT ON DEVELOPMENT
A non-governmental organization (NGO) is a non-profit, citizen-based group that functions independently of government. NGOs, sometimes called civil societies, are organized on community, national and international levels to serve specific social or political purposes, and are cooperative, rather than commercial, in nature. Non-governmental organizations (NGOs) are high-profile actors in the field of international development, both as providers of services to vulnerable individuals and communities and as campaigning policy advocates. This book provides a critical introduction to the wide-ranging topic of NGOs and development. Written by two authors with more than 20 years’ experience each of research and practice in the field, the book combines a critical overview of the main research literature with a set of up-to-date theoretical and practical insights drawn from experience in Asia, Europe, Africa and elsewhere.
Two broad groups of NGOs are identified by the World Bank:
• Operational NGOs, which focus on development projects.
• Advocacy NGOs, which are organized to promote particular causes.
Certain NGOs may fall under both categories simultaneously. Examples of NGOs include those that support human rights, advocate for improved health or encourage political participation.
While the term "NGO" has various interpretations, it is generally accepted to include private organizations that operate without government control and that are non-profit and non-criminal. Other definitions further clarify NGOs as associations that are non-religious and non-military. Some NGOs rely primarily on volunteers, while others support a paid staff.
How NGOs are Funded
As non-profits, NGOs rely on a variety of sources for funding, including:
• membership dues
• private donations
• the sale of goods and services
• grants
Despite their independence from government, some NGOs rely significantly on government funding. Large NGOs may have budgets in the millions or billions of dollars.
Types of NGOs
A number of NGO variations exist, including:
• BINGO: business-friendly international NGO (example: Red Cross)
• ENGO: environmental NGO (Greenpeace and World Wildlife Fund)
• GONGO: government-organized non-governmental organization (International Union for Conservation of Nature)
• INGO: international NGO (Oxfam)
• QUANGO: quasi-autonomous NGO (International Organization for Standardization [ISO])

NNAJI, AMARACHI GRACE 2015/203558 (ECONOMICS) said...

What do NGOs bring to Development?
When NGOs began attracting attention during the late 1980s, they appealed to different sections of the development community for different reasons. For some Western donors, who had become frustrated with the often bureaucratic and ineffective governmentto-government, project-based aid then in vogue, NGOs provided an alternative and more flexible funding channel, which potentially offered a higher chance of local-level implementation and grassroots participation. For example, Cernea (1988: 8) argued that NGOs embodied ‘a philosophy that recognizes the centrality of people in development policies’, and that this, along with some other factors, gave them certain ‘comparative advantages’ over government and public sector. NGOs were seen as fostering local participation, since they were more locally rooted organizations, and therefore closer to marginalized people than most officials were. Poor people were often found to have been bypassed by existing public services, since many government agencies faced resource shortages and their decision-making processes were often captured by elites. Many also claimed that NGOs were generally operating at a lower cost, due to their use of voluntary community input. Finally, NGOs were seen as possessing the scope to experiment and innovate with alternative ideas and approaches to development. Some NGOs were also seen as bringing a set of new and progressive development agendas of participation, gender, environment and empowerment that were beginning to capture the imagination of many development activists at this time. For other donors and some governments, concerned with the need to liberalize and roll back the state as part of structural adjustment policies (SAPs), NGOs were also seen as a cost-effective and efficient alternative to public sector service delivery. Structural adjustment was a condition of many of the loans provided by the World Bank and the IMF from the late 1970s onwards which obliged governments to reduce the role of the state in the running of the economy and the social sectors, to open up the economy to foreign investment and to reduce barriers to trade.

NNAJI, AMARACHI GRACE 2015/203558 (ECONOMICS) said...

NGOs and contemporary development theory
Three other areas of current applied development theory are relevant to NGOs, and these are briefly introduced here.
Social exclusion
Originating from work on social policy and poverty in industrialized countries, the concept of social exclusion has come to be incorporated into development theory in some quarters. As an approach to understanding poverty, it shifts attention away from simple economic measurements of poverty, to focus on the processes which produce it and the capacity of people to operationalize their rights to social and economic well-being. As Kabeer (2004: 2) writes, the value of social exclusion is in offering an integrated way of looking at different forms of disadvantage which have tended to be dealt with separately … In particular it captures the experiences of the certain groups and categories in a society of somehow being ‘set apart’ from others, of being ‘locked-out’ or ‘left behind’ in a way that the existing frameworks for poverty analysis had failed to capture. What is relevant to NGOs is that the framework of social exclusion draws attention to the need for appropriate institutional responses to social disadvantage which can address causes as well as outcomes, and the problem that, as De Haan (2007: 134) points out, ‘a dominant neo-liberal ideological framework tends to reduce state responsibility in poverty alleviation, reduction of inequalities and social integration’. It also serves to underline for NGOs the importance of working, beyond simply service delivery, to rights-based approaches that can strengthen the voices of people who find themselves excluded from policy and political processes.
Social capital
NGOs have also been associated with the concept of ‘social capital’, which began to find its way into development policy debates from the mid 1990s. One of its best-known theorists is Robert Putnam (1993: 167), who uses the term to refer to the relationships of trust and civic responsibility that can accumulate among members of a community over a long period of time:
Social capital … refers to features of social organization, such as trust, norms [of reciprocity] and networks [of civic engagement], that can improve the efficiency of society by facilitating co-ordinated actions.
Through participating in both formal groups and informal networks, an awareness of the greater good develops. For Putnam, social capital is also integrative beyond the private self-interest of kin-based groups which may restrict wider norms of trust and cooperation. Yet the term is understood differently by different theorists. Coleman (1990: 300) includes kin within his more general definition of social capital, as ‘the set of resources that inhere in family relations and in community social organization’, linking the concept back to theories of institutionalism and trust.

NNAJI, AMARACHI GRACE 2015/203558 (ECONOMICS) said...

Social movements
A discussion of NGOs and development theory also needs to consider the field of social movements, already touched upon above in connection with ‘post-development’. Like NGOs, social movements may reflect the desire on the part of citizens to gain better access to modernity in the form of economic or social rights or welfare services through strengthened citizenship and civil society participation, but they may also take the form of movements which question and resist the global hegemonies of industrial growth, market capitalism and administrative power. The wide-ranging literature on social movements sometimes makes a distinction between longstanding or ‘classical’ social movements such as the trade unions and cooperatives, and ‘new’ social movements, which have included feminism, indigenous people and other forms of identity-based struggle. The work of French sociologist Alaine Touraine (1988) has been influential in the manner in which it shows the ways social actors build and act on identities, such as workers, women, students or environmentalist activists, to generate these new forms of social movements which emerge out of the everyday experiences of citizens living under conditions of domination. The issue of social movements raises important issues about their relationship with NGOs. Korten’s schema (see Chapter 1) was one in which the act of linking up with social movements and joining broader struggles for transformation represented the final and decisive stage in the maturation process of sustainable development NGOs. He also drew attention to the ways in which development NGOs may sometimes be born as the end-points of social movements, as in the case of James Yen’s literacy movement in 1940s China, which led to the formation of the International Institute for Rural Reconstruction and which has remained an influential NGO, with its headquarters in the Philippines. Some NGOs can be seen as organizational components of social movements which seek connections with institutionalized systems of decision-making in order to represent their interests and objectives . (McCarthy and Zald 1977). On the other hand, NGOs may become advocates of issues which have yet to generate a wider social movement, such as child rights or consumer rights, by acting on behalf of a certain part of the population as the ‘advance guard’ for ideas for change. This connects with discussions of NGO advocacy and partnership discussed in Chapter 5. Critics such as Kaldor (2003) instead point to the tendency for NGOs to represent sometimes the domestication or taming of previously radical grassroots social movements for change, which become institutionalized, while others see NGOs as professionalized, externally funded competitors to social movements which may draw away and dissipate their radical energies and their grassroots support base. In Brazil, Dagnino (2008) argues that local social movements have been crowded out, in the engagement between neoliberal development agencies and NGOs in relation to building participation and democratization, with the result that the broader concept of citizenship has been depoliticized. On the other hand, distinguishing between movements and organizations is not always a straightforward matter. Hopgood (2006) shows that Amnesty International can, in many respects, be seen as much as a ‘movement’ as an ‘NGO’, reflecting the idea that when it comes to value-driven public action around issues such as development or human rights, the boundaries between organizations and movements can be ambiguous. Hulme (2008) also suggests that making a clear conceptual distinction between NGOs and social movements is not always useful, given ‘the fluidity of analytical boundaries’.

NNAJI, AMARACHI GRACE 2015/203558 (ECONOMICS) said...

NGO roles in contemporary development practice
Service delivery
The implementation of service delivery by NGOs is important simply because many people in developing countries face a situation in which a wide range of vital basic services are unavailable or of poor quality (Carroll 1992). There has been a rapid growth in NGO service provision, as neoliberal development policies have emphasized a decreasing role for governments as direct service providers. In many parts of the developing world, government services have been withdrawn under conditions which have been dictated by the World Bank and other donors, leaving NGOs of varying types and with capacities and competence of varying quality to pick up the peices. The motivation for an NGO to become involved in providing services may vary. Sometimes it does so in order to meet previously unmet needs, while at other times an NGO is ‘contracted’ by the government (or by a donor, or a company) to take over the delivery of services which were formerly provided by government. Not all NGOs provide services directly to local communities. Some seek to tackle poverty indirectly by providing other forms of services, such as giving training to other NGOs, government or the private sector, or undertaking applied research as a commission, or providing specialized inputs such as conflict-resolution training. The ‘good governance’ agenda has emphasized a more flexible provision of services through using a range of private sector and nongovernmental actors. As Brett (1993) points out, NGOs exist as actors within a broader, pluralistic organizational universe, alongside the state and private sector, which has the potential to expand the range of institutional choices open to governments and to communities. In some contexts, such as the UK, this has become known as the purchaser–provider split in which the government is responsible for purchasing the services which are to be supplied, but then contracts another agency to actually provide them. Some donors have argued for a stronger role for NGOs in service delivery work because they are believed to possess a set of distinctive organizational capacities and comparative advantages, such as flexibility, commitment and cost-effectiveness Yet in practice, the diversity of NGOs as organizations means that such generalizations are often difficult to sustain. While some NGOs have proved themselves to be highly effective service providers in certain sectors and contexts, others are found to perform poorly. For example, Robinson and White (1997) found that NGO service provision was frequently characterized by problems of quality control, limited sustainability, poor coordination and general amateurism. It may be the desire to cut costs, rather than an interest in improving effectiveness, that lies at the heart of a decision to make greater use of NGOs to deliver a particular service. For every case of an effective NGO, it is usually possible to point to another NGO which has high administrative overheads, poor management and low levels of effectiveness. Nor are such organizational characteristics fixed or innate. Seckinelgin (2006) has argued that, while some HIV/AIDS NGOs have become attractive partners for donors in Africa because of their closeness to local

NNAJI, AMARACHI GRACE 2015/203558 (ECONOMICS) said...

NGOs as watchdogs
Another key role for NGOs is to act as monitors which can, in Najam’s (1999: 152) phrase, ‘keep policy honest’. This role may include the idea of being a whistle-blower if certain policies remain unimplemented or are carried out poorly, as well as scanning the policy horizon for events and activities which could interfere with future policy development and implementation. An example of this is the US-based NGO CorpWatch, which was founded in 1996. It aims to investigate and expose corporate violations of human rights, environmental crimes, fraud, and corruption around the world and its mission is to foster global justice, independent media activism and more democratic control over corporations. It claims to have led the exposure of the deplorable working conditions in the Vietnamese clothing factories that supplied the sportswear manufacturer Nike in the mid 1990s. More recently, it has published two books – entitled Iraq Inc. and Afghanistan Inc. – which investigate the ways in which multinational corporations (MNCs) are making profits out of these two wars and from the reconstruction efforts which have followed. Numerous NGOs are entirely devoted to monitoring the behaviour of multinational companies, although their objectives vary widely. Lodge and Wilson (2006) argue that such organizations act as powerful watchdogs without any formal mandate or recourse to a particular legal framework, and that MNC managers, who might be willing to respond positively to an NGO request, are often uncertain about what is expected of them. International, a development NGO with a highly visible watchdog role in relation to issues of governance and corruption.
Partnership
A key element of current development policy is the creation of partnerships as a way of making more efficient use of scarce resources, increasing institutional sustainability and improving the quality of an NGO’s interactions. Partnership usually refers to an agreed relationship based on a set of links between two or more agencies within a project or programme, usually involving a division of roles and responsibilities, a sharing of risks and the pursuit of joint objectives. Yet partnership can also be seen as a development ‘buzzword’ par excellence, since it has come to mean different things to different development actors. At first, in the early 1990s, partnerships were proclaimed as a key policy idea but there were few clear or precise definitions. The 1997 British government White Paper on development was full of references to partnerships between countries, donors, governments, NGOs and businesses, but was vague as to the forms such partnerships might take (DFID 1997). More recently, Cornwall (2005) has shown how Action Aid Brazil’s understanding of partnership with Centro Mulheres do Cabo, a local community organization, has developed from simply being about ‘establishing a project that could be pursued together’ to becoming a much broader, two-way process in which the parties challenge each other with critical comments and ideas, exchange contacts and networks, and assist each other with expertise and methodologies. NGOs have therefore become concerned to reflect on the many meanings of partnership, and some have prepared policy documents that aim to make clearer the objectives and terms of their various partnerships (Box 5.12). The origins of a partnership are likely to be important for its performance. Some NGOs may enter into new organizational relationships in order to gain access to external resources which are conditional on partnership. Others may drift into partnerships without adequately considering the wider implications.

NNAJI, AMARACHI GRACE 2015/203558 (ECONOMICS) said...

. For example, new roles for staff may have to be created in order to service the partnership properly, or management systems may be required to monitor the progress of new activities. NGOs in particular are vulnerable to being viewed instrumentally, as agents which have been enlisted simply to work to the agendas of others as ‘reluctant partners’ (Farrington and Bebbington 1993). In a study of partnerships within an aquaculture project in Bangladesh, Lewis (1998a) found that so-called partnerships described in the project documents to be occurring between NGOs and government agencies were more a product of opportunities for gaining access to external resources than any kind of complementarity or functional logic.
‘Active’ partnerships are those built through ongoing processes of negotiation, debate, occasional conflict, and learning through trial and error. Risks are taken, and although roles and purposes are clear they may change according to need and circumstance. ‘Dependent’ partnerships, on the other hand, have a blueprint character and are constructed at the project planning stage according to a set of rigid assumptions about comparative advantage and individual agency interests, often linked to the availability of outside funding. There may be consensus among the partners, but this often reflects unclear roles and responsibilities rather than the creative conflicts which emerge within active partnerships (Lewis 1998a). Partnership may bring extra costs, which are easily underestimated, such as new lines of communications requiring demands on staff time, vehicles and telephones; new responsibilities for certain staff; and the need to share information with other agencies. Evans (1996) argues that, rather than NGOs and government merely complementing each other’s work in a functional sense or engaging in competition with each other, a more useful ‘synergy’ can be created if the relationship between them becomes a mutually reinforcing one based on a clear division of labour and mutual recognition and acceptance of these roles observed that good progress with development in north-east Brazil was not based on the special strengths of any one particular type of organizational actor, but resulted instead from a complex, three-way dynamic between central government, local government and civil society.
The rise and role of NGOs in sustainable development
Non-governmental organizations (NGOs) have played a major role in pushing for sustainable development at the international level. Campaigning groups have been key drivers of inter-governmental negotiations, ranging from the regulation of hazardous wastes to a global ban on land mines and the elimination of slavery. But NGOs are not only focusing their energies on governments and inter-governmental processes. With the retreat of the state from a number of public functions and regulatory activities, NGOs have begun to fix their sights on powerful corporations - many of which can rival entire nations in terms of their resources and influence. Aided by advances in information and communications technology, NGOs have helped to focus attention on the social and environmental externalities of business activity.

NNAJI, AMARACHI GRACE 2015/203558 (ECONOMICS) said...

Multinational brands have been acutely susceptible to pressure from activists and from NGOs eager to challenge a company's labour, environmental or human rights record. Even those businesses that do not specialize in highly visible branded goods are feeling the pressure, as campaigners develop techniques to target downstream customers and shareholders. In response to such pressures, many businesses are abandoning their narrow Milton Friedmanite shareholder theory of value in favour of a broader, stakeholder approach which not only seeks increased share value, but cares about how this increased value is to be attained. Such a stakeholder approach takes into account the effects of business activity - not just on shareholders, but on customers, employees, communities and other interested groups. There are many visible manifestations of this shift. One has been the devotion of energy and resources by companies to environmental and social affairs. Companies are taking responsibility for their externalities and reporting on the impact of their activities on a range of stakeholders.
Although it is often assumed that NGOs are charities or enjoy non-profit status, some NGOs are profit-making organizations such as cooperatives or groups which lobby on behalf of profit-driven interests. For example, the World Trade Organization's definition of NGOs is broad enough to include industry lobby groups such as the Association of Swiss Bankers and the International Chamber of Commerce. Such a broad definition has its critics. It is more common to define NGOs as those organizations which pursue some sort of public interest or public good, rather than individual or commercial interests. Even then, the NGO community remains a diverse constellation. Some groups may pursue a single policy objective - for example access to AIDS drugs in developing countries or press freedom. Others will pursue more sweeping policy goals such as poverty eradication or human rights protection.
However, one characteristic these diverse organizations share is that their non-profit status means they are not hindered by short-term financial objectives. Accordingly, they are able to devote themselves to issues which occur across longer time horizons, such as climate change, malaria prevention or a global ban on landmines. Public surveys reveal that NGOs often enjoy a high degree of public trust, which can make them a useful - but not always sufficient - proxy for the concerns of society and stakeholders. Not all NGOs are amenable to collaboration with the private sector. Some will prefer to remain at a distance, by monitoring, publicizing, and criticizing in cases where companies fail to take seriously their impacts upon the wider community. However, many are showing a willingness to devote some of their energy and resources to working alongside business, in order to address corporate social responsibility.

OBIKE MARTHA O 2015/200435 ECONOMICS DEPARTMENT said...

CHAPTER ONE
THE CONCEPT OF FINANCE AND DEVELOPMENT
1.0 THE CONCEPT OF FINANCE
FINANCE is a field that is concerned with the allocation (investment) of assets and liabilities (known as elements of the balance statement) over space and time, often under conditions of risk or uncertainty. Finance can also be defined as the science of money management. Market participants aim to price assets based on their risk level, fundamental value, and their expected rate of return. Finance can be broken into three sub-categories: public finance, corporate finance and personal finance.
PUBLIC FINANCE
Public finance describes finance as related to sovereign states and sub-national entities (states/provinces, counties, municipalities, etc.) and related public entities (e.g. school districts) or agencies. It usually encompasses a long-term strategic perspective regarding investment decisions that affect public entities. These long-term strategic periods usually encompass five or more years. Public finance is primarily concerned with:
• Identification of required expenditure of a public sector entity
• Source(s) of that entity's revenue
• The budgeting process
• Debt issuance (municipal bonds) for public works projects
FINANCIAL THEORY
Financial economics is the branch of economics studying the interrelation of financial variables, such as prices, interest rates and shares, as opposed to goods and services. Financial economics concentrates on influences of real economic variables on financial ones, in contrast to pure finance. It centres on managing risk in the context of the financial markets, and the resultant economic and financial models. It essentially explores how rational investors

OBIKE MARTHA O 2015/200435 ECONOMICS DEPARTMENT said...

rational investors would apply risk and return to the problem of an investment policy. Here, the twin assumptions of rationality and market efficiency lead to modern portfolio theory (the CAPM), and to the Black–Scholes theory for option valuation; it further studies phenomena and models where these assumptions do not hold, or are extended. "Financial economics", at least formally, also considers investment under "certainty" (Fisher separation theorem, "theory of investment value", Modigliani–Miller theorem) and hence also contributes to corporate finance theory. Financial econometrics is the branch of financial economics that uses econometric techniques to parameterize the relationships suggested.
Although they are closely related, the disciplines of economics and finance are distinct. The “economy” is a social institution that organizes a society’s production, distribution, and consumption of goods and services, all of which must be financed.
Financial mathematics
Financial mathematics is a field of applied mathematics, concerned with financial markets. The subject has a close relationship with the discipline of financial economics, which is concerned with much of the underlying theory that is involved in financial mathematics. Generally, mathematical finance will derive, and extend, the mathematical or numerical models suggested by financial economics. In terms of practice, mathematical finance also overlaps heavily with the field of computational finance (also known as financial engineering). Arguably, these are largely synonymous, although the latter focuses on application, while the former focuses on modelling and derivation (see: Quantitative analyst). The field is largely focused on the modelling of derivatives, although other important subfields include insurance mathematics and quantitative portfolio problems. See Outline of finance: Mathematical tools; Outline of finance: Derivatives pricing.
Experimental finance
Experimental finance aims to establish different market settings and environments to observe experimentally and provide a lens through which science can analyze agents' behaviour and the resulting characteristics of trading flows, information diffusion and aggregation, price setting mechanisms, and returns processes. Researchers in experimental finance can study to what extent existing financial economics theory makes valid predictions and therefore prove them, and attempt to discover new principles on which such theory can be extended and be

OBIKE MARTHA O 2015/200435 ECONOMICS DEPARTMENT said...

GOVERNMENT FINANCING, ITS SOURCES AND DISCUSS DEVELOPMENT FINANCING IN NIGERIA AND THEIR SOURCES
PUBLIC FINANCE is the study of the role of the government in the economy. It is the branch of economics which assesses the government revenue and government expenditure of the public authorities and the adjustment of one or the other to achieve desirable effects and avoid undesirable ones.
The purview of public finance is considered to be threefold: governmental effects on (1) efficient allocation of resources, (2) distribution of income, and (3) macroeconomic stabilization.
OVERVIEW OF GOVERNMENT FINANCING
The proper role of government provides a starting point for the analysis of public finance. In theory, under certain circumstances, private markets will allocate goods and services among individuals efficiently (in the sense that no waste occurs and that individual tastes are matching with the economy's productive abilities). If private markets were able to provide efficient outcomes and if the distribution of income were socially acceptable, then there would be little or no scope for government. In many cases, however, conditions for private market efficiency are violated. For example, if many people can enjoy the same good at the same time (non-rival, non-excludable consumption), then private markets may supply too little of that good. National defence is one example of non-rival consumption, or of a public good. "Market failure" occurs when private markets do not allocate goods or services efficiently. The existence of market failure provides an efficiency-based rationale for collective or governmental provision of goods and services. Externalities, public goods, informational advantages, strong economies of scale, and network effects can cause market failures. Public provision via a government or a voluntary association, however, is subject to other inefficiencies, termed "government failure." Under broad assumptions, government decisions about the efficient scope and level of activities can be efficiently separated from decisions about the design of taxation systems (Diamond-Mirlees separation). In this view, public sector programs should be designed to maximize social benefits minus costs (cost-benefit analysis), and then revenues needed to pay for those expenditures should be raised

OBIKE MARTHA O 2015/200435 ECONOMICS DEPARTMENT said...

rational investors would apply risk and return to the problem of an investment policy. Here, the twin assumptions of rationality and market efficiency lead to modern portfolio theory (the CAPM), and to the Black–Scholes theory for option valuation; it further studies phenomena and models where these assumptions do not hold, or are extended. "Financial economics", at least formally, also considers investment under "certainty" (Fisher separation theorem, "theory of investment value", Modigliani–Miller theorem) and hence also contributes to corporate finance theory. Financial econometrics is the branch of financial economics that uses econometric techniques to parameterize the relationships suggested.
Although they are closely related, the disciplines of economics and finance are distinct. The “economy” is a social institution that organizes a society’s production, distribution, and consumption of goods and services, all of which must be financed.
Financial mathematics
Financial mathematics is a field of applied mathematics, concerned with financial markets. The subject has a close relationship with the discipline of financial economics, which is concerned with much of the underlying theory that is involved in financial mathematics. Generally, mathematical finance will derive, and extend, the mathematical or numerical models suggested by financial economics. In terms of practice, mathematical finance also overlaps heavily with the field of computational finance (also known as financial engineering). Arguably, these are largely synonymous, although the latter focuses on application, while the former focuses on modelling and derivation (see: Quantitative analyst). The field is largely focused on the modelling of derivatives, although other important subfields include insurance mathematics and quantitative portfolio problems. See Outline of finance: Mathematical tools; Outline of finance: Derivatives pricing.
Experimental finance
Experimental finance aims to establish different market settings and environments to observe experimentally and provide a lens through which science can analyze agents' behaviour and the resulting characteristics of trading flows, information diffusion and aggregation, price setting mechanisms, and returns processes. Researchers in experimental finance can study to what extent existing financial economics theory makes valid predictions and therefore prove them, and attempt to discover new principles on which such theory can be extended and be

OBIKE MARTHA O 2015/200435 ECONOMICS DEPARTMENT said...

Government expenditures
Economists classify government expenditures into three main types. Government purchases of goods and services for current use are classed as government consumption. Government purchases of goods and services intended to create future benefits – such as infrastructure investment or research spending – are classed as government investment. Government expenditures that are not purchases of goods and services, and instead just represent transfers of money – such as social security payments – are called transfer payments.
Government operations
Government operations are those activities involved in the running of a state or a functional equivalent of a state (for example, tribes, secessionist movements or revolutionary movements) for the purpose of producing value for the citizens. Government operations have the power to make, and the authority to enforce rules and laws within a civil, corporate, religious, academic, or other organization or group.
Income distribution
• Income distribution – Some forms of government expenditure are specifically intended to transfer income from some groups to others. For example, governments sometimes transfer income to people that have suffered a loss due to natural disaster. Likewise, public pension programs transfer wealth from the young to the old. Other forms of government expenditure which represent purchases of goods and services also have the effect of changing the income distribution. For example, engaging in a war may transfer wealth to certain sectors of society. Public education transfers wealth to families with children in these schools. Public road construction transfers wealth from people that do not use the roads to those people that do (and to those that build the roads).
• Income Security
• Employment insurance
• Health Care
• Public financing of campaigns

OBIKE MARTHA O 2015/200435 ECONOMICS DEPARTMENT said...

Sources of government financing



Budgeted revenues of governments in 2006.

Government expenditures are financed primarily in three ways:
• Government revenue
o Taxes
o Non-tax revenue (revenue from government-owned corporations, sovereign wealth funds, sales of assets, or seigniorage)
• Government borrowing
• Money creation
How a government chooses to finance its activities can have important effects on the distribution of income and wealth (income redistribution) and on the efficiency of markets (effect of taxes on market prices and efficiency). The issue of how taxes affect income distribution is closely related to tax incidence, which examines the distribution of tax burdens after market adjustments are taken into account. Public finance research also analyzes effects of the various types of taxes and types of borrowing as well as administrative concerns, such as tax enforcement.

OBIKE MARTHA O 2015/200435 ECONOMICS DEPARTMENT said...

Taxes
Taxation is the central part of modern public finance. Its significance arises not only from the fact that it is by far the most important of all revenues but also because of the gravity of the problems created by the present day tax burden. The main objective of taxation is raising revenue. A high level of taxation is necessary in a welfare State to fulfill its obligations. Taxation is used as an instrument of attaining certain social objectives i.e. as a means of redistribution of wealth and thereby reducing inequalities. Taxation in a modern Government is thus needed not merely to raise the revenue required to meet its ever-growing expenditure on administration and social services but also to reduce the inequalities of income and wealth. Taxation is also needed to draw away money that would otherwise go into consumption and cause inflation to rise.
A tax is a financial charge or other levy imposed on an individual or a legal entity by a state or a functional equivalent of a state (for example, tribes, secessionist movements or revolutionary movements). Taxes could also be imposed by a subnational entity. Taxes consist of direct tax or indirect tax, and may be paid in money or as corvée labor. A tax may be defined as a "pecuniary burden laid upon individuals or property to support the government [ . . .] a payment exacted by legislative authority." A tax "is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority" and is "any contribution imposed by government [ . . .] whether under the name of toll, tribute, tallage, gabel, impost, duty, custom, excise, subsidy, aid, supply, or other name.
• There are various types of taxes, broadly divided into two heads – direct (which is proportional) and indirect tax (which is differential in nature):
• Stamp duty, levied on documents
• Excise tax (tax levied on production for sale, or sale, of a certain good)
• Sales tax (tax on business transactions, especially the sale of goods and services)
o Value added tax (VAT) is a type of sales tax
o Services taxes on specific services
• Road tax; Vehicle excise duty (UK), Registration Fee (USA), Regco (Australia), Vehicle Licensing Fee (Brazil) etc.
• Gift tax

OBIKE MARTHA O 2015/200435 ECONOMICS DEPARTMENT said...

• Duties (taxes on importation, levied at customs)
• Corporate income tax on corporations (incorporated entities)
• Wealth tax
• Personal income tax (may be levied on individuals, families such as the Hindu joint family in India, unincorporated associations, etc.)







• Duties (taxes on importation, levied at customs)
• Corporate income tax on corporations (incorporated entities)
• Wealth tax
• Personal income tax (may be levied on individuals, families such as the Hindu joint family in India, unincorporated associations, etc.)
















• Duties (taxes on importation, levied at customs)
• Corporate income tax on corporations (incorporated entities)
• Wealth tax
• Personal income tax (may be levied on individuals, families such as the Hindu joint family in India, unincorporated associations, etc.)















• Duties (taxes on importation, levied at customs)
• Corporate income tax on corporations (incorporated entities)
• Wealth tax
• Personal income tax (may be levied on individuals, families such as the Hindu joint family in India, unincorporated associations, etc.)


























OBIKE MARTHA O 2015/200435 ECONOMICS DEPARTMENT said...

OTHER FINANCIAL ASPECTS OF DEVELOPMENT
4.0 BORROWING
Governments, like any other legal entity, can take out loans, issue bonds and make financial investments. Government debt (also known as public debt or national debt) is money (or credit) owed by any level of government; either central or federal government, municipal government or local government. Some local governments issue bonds based on their taxing authority, such as tax increment bonds or revenue bonds.
As the government represents the people, government debt can be seen as an indirect debt of the taxpayers. Government debt can be categorized as internal debt, owed to lenders within the country, and external debt, owed to foreign lenders. Governments usually borrow by issuing securities such as government bonds and bills. Less creditworthy countries sometimes borrow directly from commercial banks or international institutions such as the International Monetary Fund or the World Bank.
Most government budgets are calculated on a cash basis, meaning that revenues are recognized when collected and outlays are recognized when paid. Some consider all government liabilities, including future pension payments and payments for goods and services the government has contracted for but not yet paid, as government debt. This approach is called accrual accounting, meaning that obligations are recognized when they are acquired, or accrued, rather than when they are paid. This constitutes public debt.
SEIGNIORAGE
Seigniorage is the net revenue derived from the issuing of currency. It arises from the difference between the face value of a coin or bank note and the cost of producing, distributing and eventually retiring it from circulation. Seigniorage is an important source of revenue for some national banks, although it provides a very small proportion of revenue for advanced industrial countries.

OBIKE MARTHA O 2015/200435 ECONOMICS DEPARTMENT said...

Government expenditures
Economists classify government expenditures into three main types. Government purchases of goods and services for current use are classed as government consumption. Government purchases of goods and services intended to create future benefits – such as infrastructure investment or research spending – are classed as government investment. Government expenditures that are not purchases of goods and services, and instead just represent transfers of money – such as social security payments – are called transfer payments.
Government operations
Government operations are those activities involved in the running of a state or a functional equivalent of a state (for example, tribes, secessionist movements or revolutionary movements) for the purpose of producing value for the citizens. Government operations have the power to make, and the authority to enforce rules and laws within a civil, corporate, religious, academic, or other organization or group.
Income distribution
• Income distribution – Some forms of government expenditure are specifically intended to transfer income from some groups to others. For example, governments sometimes transfer income to people that have suffered a loss due to natural disaster. Likewise, public pension programs transfer wealth from the young to the old. Other forms of government expenditure which represent purchases of goods and services also have the effect of changing the income distribution. For example, engaging in a war may transfer wealth to certain sectors of society. Public education transfers wealth to families with children in these schools. Public road construction transfers wealth from people that do not use the roads to those people that do (and to those that build the roads).
• Income Security
• Employment insurance
• Health Care
• Public financing of campaigns

OBIKE MARTHA O 2015/200435 ECONOMICS DEPARTMENT said...

CONCEPT OF NON-GOVERNMENTAL ORANIZATION
5.0 NON-GOVERNMENTAL ORGANIZATIONS commonly referred to as NGOs, are usually non-profit and sometimes international organizations independent of governments and international governmental organizations (though often funded by governments) that are active in humanitarian, educational, health care, public policy, social, human rights, environmental, and other areas to effect changes according to their objectives. They are thus a subgroup of all organizations founded by citizens, which include clubs and other associations that provide services, benefits, and premises only to members. Sometimes the term is used as a synonym of "civil society organization" to refer to any association founded by citizens, but this is not how the term is normally used in the media or everyday language, as recorded by major dictionaries. The explanation of the term by NGO.org (the non-governmental organizations associated with the United Nations) is ambivalent. It first says an NGO is any non-profit, voluntary citizens' group which is organized on a local, national or international level, but then goes on to restrict the meaning in the sense used by most English speakers and the media: Task-oriented and driven by people with a common interest, NGOs perform a variety of service and humanitarian functions, bring citizen concerns to Governments, advocate and monitor policies and encourage political participation through provision of information. NGOs are usually funded by donations, but some avoid formal funding altogether and are run primarily by volunteers. NGOs are highly diverse groups of organizations engaged in a wide range of activities, and take different forms in different parts of the world. Some may have charitable status, while others may be registered for tax exemption based on recognition of social purposes. Others may be fronts for political, religious, or other interests. Since the end of World War II, NGOs have had an increasing role in international development,[ particularly in the fields of humanitarian assistance and poverty alleviation. The number of NGOs worldwide is estimated to be 10 million. Russia had about 277,000 NGOs in 2008. India is estimated to have had around 2 million NGOs in 2009, just over one NGO per 600 Indians, and many times the number of primary schools and primary health centres in India. China is estimated to have approximately 440,000 officially registered NGOs. About 1.5 million domestic and foreign NGOs operated in the United States in 2017. The term 'NGO' is not always used consistently. In some countries the term NGO is applied to an organization that in another country would be called an NPO (non-

OBIKE MARTHA O 2015/200435 ECONOMICS DEPARTMENT said...

profit organization), and vice versa. Political parties and trade unions are considered NGOs only in some countries. There are many different classifications of NGO in use. The most common focus is on "orientation" and "level of operation". An NGO's orientation refers to the type of activities it takes on. These activities might include human rights, environmental, improving health, or development work. An NGO's level of operation indicates the scale at which an organization works, such as local, regional, national, or international.
The term "non-governmental organization" was first coined in 1945, when the United Nations (UN) was created. The UN, itself an intergovernmental organization, made it possible for certain approved specialized international non-state agencies — i.e., non-governmental organizations — to be awarded observer status at its assemblies and some of its meetings. Later the term became used more widely. Today, according to the UN, any kind of private organization that is independent from government control can be termed an "NGO", provided it is not-for-profit, non-prevention but not simply an opposition political party.
Types
NGO/GRO (governmental-related organizations) types can be understood by their orientation and level of how they operate.
By orientation
• Charitable orientation often involves a top-down paternalistic effort with little participation by the "beneficiaries". It includes NGOs with activities directed toward meeting the needs of the poor people.
• Service orientation includes NGOs with activities such as the provision of health, family planning or education services in which the programme is designed by the NGO and people are expected to participate in its implementation and in receiving the service.
• Participatory orientation is characterized by self-help projects where local people are involved particularly in the implementation of a project by contributing cash, tools, land, materials, labour etc. In the classical community development project, participation begins with the need definition and continues into the planning and implementation stages.

OBIKE MARTHA O 2015/200435 ECONOMICS DEPARTMENT said...

• Empowering orientation aims to help poor people develop a clearer understanding of the social, political and economic factors affecting their lives, and to strengthen their awareness of their own potential power to control their lives. There is maximum involvement of the beneficiaries with NGOs acting as facilitators.
By level of operation
• Community-based organizations (CBOs) arise out of people's own initiatives. They can be responsible for raising the consciousness of the urban poor, helping them to understand their rights in accessing needed services, and providing such services.
• City-wide organizations include organizations such as chambers of commerce and industry, coalitions of business, ethnic or educational groups, and associations of community organizations.
• State NGOs include state-level organizations, associations and groups. Some state NGOs also work under the guidance of National and International NGOs.
• National NGOs include national organizations such as the YMCAs/YWCAs, Bachpan Bachao Andolan, professional associations and similar groups. Some have state and city branches and assist local NGOs.
• International NGOs range from secular agencies such as Save the Children, SOS Children's Villages, OXFAM, Ford Foundation, Global march against child labor, and Rockefeller Foundation to religiously motivated groups. They can be responsible for funding local NGOs, institutions and projects and implementing projects.
5.1 IMPACT OF NON-GOVERNMENTAL ORGANIZATION ON DEVELOPMENT
Generally, NGOs act as implementers, catalysts, and partners. Firstly, NGOs act as implementers in that they mobilize resources in order to provide goods and services to people who are suffering due to a man-made disaster or a natural disaster. Secondly, NGOs act as catalysts in that they drive change. They have the ability to 'inspire, facilitate, or contribute to improved thinking and action to promote change'. Lastly, NGOs often act as partner alongside other organizations in order to tackle problems and address human needs more effectively. NGOs vary in their methods. Some act primarily as lobbyists, while others primarily conduct programs and activities. For instance, an NGO such as Oxfam, concerned with poverty alleviation, may provide needy people with the equipment and skills to find food and clean drinking water,

OBIKE MARTHA O 2015/200435 ECONOMICS DEPARTMENT said...

whereas an NGO like the FFDA helps through investigation and documentation of human rights. Violations and provides legal assistance to victims of human rights abuses. Others, such as the Afghanistan Information Management Services, provide specialized technical products and services to support development activities implemented on the ground by other organizations.
• OPERATIONAL
Operational NGOs seek to "achieve small-scale change directly through projects". They mobilize financial resources, materials, and volunteers to create localized programs. They hold large-scale fundraising events and may apply to governments and organizations for grants or contracts to raise money for projects. They often operate in a hierarchical structure; a main headquarters being staffed by professionals who plan projects, create budgets, keep accounts, and report and communicate with operational fieldworkers who work directly on projects. Operational NGOs deal with a wide range of issues, but are most often associated with the delivery of services or environmental issues, emergency relief, and public welfare. Operational NGOs can be further categorized by the division into relief-oriented versus development-oriented organizations; according to whether they stress service delivery or participation; whether they are religious or secular; and whether they are more public or private-oriented. Although operational NGOs can be community-based, many are national or international. The defining activity of operational NGOs is the implementation of projects.
• CAMPAIGNING
Campaigning NGOs seek to "achieve large-scale change promoted indirectly through influence of the political system". Campaigning NGOs need an efficient and effective group of professional members who are able to keep supporters informed, and motivated. They must plan and host demonstrations and events that will keep their cause in the media. They must maintain a large informed network of supporters who can be mobilized for events to garner media attention and influence policy changes. The defining activity of campaigning NGOs is holding demonstrations. Campaigning NGOs often deal with issues relating to human rights, women's rights, and children's rights. The primary purpose of an Advocacy NGO is to defend or promote a specific cause. As opposed to operational project management, these organizations typically try to raise awareness, acceptance and knowledge by lobbying, press work and activist event.

OBIKE MARTHA O 2015/200435 ECONOMICS DEPARTMENT said...

• BOTH OPERATIONAL AND CAMPAIGNING
It is not uncommon for NGOs to make use of both activities. Many times, operational NGOs will use campaigning techniques if they continually face the same issues in the field that could be remedied through policy changes. At the same time, Campaigning NGOs, like human rights organizations often have programs that assist the individual victims they are trying to help through their advocacy work.
• PUBLIC RELATIONS
Non-governmental organizations need healthy relationships with the public to meet their goals. Foundations and charities use sophisticated public relations campaigns to raise funds and employ standard lobbying techniques with governments. Interest groups may be of political importance because of their ability to influence social and political outcomes. A code of ethics was established in 2002 by The World Association of Non Governmental Organizations.
• PROJECT MANAGEMENT
There is an increasing awareness that management techniques are crucial to project success in non-governmental organizations. Generally, non-governmental organizations that are private have either a community or environmental focus. They address varieties of issues such as religion, emergency aid, or humanitarian affairs. They mobilize public support and voluntary contributions for aid; they often have strong links with community groups in developing countries, and they often work in areas where government-to-government aid is not possible. NGOs are accepted as a part of the international relations landscape, and while they influence national and multilateral policy-making, increasingly they are more directly involved in local action.
5.2 INFLUENCE OF NGOS UPON WORLD AFFAIRS
Service-delivery NGOs provide public goods and services that governments from developing countries are unable to provide to society, due to lack of resources. Service-delivery NGOs can serve as contractors or collaborate with democratized government agencies to reduce cost associated with public goods. Capacity-building NGOs influence global affairs differently, in the sense that the incorporation of accountability measures in Southern NGOs affect "culture, structure, projects and daily operations". Advocacy and public education NGOs affect global affairs in its ability to modify behaviour through the use of ideas. Communication is the

OBIKE MARTHA O 2015/200435 ECONOMICS DEPARTMENT said...

weapon of choice used by advocacy and public-education NGOs in order to change people's actions and behaviours. They strategically construct messages to not only shape behaviour, but to also socially mobilize communities in promoting social, political, or environmental changes. Movement NGOs mobilizes the public and coordinate large-scale collective activities to significantly push forward activism agenda. In the post-Cold War era, more NGOs based in developed countries have pursued international outreach and became involved in local and national level social resistance and become relevant to domestic policy change in the developing world. In for the cases where national governments are highly sensitive to external influences via non-state actors, specialized NGOs have been able to find the right partners (e.g., China), building up solid working networks, locating a policy niche and facilitating domestic changes. As Reza Hasmath has illustrated, in the 21st century NGOs have vastly expanded and diversified their role to influence local and global governance and "[permeate] a multitude of political, economic and socio-cultural contexts." NGOs' relationship with states has accordingly changed, encompassing greater collaboration between state and non-state actors, and due to decentralization and cuts in state budgets, they are capable of delivering a wide range of services.




OBIKE MARTHA O 2015/200435 ECONOMICS DEPARTMENT said...

2 MEASURING THE PUBLIC SECTOR
The size of governments, their institutional composition and complexity, their ability to carry out large and sophisticated operations, and their impact on the other sectors of the economy warrant a well-articulated system to measure government economic operations. The GFSM 2001 addresses the institutional complexity of government by defining various levels of government. The main focus of the GFSM 2001 is the general government sector defined as the group of entities capable of implementing public policy through the provision of primarily non market goods and services and the redistribution of income and wealth, with both activities supported mainly by compulsory levies on other sectors. The GFSM 2001 disaggregates the general government into subsectors: central government, state government, and local government (See Figure 1). The concept of general government does not include public corporations. The general government plus the public corporations comprise the public sector (See Figure 2).

Figure 1: General Government (IMF Government Finance Statistics Manual 2001(Washington, 2001) pp.13

OBIKE MARTHA O 2015/200435 ECONOMICS DEPARTMENT said...

Financial mathematics
Financial mathematics is a field of applied mathematics, concerned with financial markets. The subject has a close relationship with the discipline of financial economics, which is concerned with much of the underlying theory that is involved in financial mathematics. Generally, mathematical finance will derive, and extend, the mathematical or numerical models suggested by financial economics. In terms of practice, mathematical finance also overlaps heavily with the field of computational finance (also known as financial engineering). Arguably, these are largely synonymous, although the latter focuses on application, while the former focuses on modelling and derivation (see: Quantitative analyst). The field is largely focused on the modelling of derivatives, although other important subfields include insurance mathematics and quantitative portfolio problems. See Outline of finance: Mathematical tools; Outline of finance: Derivatives pricing.
Experimental finance
Experimental finance aims to establish different market settings and environments to observe experimentally and provide a lens through which science can analyze agents' behaviour and the resulting characteristics of trading flows, information diffusion and aggregation, price setting mechanisms, and returns processes. Researchers in experimental finance can study to what extent existing financial economics theory makes valid predictions and therefore prove them, and attempt to discover new principles on which such theory can be extended and be
is the internationally accepted methodology for compiling fiscal data. It is consistent with regionally accepted methodologies such as the European System of Accounts 1995 and consistent with the methodology of the System of National Accounts (SNA1993) and broadly in line with its most recent update, the SNA2008.

OBIKE MARTHA O 2015/200435 ECONOMICS DEPARTMENT said...

REFERENCES

Asogwa R.C (2005), “Asssessing the Benefits and Costs of Financial Sector
Reforms in Nigeria”: An Event Study Analysis. Being a paper
submitted for presentation at 46th annual Conference of the Nigerian
Economic Society.(NES) Lagos.
Central Bank of Nigeria Bullion Varoius Issues.
Dawood M. (2004) Financial Sector Reforms in Pakistan and a test of
McKinnon and Shaw’s Transmission Mechanism. “Lesson from the
last Decade”.Working Paper Series No. 397. Institute o Social
Studis. The Hague.
De Gregorio J. and Guidotti P. (1995) Financial Development and Economic
Growth in World Development 23, 3, Pp433-448
Demetriades P. and Hussein K. (1996) ‘Does Financial Development cause
Economic Growth? Time series Evidence from 16
Demirguc-Kunt, A., and.Levine R.(1996), “ Stock Market, Corporate Finance
and Economic Growth: An overview “in World Bank Economic
Review 10; 2, Pp223-39.
Gibson H. and Tsakalotos E.(1994) The scope and limit of financial
liberalization in Developing countries: An empirical analysis,
Journal of Development Studies, 30(3):578-628
Keynes, J, M (1936) The General Theory of Employment Interest, and
Money. London: Macmillan
Levine, R. and Zervos R. (1998), Stock Markets, Banks, and Economic
Growth,American Economic Review, 88(3), pp. 537-58.

OBIKE MARTHA O 2015/200435 ECONOMICS DEPARTMENT said...

REFERENCES

Asogwa R.C (2005), “Asssessing the Benefits and Costs of Financial Sector
Reforms in Nigeria”: An Event Study Analysis. Being a paper
submitted for presentation at 46th annual Conference of the Nigerian
Economic Society.(NES) Lagos.
Central Bank of Nigeria Bullion Varoius Issues.
Dawood M. (2004) Financial Sector Reforms in Pakistan and a test of
McKinnon and Shaw’s Transmission Mechanism. “Lesson from the
last Decade”.Working Paper Series No. 397. Institute o Social
Studis. The Hague.
De Gregorio J. and Guidotti P. (1995) Financial Development and Economic
Growth in World Development 23, 3, Pp433-448
Demetriades P. and Hussein K. (1996) ‘Does Financial Development cause
Economic Growth? Time series Evidence from 16
Demirguc-Kunt, A., and.Levine R.(1996), “ Stock Market, Corporate Finance
and Economic Growth: An overview “in World Bank Economic
Review 10; 2, Pp223-39.
Gibson H. and Tsakalotos E.(1994) The scope and limit of financial
liberalization in Developing countries: An empirical analysis,
Journal of Development Studies, 30(3):578-628
Keynes, J, M (1936) The General Theory of Employment Interest, and
Money. London: Macmillan
Levine, R. and Zervos R. (1998), Stock Markets, Banks, and Economic
Growth,American Economic Review, 88(3), pp. 537-58.

Anonymous said...

1.1 CONCEPT OF FINANCE
Finance is a field that is concerned with the allocation (investment) of assets and liabilities (known as elements of the balance statement) over space and time, often under conditions of risk or uncertainty. Finance can also be defined as the science of money management. Market participants aim to price assets based on their risk level, fundamental value, and their expected rate of return. Finance can be broken into three sub-categories: public finance, corporate finance and personal finance
PERSONAL FINANCE
Personal finance may involve paying for education, financing durable goods such as real estate and cars, buying insurance, e.g. health and property insurance, investing and saving for retirement. Personal finance may also involve paying for a loan, or debt obligations.
1.1.2 COPORATE FINANCE
Corporate finance deals with the sources funding and the capital structure of corporations, the actions that managers take to increase the value of the firm to the shareholders, and the tools and analysis used to allocate financial resources. Although it is in principle different from managerial finance which studies the financial management of all firms, rather than corporations alone, the main concepts in the study of corporate finance are applicable to the financial problems of all kinds of firms. Corporate finance generally involves balancing risk and profitability, while attempting to maximize an entity's assets, net incoming cash flow and the value of its stock, and generically entails three primary areas of capital resource allocation.
1.1.3 PUBLIC FINANCE
Public finance describes finance as related to sovereign states and sub-national entities (states/provinces, counties, municipalities, etc.) and related public entities (e.g. school districts) or agencies. It usually encompasses a long-term strategic perspective regarding investment decisions that affect public entities. These long-term strategic periods usually encompass five or more years.
Development finance is the efforts of local communities to support, encourage and catalyze expansion through public and private investment in physical development, redevelopment and/or business and industry. It is the act of contributing to a project or deal that causes that project or deal to materialize in a manner that benefits the long-term health of the community.

Development finance requires programs and solutions to challenges that the local business, industry, real estate and environment creates. As examples, we need unique financing approaches to address environmentally contaminated land and specific solutions to unlocking capital access in underserved markets and industries. Each of the problems that we seek to solve in development require unique and targeted solutions.

There are dozens of terms within the development finance industry including debt, equity, loans, bonds, credits, liabilities, remediation, guarantees, collateral, credit enhancement, venture/seed capital, angels, short-term, long-term, incentives, and gap financing.

OBIKE MARTHA O 2015/200435 ECONOMICS DEPARTMENT said...

Lindgreen and Odonye (2003) Towards common banking Supervision in
West Africa Monetary Zone: The way forward. Mimeo.
Luintel K.B. and Khan (1999) A Quantitative Reassessment of the Finance-
Growth Nexus; Evidence froma Multivariate VAR; in Journal of
Development Economics 60 Pp381-405
Lynch D. (1996). Measuring Financial Sectors Development; A Study of
Selected Asia-Pacific Countries in Developing Economies,
34,1,Pp3-33
McKinnon, R.I. (1973). Money and Capital in Economic Development
Washington D.C. Brookings Institution.
Odedokun M.O.(1989) “Casualties between Financial Aggregates and
economic Activities in Nigeria” The Results from Grangers Test in
Savings and Development, 23: 1 pp101-111
Patrick H.T. (1996) “Financial Development and Economic Growth in
Under developed Countries in Economic development and Cultural
Change14,2 Pp174-178.
Shaw E, (1973), Financial Deepening in Economic Development. New York:
Oxford University Press.
World Bank (2004) World Development Indicators, Washington D.C.

uzor promise chukwuemerie 2015/203154 said...

1.1 CONCEPT OF FINANCE
Finance is a field that is concerned with the allocation (investment) of assets and liabilities (known as elements of the balance statement) over space and time, often under conditions of risk or uncertainty. Finance can also be defined as the science of money management. Market participants aim to price assets based on their risk level, fundamental value, and their expected rate of return. Finance can be broken into three sub-categories: public finance, corporate finance and personal finance.
1.1.1 PERSONAL FINANCE
Personal finance may involve paying for education, financing durable goods such as real estate and cars, buying insurance, e.g. health and property insurance, investing and saving for retirement. Personal finance may also involve paying for a loan, or debt obligations.
1.1.2 COPORATE FINANCE
Corporate finance deals with the sources funding and the capital structure of corporations, the actions that managers take to increase the value of the firm to the shareholders, and the tools and analysis used to allocate financial resources. Although it is in principle different from managerial finance which studies the financial management of all firms, rather than corporations alone, the main concepts in the study of corporate finance are applicable to the financial problems of all kinds of firms. Corporate finance generally involves balancing risk and profitability, while attempting to maximize an entity's assets, net incoming cash flow and the value of its stock, and generically entails three primary areas of capital resource allocation.
1.1.3 PUBLIC FINANCE
Public finance describes finance as related to sovereign states and sub-national entities (states/provinces, counties, municipalities, etc.) and related public entities (e.g. school districts) or agencies. It usually encompasses a long-term strategic perspective regarding investment decisions that affect public entities. These long-term strategic periods usually encompass five or more years.Development finance is the efforts of local communities to support, encourage and catalyze expansion through public and private investment in physical development, redevelopment and/or business and industry. It is the act of contributing to a project or deal that causes that project or deal to materialize in a manner that benefits the long-term health of the community.

Development finance requires programs and solutions to challenges that the local business, industry, real estate and environment creates. As examples, we need unique financing approaches to address environmentally contaminated land and specific solutions to unlocking capital access in underserved markets and industries. Each of the problems that we seek to solve in development require unique and targeted solutions.

There are dozens of terms within the development finance industry including debt, equity, loans, bonds, credits, liabilities, remediation, guarantees, collateral, credit enhancement, venture/seed capital, angels, short-term, long-term, incentives, and gap financing.

uzor promise chukwuemerie 2015/203154 said...

5 Global Facts Of Development And Finance
The cross-country regression analysis has been confirmed with historic case studies and long-term statistical studies of individual countries. The Netherlands was the first European economy to develop a thriving financial system, with government bonds and a money market, a stable currency, and a first shareholding company (Dutch East India Company), preceding the ‘Golden Age’ of the Netherlands. Hicks (1969) argued that the Industrial Revolution in the United Kingdom was due to the development
of the British financial system, including the foundation of the Bank of England, which later served as lender of last resort, the adoption of sound government finances as a basis for a liquid government bond market, the development of the stock market in London, and a system of London and regionally based banks linked through a money market in London. Although many inventions were made before the Industrial Revolution, liquid capital markets enabled investment into long-term projects that could use these inventions. Similarly, the United States experienced financial deepening before its economic and political rise in the twentieth century. In Germany, universal banks played a critical role in financing infrastructure and industrialisation in the 19th century, while cooperative and savings banks played a significant role in expanding access to financial services to large parts of the population in both rural and urban areas. Japan was the only non-Western economy to develop its financial system early on, during the Meiji era, allowing rapid industrialisation towards the end of the 19th century. There is thus extensive evidence for the transformational role of the financial sector in the early industrialisation process of today’s high-income countries. It is important to note that most of this historical evidence is for today’s developed countries.
1.6 Domestic Facts About Finance And Development
Due to a research done by the university of Anambra the result of the and the test of impact of financial development on economic growth in Nigeria during the period 1986 – 2012.To achieve the purpose of this research, we estimated the real GDP as a function of the gross fixed capital formation, financial development (the ratio of private sector credits to GDP), liquidity ratio, and the interest rate. The methods used are: the Ordinary Least Squares (OLS) techniques, Augmented Dickey-Fuller unit root test, Johansen cointegration test, error correction technique, and the Granger causality test. The empirical results revealed that: all the variables used are integrated of the same order, I(1); there is evidence of the existence of a long run relationship among the variables used; the normalized cointegration coefficients revealed that financial development affects economic growth negatively in the long run. However, the short run impact of financial development on economic growth is positive. This goes to show that the finance-led growth hypothesis is valid in Nigeria only in the short run. There is also evidence of stability of both long run and short run relationship between the real GDP and financial development in Nigeria and the adjustment process to restore equilibrium after disturbance is effectively slow (6.50 percent of discrepancies is corrected in each period). Also, causality runs from economic growth to financial development and there is no bi-directional causality between growth and finance which lends support to the demand-leading hypothesis. Based on these findings, the study therefore recommends among other things that: the government should device a means to energise the micro finance sector so as to make credits available and accessible to micro entrepreneurs who are often deprived of credits by the conventional credit markets. This will help boost the private sector development and investment which is the engine of growth.

uzor promise chukwuemerie 2015/203154 said...

LINKAGES BETWEEN FINANCE AND DEVELOPMENT
Studies on the link between finance and economic growth. For example, Johannes et al. (2011) using Johansen cointegration established positive relationships between financial development and economic growth in the long run and short run for Cameroon for the period 1970-2005 for Cameroon at 5%level of significance. This indicates that if the financial sector develops the economy also growth and if the financial sector does not growth the economy will also suffer growth. Unidirectional causality from financial development to economic growth was also found in the long run but not in the short run at 5% level of significance. Financial sector development cause economic growth in the long run and the short run. Economic growth is as a result of financial sector development.
This study unlike some of the previous studies includes control variables such as investment rate, the size of government and openness of the economy. They also investigated the stationary properties of the series to avoid spurious regression or results.
Using panel cointegration analysis Cavenaile et al.(2011) investigated the long run relationship between financial development and economic growth for five developing
countries (Malaysia, Mexico, Nigeria, Philippines and Thailand), for the period 1977- 2007.
From their findings they concluded that there is significant long run relationship between economic growth and financial development. Causality run form financial development to economic growth though evidence was found for weak bidirectional causality.
They concluded that “promoting the development of the financial system may support long run economic growth.” This study unlike some of the previous ones included variables from stock market and the banks to capture the total effect of financial development. This allows for broader discussion of the effect of financial development on economic growth.
Chakraborty and Ghosh (2011) also used panel data for five Asian countries (Thailand, Korea, Indonesia, Malaysia, and the Philippines) for the period 1989-2006 to examine the link and causality between financial development
and economic growth. The results indicated that the series were integrated and are cointegrated.

uzor promise chukwuemerie 2015/203154 said...

INTERLINKAGES BETWEEN FINANCE AND DEVELOPMENT
Earlier studies like Schumpeter, (1911); McKinnon, (1973), Shaw, (1973) note the importance of financial services and the critical role financial intermediaries play in stimulating economic growth (Ugwuanyi, Odo and Ogbonna,2015). Demetriades and Hussein (1996), in their view were not convinced that finance strengthens economic growth rather financial development follows economic growth. Studies by Sajibo and Adekanye (1992) and Nnanna (2004) notes the importance of bank deposits and bank lending behavior in the level of productive investment and output growth in Nigeria. Recent studies revealed that financial sector development has significantly improved the level of economic performance in Nigeria and countries with well developed financial institutions tend to grow faster, especially the size of the banking system and the liquidity of the stock markets tend to have strong positive impact on economic growth. In Nigeria, the link between the financial sector and real sector is still weak to propel the needed economic growth (Victor and Samuel, (2004); Abdulsalam and Ibrahim (2013); Adekunle, Salami and Adedipo, (2013).

GOVERNMENT FINANCING
The proper role of government provides a starting point for the analysis of public finance. In theory, under certain circumstances, private markets will allocate goods and services among individuals efficiently (in the sense that no waste occurs and that individual tastes are matching with the economy's productive abilities). If private markets were able to provide efficient outcomes and if the distribution of income were socially acceptable, then there would be little or no scope for government. In many cases, however, conditions for private market efficiency are violated. For example, if many people can enjoy the same good at the same time (non-rival, non-excludable consumption), then private markets may supply too little of that good. National defense is one example of non-rival consumption, or of a public good.
Public finance is closely connected to issues of income distribution and social equity. Governments can reallocate income through transfer payments or by designing tax systems that treat high-income and low-income households differently.
The public choice approach to public finance seeks to explain how self-interested voters, politicians, and bureaucrats actually operate, rather than how they should operate.

uzor promise chukwuemerie 2015/203154 said...

SOURCES OF GOVERNMENT FINANCING
Government expenditures are financed primarily in three ways:
I Taxes
II Non-tax revenue (revenue from government-owned corporations, sovereign wealth sales of assets, or seigniorage)
III Government borrowing
IV Money creation
Government Revenue Through Taxes
Taxation is the central part of modern public finance. Its significance arises not only from the fact that it is by far the most important of all revenues but also because of the gravity of the problems created by the present day tax burden.[7] The main objective of taxation is raising revenue. A high level of taxation is necessary in a welfare State to fulfill its obligations. Taxation is used as an instrument of attaining certain social objectives i.e. as a means of redistribution of wealth and thereby reducing inequalities. Taxation in a modern Government is thus needed not merely to raise the revenue required to meet its ever-growing expenditure on administration and social services but also to reduce the inequalities of income and wealth. Taxation is also needed to draw away money that would otherwise go into consumption and cause inflation to rise.[8]
A tax is a financial charge or other levy imposed on an individual or a legal entity by a state or a functional equivalent of a state (for example, tribes, secessionist movements or revolutionary movements). Taxes could also be imposed by a subnational entity. Taxes consist of direct tax or indirect tax, and may be paid in money or as corvée labor. A tax may be defined as a "pecuniary burden laid upon individuals or property to support the government [ . . .] a payment exacted by legislative authority."[9] A tax "is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority" and is "any contribution imposed by government [ . . .] whether under the name of toll, tribute, tallage, gabel, impost, duty, custom, excise, subsidy, aid, supply, or other name.
Government revenue from Non-tax

uzor promise chukwuemerie 2015/203154 said...

Government revenue from Non-tax
Debt
Governments, like any other legal entity, can take out loans, issue bonds and make financial investments. Government debt (also known as public debt or national debt) is money (or credit) owed by any level of government; either central or federal government, municipal government or local government. Some local governments issue bonds based on their taxing authority, such as tax increment bonds or revenue bonds.
As the government represents the people, government debt can be seen as an indirect debt of the taxpayers. Government debt can be categorized as internal debt, owed to lenders within the country, and external debt, owed to foreign lenders. Governments usually borrow by issuing securities such as government bonds and bills. Less creditworthy countries sometimes borrow directly from commercial banks or international institutions such as the International Monetary Fund or the World Bank.
Most government budgets are calculated on a cash basis, meaning that revenues are recognized when collected and outlays are recognized when paid. Some consider all government liabilities, including future pension payments and payments for goods and services the government has contracted for but not yet paid, as government debt. This approach is called accrual accounting, meaning that obligations are recognized when they are acquired, or accrued, rather than when they are paid. This constitutes public debt.
Seigniorage
Seigniorage is the net revenue derived from the issuing of currency. It arises from the difference between the face value of a coin or bank note and the cost of producing, distributing and eventually retiring it from circulation. Seigniorage is an important source of revenue for some national banks, although it provides a very small proportion of revenue for advanced industrial countries.
Public finance through state enterprise
Public finance in centrally planned economies has differed in fundamental ways from that in market economies. Some state-owned enterprises generated profits that helped finance government activities. The government entities that operate for profit are usually manufacturing and financial institutions, services such as nationalized healthcare do not operate for a profit to keep costs low for consumers. The Soviet Union relied heavily on turnover taxes on retail sales. Sale of natural resources, and especially petroleum products, were an important source of revenue for the Soviet Union.
In market-oriented economies with substantial state enterprise, such as in Venezuela, the state-run oil company PSDVA provides revenue for the government to fund its operations and programs that would otherwise be profit for private owners. In various mixed economies, the revenue generated by state-run or state-owned enterprises are used for various state endeavors; typically the revenue generated by state and government agencies goes into a sovereign wealth fund. An example of this is the Alaska Permanent Fund and Singapore's Temasek Holdings

uzor promise chukwuemerie 2015/203154 said...

3 DEVELOPMENT FINANCING
Development financing is one of the requirements for sustainable economic growth in any economy. The supply of finance to various sectors of the economy will promote the growth of the economy in a holistic manner and this, will make development, welfare improvement to proceed at a faster rate. The Central Bank of Nigeria development finance initiatives involve the formulation and implementation of various policies, innovation of appropriate products and creation of enabling environment for financial institutions to deliver services in an effective, efficient and sustainable manner. The initiatives are mainly targeted at agricultural sector, rural development and micro, small and medium enterprises.
3.4 SOURCES OF DEVELOPMENT FINANCING
Most of the world's nations lack investment funds that could promote economic development – funds needed to build roads, schools, clinics and factories. As a result, their economies languish and their populations remain poor. In March 2002, the United Nations held an International Conference on Financing for Development to address this problem. The conference focused on six different sources for development funds - domestic resources (such as savings and taxation), foreign direct investment, international trade, international aid, debt relief, and finally systemic reforms. NGOs and others independent voices proposed alternative sources of financing, including especially global taxes and fees. They also asked fundamental questions: who should receive the financing, and for what kind of development? Furthermore, they asked, can poverty be erased if power and wealth are increasingly concentrated in the global economic system? This page contains information on the different ways to mobilize finances for development, and provides information on the international conference on financing for development, its preparation, and follow-up.
International Aid
International aid provides a key element of development financing. For many of the poorest countries, official development assistance (ODA) represents the largest source of external financing. ODA can support a country's education, health, public infrastructure, agricultural and rural development. But only a handful of rich countries meet the UN target of giving 0.7% of their gross national product in international assistance. Further, donors often "tie" aid by requiring that it be spent on exports from the donor. Aid also often has political strings attached and it may be used to promote local business interests of the donor, not the real development needs of the recipient. This page posts articles on these and other aspects of international aid and development.

Debt relief
Debt has been choking the world's weakest economies and blocking economic progress for billions of the world's poorest people. Governments borrowed money in the past for development projects, but often corrupt leaders stole the proceeds. To pay off the interest and principal, governments have been forced by creditors to slash their social spending and shrink their public sector. Even so, the debt burden continues to grow, placing the poorest countries in a kind of debt bondage. Campaigns such as Jubilee 2000 have demanded debt forgiveness, and a few debts have been canceled, but still the debt burden grows larger. This page contains information on the debt crisis and proposals to solve it.

uzor promise chukwuemerie 2015/203154 said...

The financial and economic crisis saw developing and emerging countries experience more severe setbacks in their growth rates than industrialised countries and they did not all have sufficient funds to finance robust stimulus measures. The major emerging economies have nevertheless recovered quickly and are currently the most important growth engines in the world economy.
Private capital flows collapsed, leaving the global South with an overall deficit in financing. Greater official financing flows have not yet been able to compensate for the shortfalls and the slow increase in private capital flows since the end of 2009 has not been able to do so either. Overall, according to the UN, more capital flows from the South to the North than vice versa. The South thus continues to finance the North.
Discussions regarding a reform of the global financial and economic order are ongoing but to date have had little impact on developing countries. The international financing institutions do have more funds at their disposal, but developing countries are still under-represented. The IMF and the World Bank have begun to question some of their previous dogmas. Opinions are divided on whether one can already speak of a new policy.
The efficient channelling of funds and allocation of financial resources are roles expected to be undertaken in the financial system to facilitate productive growth in the real sector of the economy. There have been overlapping roles in the Nigerian financial system and this has resulted to inefficient intermediation and under-development of vibrant sectors of the economy. Thus, necessitated the emergence of development financial institutions to render services to the large un-catered economics agents (especially in the rural areas) by the universal banks. The institutions are expected to offer specialized and micro financial services, offer relative cheap and accessible financing options, provide long-term finance for infrastructure development, industrial growth, agriculture, small and medium enterprises (SME) development and provide financial products for certain sections of the people. However, this paper evaluates the roles and structure of the development financial institutions in Nigeria and also assesses their performance over time.

uzor promise chukwuemerie 2015/203154 said...

REFRENCES
Adekunle, O. A., Salami, G. O., and Adedipe, O. A. (2013). Impact of Financial Sector Development on the Nigerian Economic Growth. American Journal of Business and Management, Vol. 2, No. 4, 347-356.
Adelakun, O. (2010) “Financial Sector Development and Economic Growth in Nigeria”, Department of Economics, Joseph Ayo Babalola University, Osun State, Nigeria.
Aderibigbe J.O (2004). An Overview of the Nigerian Financial System, CBN Bulletin, 28(1).
Agung, F and Ford, J.(1998) “Financial Development Liberalization and Economic Development in Indonesia.1966-1996: Cointegration and Causality of Birmingham”, Department of Economics Discussion Paper, No 98-12.
Beck T, Levine, R. and Loayza, N (2002) “Industry Growth and Capital Allocation: Does Having a Market-or Bank System Matter” Journal of Financial Economics, 64(2):147-80.
Benhabib, J. and Spiegel, M. M. (2000), “Role of Financial Development in Growth and Investment”. Journal of Economic Growth, 5, pp 344-360
Berthelemy, J. C. and Varoudakis, A. (1996). "Economic growth, convergence clubs, and the role of financial development". Oxford Economic Papers, New Series, 48(2): 300-328.
Demirgue Kunt, A. and R. Levine (1996), “Stock Market, Corporate Finance and Economic Growth: An Overview” The World Bank Review, 10(2): 223-239
Dimitris, K. (2004) “Financial Development and Economic Growth: Evidence from panel Unit root and Cointegration test”, Journal of Development Economics 73(2004)55-74.
Dwivedi, D.N (2008). Managerial Economics; New Delhi: Vikas Publishing House. Engle, R.F. & Granger, C.W.J. (1987). Co- integration and Error Correction: Representation, Estimation and Testing. Econometrica 55: 251-276.
Johansen, S. and Juselius, K. (1990). “The full information maximum likelihood procedure for inference oncointegration-with applications to the demand for money”. Oxford Bulletin of Economics andStatistics.52; 169-210.

Ezugwu cynthia chineme 2015/200287 said...

CONCEPT OF FINANCE
Finance is defined in numerous ways by different groups of people. Though it is difficult to give a perfect definition of Finance following selected statements will help you deduce its broad meaning.
1. In General sense,
"Finance is the management of money and other valuables, which can be easily converted into cash."
2. According to Experts,
"Finance is a simple task of providing the necessary funds (money) required by the business of entities like companies, firms, individuals and others on the terms that are most favourable to achieve their economic objectives."
3. According to Entrepreneurs,
"Finance is concerned with cash. It is so, since, every business transaction involves cash directly or indirectly."
4. According to Academicians,
"Finance is the procurement (to get, obtain) of funds and effective (properly planned) utilisation of funds. It also deals with profits that adequately compensate for the cost and risks borne by the business."



1.2 IMPORTANCE OF FINANCE TO A GOVERNMENT
Steady state economic growth:
Government finance is important to achieve sustainable high economic growth rate. The government uses the fiscal tools in order to bring increase in both aggregate demand and aggregate supply. The tools are taxes, public debt, and public expenditure and so on.
Price stability:
The government uses the public finance in order to overcome form inflation and deflation. During inflation it reduces the indirect taxes and genera expenditures but increases direct taxes and capital expenditure. It collects internal public debt and mobilizes for investment. In case of deflation, the policy is just reversed.
Economic stability:
The government uses the fiscal tools to stabilize the economy. During prosperity, the government imposes more tax and raises the internal public debt. The amount is used to repay foreign debt and invention. The internal expenditures are reduced. During recession, the case is just reversed.
Equitable distribution:
The government uses the revenues and expenditures of itself in order to reduce inequality. If there is high disparity it imposes more taxes on income, profit and properties of rich people and on the goods they consume. The money collected is used for the benefit of poor people through subsidies, allowance, and other types of direct and indirect benefits to them.

Ezugwu cynthia chineme 2015/200287 said...

3 STYLIZED GLOBAL AND DOMESTIC FACTS ABOUT FINANCE AND DEVELOPMENT
In Nigeria the usual point of reference is 2020 along with the curious notion of 20-2020 which refers to Nigeria’s aim to join the twenty countries with the largest economies by that date. It is unlikely that Nigeria will leapfrog over more than twenty countries that are ahead of it in the next eleven years. More realistically, we should speak of 2025 as a target year for Nigeria to have made substantial progress towards achieving the Millennium Development Goals (officially slated for 2015), and more pertinently, to have undergone the transformations needed to build a productive economy that can provide remunerative employment for most of its adult citizens.
Over the past ten to fifteen years, Nigeria has made significant progress in certain economic sectors, notably banking, telecommunications, and the airline industry. However, the two sectors for which there is enormous scope, and which can provide the level of employment growth desperately needed, namely agriculture and manufacturing, are weakened by the infrastructural deficiences identified by President Yar’Adua, especially power and transportation.
Building on the achievements of former Governor Bola Tinubu, the major achievements being made by the Administration of Governor Babatunde Fashola are recognized by any regular visitor to Lagos state. Economic transformation and developmental governance are taking place before our very eyes, creating models for emulation by other states in the Federation. Do not be surprised if government officials from other large cities in the world who confront the multiplicity of urban challenges, from Caracas in Venezuela to Cairo in Egypt, soon appear in Lagos to borrow ideas and practices.
Hefound it interesting that President Yar’Adua acknowledged that Nigeria may begin losing potential investors to Angola because of that country’s greater stability and the continuing violence and uncertainty in the Delta region. Just a few weeks ago, I attended a conference in Washington, DC on the Politics of Development and Security in Africa’s Oil States at Johns Hopkins University. Angola was given high marks by a few panelists for the progress being made in the management of its oil industry. One speaker even raised the prospect of Angola making such progress in key economic areas that it could be in line to becoming a “success case”.

AMADIFE GLORY UCHECHI. 2015/203083 ECONOMICS said...

CHAPTER ONE
Introduction
The economic development of any country is dependent on its financial system -- its banks, stock markets, insurance sector, pension funds and a government-run central bank with authority, or at least influence, over currency and interest rates. In developed countries, these two sides of the economic coin work together to promote growth and avoid runaway price inflation. When a country is still in a developing stage, the lack of a strong, sound financial system generally works against the national economy.
Banking Systems
Banks are the cornerstone of a national financial system. Their key services are to provide a safe haven for the earnings of individuals and loans to companies in need of capital, either to start operating or to stay in business. Without this source of available capital, businesses would be hard-pressed to continue growing and returning a profit to their owners and outside investors. By channeling savings into the business sector through loans -- and also offering loans to individuals to buy cars and homes -- banks boost overall economic growth and development.
Financial Markets
Stock markets provide an opportunity for individuals to invest in companies. By issuing shares, public companies pay off debt or raise capital for their operations. The bond market provides another means to raise money. When an individual or an investment company buys a bond, it receives a steady stream of interest payments over a set period. The bond market is accessible to companies as well as governments, which also need a reliable stream of funds to operate. Without the bond market, a government could only raise money by levying taxes, an action that tends to dampen business activity and investment.
Financial Crashes
In any country, confidence and trust in the banking system are crucial to economic health. If banks cannot redeem savings accounts, and savers begin to fear a loss of their money, a bank run results; this quickly drains cash from the bank and can eventually cause the institution to fail. Bond and stock markets rise and fall with the demand for investment; when individuals fear risk or lose their trust in the markets, they sell their securities and cause the value of companies to fall. This, in turn, makes it difficult for businesses to raise money, either from banks or capital markets.
Monetary Policy
Issuing currency and setting interest rates is the function of government-operated central banks, such as the U.S. Federal Reserve, which are responsible for monetary policy. The central bank and the U.S. Treasury "primes the pump" by loaning new money to the banks; by controlling this flow, the central bank also keeps currency exchange rates steady, which is vital for foreign trade and new investment. Setting a higher interest rate tends to support currency value, while lowering the rate encourages lending and investment -- at the risk of currency devaluation and price inflation. Reliable and consistent monetary policy fosters economic stability and growth.



AMADIFE GLORY UCHECHI. 2015/203083 ECONOMICS said...

CHAPTER TWO

The financial sector of an economy comprise of institution, market and regulators that deal in financial instruments under the large framework within which the activities of the various participant are regulated. Put separately, the Nigerian financial system apart from the central bank of Nigeria and some other bodies who serve as a regulators comprises of the "bank financial intermediaries, non-bank financial intermediaries and the financial market" (monogbe, 2015). A whole lots of scholar has written on the topic financial intermediation and how it affect the economic in their respective countries. Intermediation process involve mobilisation of funds from surplus economic unit to the deficit economic unit who has the business ideas but lack financial capacity. This intermediating function is not only restricted to the banking financial institution only. However, non-banking financial institutions like insurance company, pension and administrative institution also intermediate. The term financial intermediation has created a great puzzler in the literature as some authors argue that financial intermediation is a catalyse to economic growth while some opted that financial intermediation is demand following. This argument has degenerate into what we refers to "supply leading hypothesis and demand following hypothesis. The first theory of financial intermediation is seen in the work of goldsmith" (1969). Mackinnon and Shaw attributed the role of economic development to financial market. To them, they argue that the effectiveness of the financial market through the quality and quantity of financial services render will serve as a stimuli to economic development. Hence, there argue that financial intermediation stimulate economic development. Mine while, "Levine (2010), beck, et al (2000) in there empirical research also support the view of MacKinnon and Shaw by stating that financial intermediation has a positive and significant impact on economic development. However in the Nigeria context, Nwaeze (2014) also support the fact that financial intermediation has a positive and significant impact on the Nigeria economic development but did not specify the direction of causality flows. On the other hand however, Robinson (1953) was of the contrary opinion, he led the supply leading hypothesis and argues that economic development is a catalyse to financial development". His born of contention here is that increase in the economic development through increase in the real national income of the economy and per capital income of household in the economy will stimulate the morale of the general public towards new investment ideals which will help in improving the financial market. Furthermore, Mushin and Eric(2008) in there empirical work discovered a causality flow between economic development and financial development with causality flowing from the economy to the financial market hence there conclude that economic development drives financial market.
Consequently in the Nigeria context, there has not really been a justifying ground to conclude whether financial development stimulate economic growth or not. The major challenges intermediation process is facing in Nigeria is the informal sector. Larger percentage of the citizens are yet to be expose to the intermediation services due to lack of trust, confidence and convenience. For financial intermediation to be efficient and glamorous in Nigeria, the three C’s of financial intermediation must be well managed. This study tends to capture the financial system and test how the services in the market drives the economy. However, it must be noted that the Nigeria financial system comprises of financial institution, financial market and the regulators. "The scope of this study is restricted to the banking, non-banking financial institution and the financial market harms of the financial system using granger causality test in identifying the direction of causality flow"


Ezugwu cynthia chineme 2015/200287 said...

LINKAGES AND INTER-LINKAGES BETWEEN FINANCE AND DEVELOPMENT
Different studies by different people on different places and different periods of time got different results of either a unidirectional rel;ationship or bi-directional relationship between finance and development and noticeable are also the system of estimation and proxies used.
A study by Vuranok (2009) on Turkey (1991 -2008) found no significant long run relationship between financial development and economic growth, though one Proxy for financial development which is the ratio of M2 to GDP and GDP were cointegrated at 5% level of significance. That is a development in the financial sector does not influence economic growth in the long run.
There was also no significant causality among the variables under investigation. Financial sector development does not cause economic growth. Economic growth does not result from financial sector development.
This paper follows procedure for time series analysis by examining the stationarity properties, cointegration and causality. This helps to avoid spurious results and makes the results reliable from econometric point of view.
Bangake and Eggoh (2009) also reassessed the link and causality between financial development and economic growth using panel analysis for the period 1960-2004 for developed and developing countries. Evidence was found for statistical significance long run relationship between financial development and economic growths.
There was also bidirectional causality between the variables. The effect of causality was stronger in low income countries than middle and high income countries. Other control variables in the models were government size and openness which were also integrated.
Pradhan (2009) examined the causal nexus between ec
onomic growth and financial development for India (
1993- 2008) using multivariate VAR model and assessing unit roots properties. Evidence was found for statistical significance for long run link. The Granger causality test indicates bidirectional causality between economic growth and financial development proxied by money supply, bank credit.
There was unidirectional causality from financial development (proxied by market capitalization) to economic growth.
Based on the findings Pradhan (2009) concluded that “financial development is considered as the policy variable to enhance economic growth and economic growth could be considered as the policy variable to generate financial development in the economy”. A control variable such as trade was added to the model to avoid bias results.
Burzynska (2009) used Johansen test and Granger causality test in VAR framework to examine long run relationship and causality between financial development and economic growth for China (1978-2005) using time series data and assessing unit root properties.
The results on the cointegration analysis revealed that the variables are cointegrated and that there is significant long run
relationship between financial development and economic growth.

Ezugwu cynthia chineme 2015/200287 said...

SOURCES OF GOVERNMENT FINANCE IN NIGERIA
The money that pays for government operations comes from myriad sources. The first and foremost that many people are aware of personally is taxes. You see them when you buy something, when you pay your annual property tax for your house or property and a number of other ways. However, tax revenue is not the only fundraising governments can engage in. They can also be in the business of selling, borrowing and permitting. . Taxes . The most commonly known government revenue is taxes. These charges come in sizes big and small and no one's exempt from paying them. There are direct taxes such as the ones you see on your paycheck and there are trust contributions such as your required payment to Social Security and Medicare. Consumers are also all too familiar with the everyday point-of-sale charges such as sales taxes and value-added taxes.. Which Tax Is Better? . Different governments put different weight on different taxes. In the United States, the income tax plays a major role and sales tax is left to local governments. Overseas, the point-of-sale charge is the main income driver for government programs. For instance, in Britain, the value-added tax (VAT) can generate up to 50 percent of the same government revenue as that produced by income taxes. So it's an important money source. Combined with duties on imports since Britain is an island geographically, the revenue reaches as much as 66 percent of income taxes. Neither tax is better than the other; instead, governments favor the ones they believe will generate the cash desired consistently.. Licensing . Paying for a permit or license may seem like a tax as well and not much different, but it should be treated as a separate government revenue stream. The reason being is that many licensing and permit programs charge to pay for their particular oversight function. For example, a state Department of Motor Vehicles is supported by the fees it collects on driver's licenses issued. Parks and fish and game programs rely on their permits to stay in business and provide recreation and wildlife protection services for the public. And, more important, many licenses and permit revenues are purpose specific, which, unlike taxes, makes sure they are not used for general purpose spending in a government.. Fees . Various governments also charge fees for things that they produce or take care of for the public. The amount of funding generated by these ventures is nowhere near the amount raised from income taxes, but it can still provide a significant funding source for a particular program. Products frequently include information products such as reports, manuals and guides. However, government sales can also include many fabricated products produced by prison labor, including office furniture, surplus equipment and vehicles no longer needed by agencies..

Abugwu, O'Brian Chimezie Economics Department 2015/198500 said...

CHAPTER ONE
1.0 THE CONCEPTS OF FINANCE AND DEVELOPMENT
1.1 The Concept of Finance
The word finance was originally a French word. In the 18th century, it was adapted by English speaking communities to mean “the management of money.” Since then, it has found a permanent place in the English dictionary. Today, finance is not merely a word else has emerged into an academic discipline of greater significance. Finance is now organized as a branch of Economics. The term "Finance" is a broad term that describes two related activities: the study of how money is managed and the actual process of acquiring needed funds. According to Wikipedia, Finance is a field that is concerned with the allocation (investment) of assets and liabilities (known as elements of the balance statement) over space and time, often under conditions of risk or uncertainty. The same source yet put up another definition of finance as the science of money management. The oxford advanced learner’s dictionary new 8th edition defined the term “finance” in three distinct ways. First, it defined finance as money used to run a business, an activity or a project. Secondly, it defined the term “finance” as the activity of managing money, especially by a government or commercial organization. This second definition agrees with the definition put up by Wikipedia presented above _ the science of money management. The third definition presented by the oxford advanced learner’s dictionary new 8th edition recognizes finance as the money available to a person, an organization or a country; the way this money is managed. An interesting definition put up by Economics terms dictionary sees finance as monetary purchasing power, typically created by a bank or other financial institution, which allows a company, household, or government to spend on major purchases (often on capital assets or other major purchases). From the ongoing, it can be clearly seen that finance as a term has different definitions depending on the point of view of the author. But in this write-up we will define the term “finance” as the money available to a person, household, government, and other organizations (NGOs inclusive), how it is sourced and managed to achieve a defined goal or policy.

Ezugwu cynthia chineme 2015/200287 said...

DEVELOPMENT FINANCE
We need a completely new approach towards financing international development
We have learned a lot in implementing the Millennium Development Goals over the last 15 years. There is a need to go deeper and look at what really drives or enables development if you want transformative change. Again, the European Report on Development highlights six examples of enablers that, if well managed and funded, can promote transformative development – local governance, infrastructure, human capital, green energy technology, biodiversity and trade. These enablers combine economic, social and environmental dimensions.
The Sustainable Development Goals currently being negotiated at the UN in New York are a welcome move in this direction reflecting a more up-to-date, qualitative and (as the name suggests) sustainable approach to development. They target enablers like local governance, human capital, infrastructure, green energy technology and trade and we need to consider how we can best finance them.
Finance alone will not be sufficient to achieve the post-2015 development agenda
Policies also matter. In fact, policies are fundamental. 6 country illustrations were undertaken for the European Report on Development in places where transformative change had occurred and identified a range of specific policies that help to mobilise finance – like regulatory reforms, building administrations, tax reforms and incentives for foreign direct investment.
OTHER FINANCIAL ASPECTS OF DEVELOPMENT
Other financial aspects of development will be highlighted by this project and plan method as is entailed below:
The whole complex of activities in the undertaking that uses resources to gain benefits constitutes the agricultural project. If this definition seems broad, it is intentionally so. As we shall see, the project format can accommodate diverse agricultural endeavors. An enormous variety of agricultural activities may usefully be cast in project form. The World Bank itself lends for agricultural projects as different as irrigation, livestock, rural credit, land settlement, tree crops, agricultural machinery, and agricultural education, as well as for multisectoral rural development projects with a major agricultural component. In agricultural project planning, form should follow analytical content.
We generally think of an agricultural project as an investment activity in which financial resources are expended to create capital assets that produce benefits over an extended period of time. In some projects, however, costs are incurred for production expenses or maintenance from which benefits can normally be expected quickly, usually within about a year. The techniques discussed in this book are equally applicable to estimating the returns from increased current expenditure in both kinds of projects.

Ezugwu cynthia chineme 2015/200287 said...

THE ROLE OF NGOs IN DEVELOPMENT
The main focus for INGOs is to provide relief and developmental aid to developing countries. In relation to states, the purpose of INGOs is to provide services that the state is unable or unwilling to provide for their people. These organization's projects in health, like HIV/AIDS awareness and prevention, clean water, and malaria prevention, and in education, like schools for girls and providing books to developing countries, help to provide the social services that the country's government is unable or unwilling to provide at the time. International Non-governmental Organizations are also some of the first responders to natural disasters, like hurricanes and floods, or crises that need emergency relief.
NGOs in general account for over 15% of total overseas development aid, which is linked to the growth and development process. It has been estimated that aid (partly contributed to by INGOs) over the past thirty years has increased the annual growth rate of the bottom billion by one percent.While one percent in thirty years does not sound like a lot of progress, credit should be given to the fact that progress has been consistently increasing throughout the years instead of remaining stagnant or falling backwards
Many international projects and advocacy initiatives promoted by INGOs encourage sustainable development via a human rights approach and capabilities enhancing approach. INGOS that promote human rights advocacy issues in part try to set up an international judicial standard that respects the rights of every human being and promotes the empowerment of disadvantaged communities.
REFRENCES
Adams, Dale W, Douglas H. Graham, and J. D. Von Pischke, editors. Undermining Rural Development with Cheap Credit. Boulder: Westview Press, 1984
Armendariz de Aghion, Beatriz, “Development Banking,” Journal of Development Economics, Vol. 58, No. l, February 1999, pp. 83-100.
Beck, Thorsten, Ross Levine, and Norman Loayza, “Finance and the Sources of Growth,” Journal of Financial Economics, Vol. 58, No. 1-2, October-November, 2000, pp. 261-300.
Galindo, A.J., Schiantarelli, F. & Weiss, A. (2007). Does financial liberalization improve the allocation of investment? Micro evidence from developing countries. Journal of Development Economics, 83, 562-587.
Giuliano, P. & Ruiz-Arranz, M. (2009). Remittances, financial development, and growth. Journal of Development Economics 90, 144-152. Goldsmith, R.W. (1969). Financial structure and development. Yale University Press, New Haven.
Gurley, J.G. & Shaw, E.S. (1955). Financial aspects of economic development. American Economic Review 45, 515-538.
Habibullah, M.S. & End, Y. (2006). Does financial development cause economic growth? A panel data dynamic analysis for the Asian developing countries. Journal of the Asia Pacific Economy 11, 377-393.
Hicks, J.R. (1969). A Theory of economic history. Oxford University Press, Oxford.
Im, K.S., Lee, J. & Tieslau, M. (2005). Panel LM unit root tests with level shifts, Oxford Bulletin of Economics and Statistics 63, 393-419.

ossai chukwuebuka martins 2015/203963 said...

1.1 CONCEPT OF FINANCE
Finance is a term describing the study and system of money, investments, and other financial instruments. Some people prefer to divide finance into three distinct categories: public finance, corporate finance, and personal finance. There is also the recently emerging area of social finance. Behavioral finance seeks to identify the cognitive (e.g. emotional, social, and psychological) reasons behind financial decisions.
finance includes tax systems, government expenditures, budget procedures, stabilization policy and instruments, debt issues, and other government concerns. Corporate finance involves managing assets, liabilities, revenues, and debts for a business. Personal finance defines all financial decisions and activities of an individual or household, including budgeting, insurance, mortgage planning, savings, and retirement planning.
Public Finance
The federal government helps prevent market failure by overseeing the allocation of resources, distribution of income, and stabilization of the economy. Regular funding for these programs is secured mostly through taxation. Borrowing from banks, insurance companies, and other governments and earning dividends from its companies also help finance the federal government. State and local governments also receive grants and aid from the federal government. Other sources of public finance include user charges from ports, airport services, and other facilities; fines resulting from breaking laws; revenues from licenses and fees, such as for driving; and sales of government securities and bond issues.
Corporate Finance
Businesses obtain financing through a variety of means, ranging from equity investments to credit arrangements. A firm might take out a loan from a bank or arrange for a line of credit. Acquiring and managing debt properly can help a company expand and become more profitable.
Startups may receive capital from angel investors or venture capitalists in exchange for a percentage of ownership. If a company thrives and goes public, it will issue shares on a stock exchange; such initial public offerings (IPO) bring a great influx of cash into a firm. Established companies may sell additional shares or issue corporate bonds to raise money. Businesses may purchase dividend-paying stocks, blue-chip bonds, or interest-bearing bank certificates of deposits (CD); they may also buy other companies in an effort to boost revenue.
For example, in July 2016, newspaper publishing company Gannett, reported net income for the second quarter of $12.3 million, down 77% from $53.3 million during the 2015 second quarter. However, due to acquisitions of North Jersey Media Group and Journal Media Group in 2015, Gannett reported substantially greater circulation numbers in 2016, resulting in a 3% increase in total revenue to $748.8 million for the second quarter
CONCEPT OF DEVELOPMENT
 Development is not purely an economic phenomenon but rather a multi-dimensional process involving reorganization and reorientation of entire economic AND social system
 Development is process of improving the quality of all human lives with three equally important aspects. These are:
 1. Raising peoples’ living levels, i.e. incomes and consumption, levels of food, medical services, education through relevant growth processes
 2. Creating conditions conducive to the growth of peoples’ self-esteem through the establishment of social, political and economic systems and institutions which promote human dignity and respect
 3. Increasing peoples’ freedom to choose by enlarging the range of their choice variables, e.g. varieties of goods and services. For positive development outcomes, both developed and developing countries need to ensure the right policy environment to make the best and most effective use of the resources available to them. For developing countries, these potential resources are growing quickly and so the need to effectively capture and use them is vital if the global community is to achieve the post-2015 Sustainable Development Goals.

Ossai chukwuebuka martins 2015/203963 said...

Public sources of funding include those which are compulsory and pre-paid; meaning paid before the need for care is identified or care is accessed. These are often taxes.
A compulsory source means the government requires some or all people to make the payment, whether they use the health service or not.



Some important distinctions are as follows:
• Direct taxes are those paid by households and companies to the government or other public agencies. This includes income tax, payroll tax (including mandatory social health insurance contributions) and corporate or profit tax.
• Indirect taxes are paid to the government or other public agency via a third party (retailer or supplier). The tax is based on what a household or company spends and includes value-added tax, sales tax, excise tax on alcohol and tobacco and import duties.
• Non-tax revenues are from state-owned companies, including natural resource revenues such as oil and gas.
• Financing from external (foreign) sources is considered ‘public’ when the funds flow through recipient governments.
1 NON GOVERNMENTAL ORGANIZATIONS (NGOs)
A non-governmental organization (NGO) is a non-profit, citizen-based group that functions independently of government. NGOs, sometimes called civil societies, are organized on community, national and international levels to serve specific social or political purposes, and are cooperative, rather than commercial, in nature.
Two broad groups of NGOs are identified by the World Bank:
• Operational NGOs, which focus on development projects.
• Advocacy NGOs, which are organized to promote particular causes.
Certain NGOs may fall under both categories simultaneously.
Examples of NGOs include those that support human rights, advocate for improved health or encourage political participation.
While the term "NGO" has various interpretations, it is generally accepted to include private organizations that operate without government control and that are non-profit and non-criminal. Other definitions further clarify NGOs as associations that are non-religious and non-military.
Some NGOs rely primarily on volunteers, while others support a paid staff.
5.2 HOW NGOS ARE FUNDED
As non-profits, NGOs rely on a variety of sources for funding, including:
• membership dues
• private donations
• the sale of goods and services
• grants
Despite their independence from government, some NGOs rely significantly on government funding. Large NGOs may have budgets in the millions or billions of dollars.
5.3 TYPES OF NGOS
A number of NGO variations exist, including:
• BINGO: business-friendly international NGO (example: Red Cross)
• ENGO: environmental NGO (Greenpeace and World Wildlife Fund)
• GONGO: government-organized non-governmental organization (International Union for Conservation of Nature)
• INGO: international NGO (Oxfam)
• QUANGO: quasi-autonomous NGO (International Organization for Standardization [ISO]

Ossai chukwuebuka martins 2015/203963 said...

Role of NGOs in Development
he essence of non governmental organizations remains the same: to provide basic services to those who need them. Many NGOs have demonstrated an ability to reach poor people, work in inaccessible areas, innovate, or in other ways achieve things better than by official agencies. Many NGOs have close links with poor communities. Some are membership organizations of poor or vulnerable people; others are skilled at participatory approaches. Their resources are largely additional; they complement the development effort of others, and they can help to make the development process more accountable, transparent and participatory. They not only "fill in the gaps" but they also act as a response to failures in the public and private sectors in providing basic services.
Mirroring the support given to northern NGOs, official funding of southern NGOs has taken two forms: the funding of initiatives put forward by southern NGOs, and the utilization of the services of southern NGOs to help donors achieve their own aid objectives.
Donor funding of southern NGOs has received a mixed reception from recipient governments. Clear hostility from many non-democratic regimes has been part of more general opposition to any initiatives to support organizations beyond the control of the state. But even in democratic countries, governments have often resisted moves seen as diverting significant amounts of official aid to non-state controlled initiatives, especially where NGO projects have not been integrated with particular line ministry programs.
Demirgue Kunt, A. and R. Levine (1996), “Stock Market, Corporate Finance and Economic Growth: An Overview” The World Bank Review, 10(2): 223-239
Dimitris, K. (2004) “Financial Development and Economic Growth: Evidence from panel Unit root and Cointegration test”, Journal of Development Economics 73(2004)55-74.
Dwivedi, D.N (2008). Managerial Economics; New Delhi: Vikas Publishing House. Engle, R.F. & Granger, C.W.J. (1987). Co- integration and Error Correction: Representation, Estimation and Testing. Econometrica 55: 251-276.
Johansen, S. and Juselius, K. (1990). “The full information maximum likelihood procedure for inference oncointegration-with applications to the demand for money”. Oxford Bulletin of Economics andStatistics.52; 169-210.
Johnston, R.B. and SundararaJan, V. (1999). “Sequencing Financial Sector Reforms: Country Experience and Issues”. IMF Washington DC. King, R.G., & Levine, R., (1993). Finance and Growth, Journal of Economics, 108, 717-737.
Levine, Ross, and Sara, Zeros, (1996) "Stock Market Development and Long-run Economic Growth" The World Bank Review 10(2).
Levine, R. (2004) “Finance and Growth”, University of Minnesota. Lucas, R. (1988)" On the Mechanics of Economic Development" Journal of Monetary Economics, 22 (1) pp342.
Levine, R. and Renelt, D. (1992) "Sensitivity Analysis of Cross- Country Growth Regression"American Economic Review, 82(4) pp942-63

UGWOKE WILLIAMS IKECHUKWU. 2015/204045. ECONOMICS said...

CHAPTER ONE
DISCUSS THE CONCEPT OF FINANCE AND DEVELOPMENT USING GLOBAL AND DOMESTIC STYLIZED FACTS
THE CONCEPT OF FINANCE
FINANCE is a field that is concerned with the allocation (investment) of assets and liabilities (known as elements of the balance statement) over space and time, often under conditions of risk or uncertainty. Finance can also be defined as the science of money management. Market participants aim to price assets based on their risk level, fundamental value, and their expected rate of return. Finance can be broken into three sub-categories: public finance, corporate finance and personal finance.
PUBLIC FINANCE
Public finance describes finance as related to sovereign states and sub-national entities (states/provinces, counties, municipalities, etc.) and related public entities (e.g. school districts) or agencies. It usually encompasses a long-term strategic perspective regarding investment decisions that affect public entities. These long-term strategic periods usually encompass five or more years. Public finance is primarily concerned with:
• Identification of required expenditure of a public sector entity
• Source(s) of that entity's revenue
• The budgeting process
• Debt issuance (municipal bonds) for public works projects
FINANCIAL THEORY
Financial economics is the branch of economics studying the interrelation of financial variables, such as prices, interest rates and shares, as opposed to goods and services. Financial economics concentrates on influences of real economic variables on financial ones, in contrast to pure finance. It centres on managing risk in the context of the financial markets, and the resultant economic and financial models. It essentially explores how rational investors
rational investors would apply risk and return to the problem of an investment policy. Here, the twin assumptions of rationality and market efficiency lead to modern portfolio theory (the CAPM), and to the Black–Scholes theory for option valuation; it further studies phenomena and models where these assumptions do not hold, or are extended. "Financial economics", at least formally, also considers investment under "certainty" (Fisher separation theorem, "theory of investment value", Modigliani–Miller theorem) and hence also contributes to corporate finance theory. Financial econometrics is the branch of financial economics that uses econometric techniques to parameterize the relationships suggested.
Although they are closely related, the disciplines of economics and finance are distinct. The “economy” is a social institution that organizes a society’s production, distribution, and consumption of goods and services, all of which must be financed.
Financial mathematics
Financial mathematics is a field of applied mathematics, concerned with financial markets. The subject has a close relationship with the discipline of financial economics, which is concerned with much of the underlying theory that is involved in financial mathematics. Generally, mathematical finance will derive, and extend, the mathematical or numerical models suggested by financial economics. In terms of practice, mathematical finance also overlaps heavily with the field of computational finance (also known as financial engineering). Arguably, these are largely synonymous, although the latter focuses on application, while the former focuses on modelling and derivation (see: Quantitative analyst). The field is largely focused on the modelling of derivatives, although other important subfields include insurance mathematics and quantitative portfolio problems. See Outline of finance: Mathematical tools; Outline of finance: Derivatives pricing.

UGWOKE WILLIAMS IKECHUKWU. 2015 /204045. ECONOMICS said...

Development has traditionally meant achieving sustained rates of growth of income per capita to enable a nation to expand its output at a rate faster than the growth rate of its population. Levels and rates of growth of “real” per capita gross national income (GNI) (monetary growth of GNI per capita minus the rate of inflation) are then used to measure the overall economic well-being of a population—how much of real goods and services is available to the average citizen for consumption and investment. Economic development in the past has also been typically seen in terms of the planned alteration of the structure of production and employment so that agriculture’s share of both declines and that of the manufacturing and service industries increases. Development strategies have therefore usually focused on rapid industrialization, often at the expense of agriculture and rural development. With few exceptions, such as in development policy circles in the 1970s, development was until recently nearly always seen as an economic phenomenon in which rapid gains in overall and per capita GNI growth would either “trickle down” to the masses in the form of jobs and other economic opportunities or create the necessary conditions for the wider distribution of the economic and social benefits of growth. Problems of poverty, discrimination, unemployment, and income distribution were of secondary importance to “getting the growth job done.” Indeed, the emphasis is often on increased output, measured by gross domestic product (GDP).
Global and domestic stylized facts on development
Financing for development is focused on new stakeholders in the financing of development cooperation. This is one of the most important UN approaches to supporting poor countries' financing of development and poverty reduction ¬- a necessity when official development assistance is no longer sufficient. The world is moving forward in many different areas, but to achieve the Global Goals for Sustainable Development, which define a sustainable world free from extreme poverty, we must mobilize resources from many different sources other than traditional state aid. The concept of "Financing for Development" was first adopted at a UN conference in Mexico in 2002. Today's development financing is primarily concerned with the financing of the Global Goals for Sustainable Development in low-income countries. When working with these goals, development financing plays a far more important role than in the previous work on the Millennium Development Goals. Financing for development is one of the most important UN approaches to support poor countries' financing of their development and the fight against poverty. The idea is to identify and coordinate new actors that can contribute to development both financially and with their expertise and competence. In order to reach the enormous sums that are required for a truly sustainable development, both private and public capital flows, other than official development assistance, must be involved. We need to engage actors such as banks, insurance companies and private donors while also working to develop tax systems in developing countries, which in many ways represent a huge potential resource. Official development assistance (ODA) remains the basis for the financing of development cooperation with development financing as a supplement. Sweden is working for all rich countries to live up to the agreement to designate at least 0.7 per cent of their gross national income (GNI) to development cooperation. At present, only a few countries meet this goal, among them Sweden. When traditional aid is combined with development financing there is an increase in total resources and also the probability of eradicating poverty. In several countries, including Germany, the UK and the Netherlands, financing for development is gradually being integrated into development cooperation. The supranational organization OECD as well as private and philanthr

UGWOKE WILLIAMS IKECHUKWU. 2015/204045. ECONOMICS said...

CHAPTER TWO
DO A CRITICAL ANALYSIS OF THE LINKAGES AND INTER-LINKAGES BETWEEN FINANCE AND DEVELOPMENT
How does the structure and growth of the financial sector in a country affect the growth and development of its economy? How is the rural economy affected by improved access to financial services? What are the results of the new emphasis on improving the access of the poor to microfinance services? An explosion of empirical research in recent years provides new information that I use in this survey paper to address these issues. Many of the publications cited concerning the cross-country analysis of financial systems were based on the analysis of new multi-country data sets recently created covering the period 1960 to 1997.1 A recent AID conference on rural finance also provided important information summarizing the state of the art.
Questions about the relationship between finance and economic development
How have economists’ views evolved over time regarding the relationship between the financial system and growth?
Historically, economists have held strikingly different views about the importance of the financial system for economic growth (Levine, 1997). On the one hand, John Hicks argued that it played a critical role in England’s industrialization, while Joseph Schumpeter reasoned that well-functioning banks spurred technological innovation by identifying and funding the most innovative entrepreneurs. On the other hand, Joan Robinson felt that where enterprise led, then finance would follow. Levine observed that the pioneers of development economics often did not even mention finance in their work. Gurley and Shaw (1960) identified contributions that finance makes to the economy and Patrick (1966) observed that some countries pursued supply-leading policies which were intended to accelerate growth by expanding the financial system. Goldsmith (1969) is credited with being the first to document the growth in financial activities that occurs with overall growth in the economy, but he hesitated to conclude the direction of causality: Were financial factors responsible for accelerating economic development or did financial development reflect economic growth? Shaw (1973) and McKinnon (1973) were the first to describe how controls and regulations contributed to financial repression, which negatively affects economic growth. Their models were narrowly focused on money, although their descriptive narratives were broader. For example, McKinnon noted the importance of finance by using the example of technology adoption by farmers. He thought economic growth would be slowed without efficient finance because it would be virtually impossible for farmers to self-finance the needed investment to speedily adopt new technologies. Wachtel (2001) noted that McKinnon forcefully argued for financial liberalization and, by 1990, concluded that “there is widespread agreement that flows of saving and investment should be voluntary and significantly decentralized in an open capital market at close to equilibrium interest rates”
Moving beyond money, Levine (1997) developed a comprehensive theoretical framework to explain how finance broadly defined can be conceptually linked to growth. This framework was used to organize his discussion regarding the explosion of research that emerged in the 1990s. The starting point is that financial markets and institutions may arise to ameliorate problems created by information and transaction frictions. Financial systems serve the primary function of facilitating the allocation of resources across space and time in an uncertain environment. These financial functions are expected to affect economic growth through capital accumulation and technological innovation. Levine’s framework helped guide subsequent empirical research that tested the relationship between finance and growth. Defined in this way, these functions help to justify the view that the financial sector operates like the “brain of the economy” (W

UGWOKE WILLIAMS IKECHUKWU. 2015/204045. ECONOMICS said...

Does the impact of finance vary by size or type of firm or industry?
Firms finance themselves in various ways. Some use more external finance than others so the banking structure can have a greater impact on them. Rajan and Zingales (1998) classified firms in 36 manufacturing sectors in more than 40 countries according to their use of external finance as reflected in U.S firms. They concluded that industries more dependent on external finance grow faster in more financially developed countries. The effect of financial development occurs mostly through growth in the number of establishments rather than through growth in average size of establishment.
Cetorelli and Gambera (2001) extended that analysis to test how measures of bank concentration affect the growth of firms. Their results revealed that industries in which young firms are more dependent on external finance grow faster in those countries in which the banking system is more concentrated. The depressive effect of banking concentration on growth, therefore, may be offset by the positive effect on specific industries. If these results are found to be robust under additional testing, the implication is that there is no optimum banking market structure. Banking can have an impact on technological progress if it facilitates credit access to younger firms that are more likely to introduce innovative technologies. In this way the banking market structure may actually contribute to shaping industrial structure and the cross-industry size distribution of firms by providing finance to firms that grow more quickly.
Although efficient legal and financial systems can be a significant determinant of the financing of firms, it is not clear which aspects of financial and legal development are most significant and how they affect firms of different sizes. Beck, Demirguc-Kunt and Maksimovic (2002) used data from a sample of over 4,000 firms in 54 countries to test if the firms’ responses to questions of perceived constraints in fact affect growth, measured by growth in firm sales, and if the effect was different by sizes of firms.5 The survey provided “information on whether collateral requirements, bank bureaucracies, the need to have special connections with banks, high interest rates, lack of money in the banking system, and access to different types of financing are troubling enough issues for firms to report as constraints” (p. 6). The firms were asked their opinions about what they find particularly constraining about the legal system and most troubling about corruption. Small firms reported the highest financial and corruption constraints and the largest firms reported the highest legal constraints.

UGWOKE WILLIAMS IKECHUKWU. 2015/204045. ECONOMICS said...

CHAPTER THREE
DISCUSS GOVERNMENT FINANCING, ITS SOURCES AND DISCUSS DEVELOPMENT FINANCING IN NIGERIA AND THEIR SOURCES
OVERVIEW OF GOVERNMENT FINANCING
The proper role of government provides a starting point for the analysis of public finance. In theory, under certain circumstances, private markets will allocate goods and services among individuals efficiently (in the sense that no waste occurs and that individual tastes are matching with the economy's productive abilities). If private markets were able to provide efficient outcomes and if the distribution of income were socially acceptable, then there would be little or no scope for government. In many cases, however, conditions for private market efficiency are violated. For example, if many people can enjoy the same good at the same time (non-rival, non-excludable consumption), then private markets may supply too little of that good. National defence is one example of non-rival consumption, or of a public good. "Market failure" occurs when private markets do not allocate goods or services efficiently. The existence of market failure provides an efficiency-based rationale for collective or governmental provision of goods and services. Externalities, public goods, informational advantages, strong economies of scale, and network effects can cause market failures. Public provision via a government or a voluntary association, however, is subject to other inefficiencies, termed "government failure." Under broad assumptions, government decisions about the efficient scope and level of activities can be efficiently separated from decisions about the design of taxation systems (Diamond-Mirlees separation). In this view, public sector programs should be designed to maximize social benefits minus costs (cost-benefit analysis), and then revenues needed to pay for those expenditures should be raised rational investors would apply risk and return to the problem of an investment policy. Here, the twin assumptions of rationality and market efficiency lead to modern portfolio theory (the CAPM), and to the Black–Scholes theory for option valuation; it further studies phenomena and models where these assumptions do not hold, or are extended. "Financial economics", at least formally, also considers investment under "certainty" (Fisher separation theorem, "theory of investment value", Modigliani–Miller theorem) and hence also contributes to corporate finance theory. Financial econometrics is the branch of financial economics that uses econometric techniques to parameterize the relationships suggested.
Although they are closely related, the disciplines of economics and finance are distinct. The “economy” is a social institution that organizes a society’s production, distribution, and consumption of goods and services, all of which must be financed.
Financial mathematics
Financial mathematics is a field of applied mathematics, concerned with financial markets. The subject has a close relationship with the discipline of financial economics, which is concerned with much of the underlying theory that is involved in financial mathematics. Generally, mathematical finance will derive, and extend, the mathematical or numerical models suggested by financial economics. In terms of practice, mathematical finance also overlaps heavily with the field of computational finance (also known as financial engineering). Arguably, these are largely synonymous, although the latter focuses on application, while the former focuses on modelling and derivation (see: Quantitative analyst). The field is largely focused on the modelling of derivatives, although other important subfields include insurance mathematics and quantitative portfolio problems. See Outline of finance: Mathematical tools; Outline of finance: Derivatives pricing.
Government financing is the study of the means the government finances its projects in the economy. Government finance is the branch of economics which assesses the government revenue and go

UGWOKE WILLIAMS IKECHUKWU. 2015/204045. ECONOMICS said...

Sources of finance
Government expenditures are financed primarily in three ways:
• Government revenue
o Taxes
o Non-tax revenue (revenue from government-owned corporations, sovereign wealth funds, sales of assets, or seigniorage)
• Government borrowing
• Money creation.
Taxes
Taxation is the central part of modern public finance. Its significance arises not only from the fact that it is by far the most important of all revenues but also because of the gravity of the problems created by the present day tax burden.[7] The main objective of taxation is raising revenue. A high level of taxation is necessary in a welfare State to fulfill its obligations. Taxation is used as an instrument of attaining certain social objectives i.e. as a means of redistribution of wealth and thereby reducing inequalities. Taxation in a modern Government is thus needed not merely to raise the revenue required to meet its ever-growing expenditure on administration and social services but also to reduce the inequalities of income and wealth. Taxation is also needed to draw away money that would otherwise go into consumption and cause inflation to rise.[8]
A tax is a financial charge or other levy imposed on an individual or a legal entity by a state or a functional equivalent of a state (for example, tribes, secessionist movements or revolutionary movements). Taxes could also be imposed by a subnational entity. Taxes consist of direct tax or indirect tax, and may be paid in money or as corvée labor. A tax may be defined as a "pecuniary burden laid upon individuals or property to support the government [ . . .] a payment exacted by legislative authority."[9] A tax "is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority" and is "any contribution imposed by government [ . . .] whether under the name of toll, tribute, tallage, gabel, impost, duty, custom, excise, subsidy, aid, supply, or other name."[10]
• There are various types of taxes, broadly divided into two heads – direct (which is proportional) and indirect tax (which is differential in nature):
• Stamp duty, levied on documents
• Excise tax (tax levied on production for sale, or sale, of a certain good)
• Sales tax (tax on business transactions, especially the sale of goods and services)
o Value added tax (VAT) is a type of sales tax
o Services taxes on specific services
• Road tax; Vehicle excise duty (UK), Registration Fee (USA), Regco (Australia), Vehicle Licensing Fee (Brazil) etc.
• Gift tax
• Duties (taxes on importation, levied at customs)
• Corporate income tax on corporations (incorporated entities)
• Wealth tax
• Personal income tax (may be levied on individuals, families such as the Hindu joint family in India, unincorporated associations, etc.)
Debt
Governments, like any other legal entity, can take out loans, issue bonds and make financial investments. Government debt (also known as public debt or national debt) is money (or credit) owed by any level of government; either central or federal government, municipal government or local government. Some local governments issue bonds based on their taxing authority, such as tax increment bonds or revenue bonds.
As the government represents the people, government debt can be seen as an indirect debt of the taxpayers. Government debt can be categorized as internal debt, owed to lenders within the country, and external debt, owed to foreign lenders. Governments usually borrow by issuing securities such as government bonds and bills. Less creditworthy countries sometimes borrow directly from commercial banks or international institutions such as the International Monetary Fund or the World Bank.
Most government budgets are calculated on a cash basis, meaning that revenues are recognized when collected and outlays are recognized when paid. Some consider all government liabilities, including future pension payments and payments for goods and services the government has contracted foggy

UGWOKE WILLIAMS IKECHUKWU. 2015/204045. ECONOMICS said...

CHAPTER FOUR
DISCUSS OTHER FINANCIAL ASPECTS OF DEVELOPMENT
BORROWING
Governments, like any other legal entity, can take out loans, issue bonds and make financial investments. Government debt (also known as public debt or national debt) is money (or credit) owed by any level of government; either central or federal government, municipal government or local government. Some local governments issue bonds based on their taxing authority, such as tax increment bonds or revenue bonds.
As the government represents the people, government debt can be seen as an indirect debt of the taxpayers. Government debt can be categorized as internal debt, owed to lenders within the country, and external debt, owed to foreign lenders. Governments usually borrow by issuing securities such as government bonds and bills. Less creditworthy countries sometimes borrow directly from commercial banks or international institutions such as the International Monetary Fund or the World Bank.
Most government budgets are calculated on a cash basis, meaning that revenues are recognized when collected and outlays are recognized when paid. Some consider all government liabilities, including future pension payments and payments for goods and services the government has contracted for but not yet paid, as government debt. This approach is called accrual accounting, meaning that obligations are recognized when they are acquired, or accrued, rather than when they are paid. This constitutes public debt.
SEIGNIORAGE
Seigniorage is the net revenue derived from the issuing of currency. It arises from the difference between the face value of a coin or bank note and the cost of producing, distributing and eventually retiring it from circulation. Seigniorage is an important source of revenue for some national banks, although it provides a very small proportion of revenue for advanced industrial countries.
Government expenditures
Economists classify government expenditures into three main types. Government purchases of goods and services for current use are classed as government consumption. Government purchases of goods and services intended to create future benefits – such as infrastructure investment or research spending – are classed as government investment. Government expenditures that are not purchases of goods and services, and instead just represent transfers of money – such as social security payments – are called transfer payments.
Government operations
Government operations are those activities involved in the running of a state or a functional equivalent of a state (for example, tribes, secessionist movements or revolutionary movements) for the purpose of producing value for the citizens. Government operations have the power to make, and the authority to enforce rules and laws within a civil, corporate, religious, academic, or other organization or group.
Income distribution
• Income distribution – Some forms of government expenditure are specifically intended to transfer income from some groups to others. For example, governments sometimes transfer income to people that have suffered a loss due to natural disaster. Likewise, public pension programs transfer wealth from the young to the old. Other forms of government expenditure which represent purchases of goods and services also have the effect of changing the income distribution. For example, engaging in a war may transfer wealth to certain sectors of society. Public education transfers wealth to families with children in these schools. Public road construction transfers wealth from people that do not use the roads to those people that do (and to those that build the roads).
• Income Security
• Employment insurance
• Health Care
• Public financing of campaigns.
The legal origins puts forward the idea that common law based systems, are better suited than civil law based systems, for the development of capital markets. This is because civil law evolved to protect private property from the authority while

ASSINYA FLORA NYON 2015/203473 said...

STYLIZED FACTS ABOUT FINANCE AND DEVELOPMENT IN NIGERIA AND THE GLOBE
Agric Credit Guarantee Scheme:
The Agricultural Credit Guarantee Scheme (ACGS) was established in 1977, under the management of the Central Bank of Nigeria. The scheme was designed to encourage banks to increase lending to the agricultural sector by providing guarantee against inherent risks. Federal Ministry of Finance:
The Federal Ministry of Finance (FMF) advises the Federal Government on its fiscal operations and collaborates with the Central Bank of Nigeria (CBN) on monetary matters. Before 1991, the responsibility for the supervision and licensing of banks was shared between FMF and CBN until 1991 when CBN became the sole authority.
BOFIA:
In 1991, the Bank s and Other Financial Institutions Act (BOFIA) formerly BOFI was promulgated to replace the CBN Act of 1958 and the Banking Decree of 1969 (including later amendments). The policy brought the non-bank financial intermediaries under the supervision of Central Bank of Nigeria. International Monetary Fund:
The International Monetary Fund was established in 1945 to promote the health of the world economy with 29 countries sigining the Articles of Agreement. Nigeria joined the IMF in 1961,which now has 184 members with its headquarters in Washington D.C., USA.
Central Banking:
The earliest known bank of issue is the Riksbank of Sweden (1656). Modern central banking started with Bank of England (1694). Central Bank of Nigeria began operations in 1959. London Club of Creditors:
These are mainly uninsured and unguaranteed debts extended by commercial banks to nationals of debtor nations. Members of the club are commercial banks mainly in industrialized countries. The first London club meeting was held in 1976 to discuss re-payment and conclude re-structuring agreements.

UGWOKE WILLIAMS IKECHUKWU. 2015/204045. ECONOMICS said...

CHAPTER FIVE
CRITICALLY DISCUSS THE CONCEPT OF NON GOVERNMENTAL ORGANISATIO (NGO) AND THEIR IMPACT ON DEVELOPMENT
A non-governmental organization (NGO) is a non-profit, citizen-based group that functions independently of government. NGOs, sometimes called civil societies, are organized on community, national and international levels to serve specific social or political purposes, and are cooperative, rather than commercial, in nature. Non-governmental organizations (NGOs) are high-profile actors in the field of international development, both as providers of services to vulnerable individuals and communities and as campaigning policy advocates. This book provides a critical introduction to the wide-ranging topic of NGOs and development. Written by two authors with more than 20 years’ experience each of research and practice in the field, the book combines a critical overview of the main research literature with a set of up-to-date theoretical and practical insights drawn from experience in Asia, Europe, Africa and elsewhere.
Two broad groups of NGOs are identified by the World Bank:
• Operational NGOs, which focus on development projects.
• Advocacy NGOs, which are organized to promote particular causes.
Certain NGOs may fall under both categories simultaneously. Examples of NGOs include those that support human rights, advocate for improved health or encourage political participation.
While the term "NGO" has various interpretations, it is generally accepted to include private organizations that operate without government control and that are non-profit and non-criminal. Other definitions further clarify NGOs as associations that are non-religious and non-military. Some NGOs rely primarily on volunteers, while others support a paid staff.
How NGOs are Funded
As non-profits, NGOs rely on a variety of sources for funding, including:
• membership dues
• private donations
• the sale of goods and services
• grants
Despite their independence from government, some NGOs rely significantly on government funding. Large NGOs may have budgets in the millions or billions of dollars.
Types of NGOs
A number of NGO variations exist, including:
• BINGO: business-friendly international NGO (example: Red Cross)
• ENGO: environmental NGO (Greenpeace and World Wildlife Fund)
• GONGO: government-organized non-governmental organization (International Union for Conservation of Nature)
• INGO: international NGO (Oxfam)
• QUANGO: quasi-autonomous NGO (International Organization for Standardization [ISO])

ASSINYA FLORA NYON 2015/203473 said...

SOURCES OF GOVERNMENT FINANCING
The sources of fund for the government are:
Tax revenue is the income that is gained by governments through taxation. Taxation is the primary source of income for a state. Revenue may be extracted from sources such as individuals, public enterprises, trade, royalties on natural resources and/or foreign aid. An inefficient collection of taxes is greater in countries characterized by poverty, a large agricultural sector and large amounts of foreign aid.
Just as there are different types of tax, the form in which tax revenue is collected also differs; furthermore, the agency that collects the tax may not be part of central government, but may be a third party licensed to collect tax which they themselves will use. For example, in the Nigeria the Driver and Vehicle Licensing Agency (DVLA) collects vehicle excise duty, which is then passed onto HM Treasury.[2]
Tax revenues on purchases come in two forms: "tax" itself is a percentage of the price added to the purchase (such as sales tax in Nigeria, or VAT in the UK), while "duties" are a fixed amount added to the purchase price (e.g., for cigarettes).[3] In order to calculate the total tax raised from these sales, we must work out the effective tax rate multiplied by the quantity supplied.
• The non-tax revenue can take the form of Aid from another level of government (intragovernmental aid): in the United States, federal grants may be considered non-tax revenue to the receiving states, and equalization payments
• Aid from abroad (foreign aid)
• Tribute or indemnities paid by a weaker state to a stronger one, often as a condition of peace after suffering military defeat. The war reparations paid by the defeated Central Powers after the First World War offer a well-known example.
• Loans, or other borrowing, from monetary funds and/or other governments
• Revenue from state-owned enterprises (for example, revenue from Public Sector Unions)
• Revenue (including interest or profit) from investment funds (collective investment schemes), sovereign wealth funds, or endowments
• Revenues from sales of state assets
• Rents, concessions, and royalties collected by the state when it contracts out the right to profit from some good or service to a private corporation. An example are contracts for resource extraction (for such natural resources as minerals, timber, petroleum and natural gas, or marine resources) collected privately under license from state-owned lands
• Fines collected and assets forfeitured as a penalty. Examples include parking fines, court costs levied on criminal offenders
• Fees for the granting or issuance of permits or licenses. Examples include vehicle registration plate permits, vehicle registration fees, watercraft registration fees, building fees, driver's licenses, hunting and fishing licenses, fees for professional licensing, fees for visas or passports, fees for demolition, rezoning, and land grading (which causes silt), and sometimes for increasing stormwater runoff, destroying native vegetation, and cutting-down healthy trees.
• User fees collected in exchange for the use of many public services and facilities. Tolls charged for the use of toll roads are an example
• Donations and voluntary contributions to the state

UKADIKE, UCHECHUKWU GLORY; 2015/198882 ECONOMICS said...

THE CONCEPT OF FINANCE AND DEVELOPMENT USING GLOBAL & DOMESTIC STYLISED FACTS

1.0 The Importance of Finance.
The financial sector provides six major functions that are important both at the firm level and at the level of the economy as a whole.
1. Providing payment services: It is inconvenient, inefficient, and risky to carry around enough cash to pay for purchased goods and services. Financial institutions provide an efficient alternative. The most obvious examples are personal and commercial checking and check-clearing and credit and debit card services; each is growing in importance, in the modern sectors at least, even in low-income countries.

2. Matching savers and investors: Although many people save, such as for retirement, and many have investment projects, such as building a factory or expanding the inventory carried by a family microenterprise, it would be only by the wildest of coincidences that each investor saved exactly as much as needed to finance a given project. Therefore, it is important that savers and investors somehow meet and agree on terms for loans or other forms of finance. This can occur without financial institutions; even in highly developed markets, many new entrepreneurs obtain a significant fraction of their initial funds from family and friends. However, the presence of banks, and later venture capital or stock markets, can greatly facilitate matching in an efficient manner. Small savers simply deposit their savings and let the bank decide where to invest them.

3. Generating and distributing information. From a society wide viewpoint, one of the most important functions of the financial system is to generate and distribute information. Stock and bond prices in the daily newspapers of developing countries (and increasingly on the Internet as well) are a familiar example; these prices represent the average judgment of thousands, if not millions, of investors, based on the information they have available about these and all other investments. Banks also collect information about the firms that borrow from them; the resulting information is one of the most important components of the “capital” of a bank, although it is often unrecognized as such. In these regards, it has been said that financial markets represent the “brain” of the economic system.

ASSINYA FLORA NYON 2015/203473 said...

ROLE OF NGOs IN DEVELOPMENT
Neoliberalism is a dominant ideology being pushed around the world today spearheaded by the United States and various other nations, and known as the Washington Consensus.
One of the many aspects of this ideology is to minimize the role of the state in things like health and education; NGOs and other organizations receive funding as an alternative to the state.
There is a good deal of evidence, Robbins says, that NGOs are growing because of increased amounts of public funding. (p. 129)
However, the neoliberal ideology and its policies have also come under much criticism in recent years around the world, including mass protests in many countries, because of their social impacts, sometimes devastating.
As a result, a number of alternative, grassroots type of NGOs have grown in both developed and developing countries campaigning and researching issues related to globalization, social justice, the environment and so forth. These are independent of government aid. However, NGOs not dependent on state aid are the exception rather than the rule as Robbins also adds (p. 129).
ome have observed that in a way then, the complex group termed NGOs are seen as the weaker part of a triumvirate, or third sector to counter the other two actors, the state and the market.
REFRENCES
Levine, R. and Renelt, D. (1992) "Sensitivity Analysis of Cross- Country Growth Regression"American Economic Review, 82(4) pp942-63.
Liang, Q. and Teng, J. (2006) “Financial Growth and Economic Development: Evidence from China”, China Economic Review. 17(4).395-411.
Levine, R.(1991) “Stock Markets, Growth and Tax Policy”, The Journal of Finance 46, 1445-1465.
Maduka, A. and Onwuka, K. (2012) “Financial Market and Economic Growth: Evidence from Nigeria Data”, Department of Economics, Anambra State University-Uli.
Dwivedi, D.N (2008). Managerial Economics; New Delhi: Vikas Publishing House. Engle, R.F. & Granger, C.W.J. (1987). Co- integration and Error Correction: Representation, Estimation and Testing. Econometrica 55: 251-276.
Johansen, S. and Juselius, K. (1990). “The full information maximum likelihood procedure for inference oncointegration-with applications to the demand for money”. Oxford Bulletin of Economics andStatistics.52; 169-210.
Johnston, R.B. and SundararaJan, V. (1999). “Sequencing Financial Sector Reforms: Country Experience and Issues”. IMF Washington DC. King, R.G., & Levine, R., (1993). Finance and Growth, Journal of Economics, 108, 717-737.

UKADIKE, UCHECHUKWU GLORY; 2015/198882 ECONOMICS said...

4. Allocating credit efficiently: Channelling investment funds to uses yielding the highest rate of return allows increases in specialization and the division of labour, which have been recognized since the time of Adam Smith as a key to the wealth of nations.

5. Pricing, pooling, and trading risks: Insurance markets provide protection against risk, but so does the diversification possible in stock markets or in banks’ loan syndications.

6. Increasing asset liquidity: Some investments are very long-lived; in some cases—a hydroelectric plant, for example—such investments may last a century or more. Sooner or later, investors in such plants are likely to want to sell them. In some cases, it can be quite difficult to find a buyer at the time one wishes to sell—at retirement, for instance. Financial development increases liquidity by making it easier to sell, for example, on the stock market or to a syndicate of banks or insurance companies.

1.1 Differences between Developed and Developing-Country Financial Systems
In more developed nations, monetary and financial policy plays a major direct and indirect role in governmental efforts designed to expand economic activity in times of unemployment and surplus capacity and to contract that activity in times of excess demand and inflation.5 Basically, monetary policy works on two principal economic variables: the aggregate supply of money in circulation and the level of interest rates. Expressed in traditional terms, the money supply (currency plus commercial bank demand deposits) is thought to be directly related to the level of economic activity in the sense that a greater money supply induces expanded economic activity by enabling people to purchase more goods and services. This in essence is the monetarist theory of economic activity. Its advocates argue that by controlling the growth of the money supply, governments of developed countries can regulate their nations’ economic activity and control inflation.
On the other side of the monetary issue, again expressed in traditional terms, are the Keynesian economists, who argue that an expanded supply of money in circulation increases the availability of loanable funds. A supply of loanable funds in excess of demand leads to lower interest rates. Because private investment is assumed to be inversely related to prevailing interest rates, businesspeople will expand their investments as interest rates fall and credit becomes more available. More investment in turn raises aggregate demand, leading to a higher level of economic activity (more employment and a higher GDP). Similarly, in times of excess aggregate demand and inflation, governments pursue restrictive monetary policies designed to curtail the expansion of aggregate demand by reducing the growth of the national money supply, lowering the supply of loanable funds, raising interest rates, and thereby inducing a lower level of investment and, it is hoped, less inflation

UGWOKE WILLIAMS IKECHUKWU. 2015/204045 ECONOMICS said...

What do NGOs bring to Development?
When NGOs began attracting attention during the late 1980s, they appealed to different sections of the development community for different reasons. For some Western donors, who had become frustrated with the often bureaucratic and ineffective governmentto-government, project-based aid then in vogue, NGOs provided an alternative and more flexible funding channel, which potentially offered a higher chance of local-level implementation and grassroots participation. For example, Cernea (1988: 8) argued that NGOs embodied ‘a philosophy that recognizes the centrality of people in development policies’, and that this, along with some other factors, gave them certain ‘comparative advantages’ over government and public sector. NGOs were seen as fostering local participation, since they were more locally rooted organizations, and therefore closer to marginalized people than most officials were. Poor people were often found to have been bypassed by existing public services, since many government agencies faced resource shortages and their decision-making processes were often captured by elites. Many also claimed that NGOs were generally operating at a lower cost, due to their use of voluntary community input. Finally, NGOs were seen as possessing the scope to experiment and innovate with alternative ideas and approaches to development. Some NGOs were also seen as bringing a set of new and progressive development agendas of participation, gender, environment and empowerment that were beginning to capture the imagination of many development activists at this time. For other donors and some governments, concerned with the need to liberalize and roll back the state as part of structural adjustment policies (SAPs), NGOs were also seen as a cost-effective and efficient alternative to public sector service delivery. Structural adjustment was a condition of many of the loans provided by the World Bank and the IMF from the late 1970s onwards which obliged governments to reduce the role of the state in the running of the economy and the social sectors, to open up the economy to foreign investment and to reduce barriers to trade.
NGOs and contemporary development theory
Three other areas of current applied development theory are relevant to NGOs, and these are briefly introduced here.
Social exclusion
Originating from work on social policy and poverty in industrialized countries, the concept of social exclusion has come to be incorporated into development theory in some quarters. As an approach to understanding poverty, it shifts attention away from simple economic measurements of poverty, to focus on the processes which produce it and the capacity of people to operationalize their rights to social and economic well-being. As Kabeer (2004: 2) writes, the value of social exclusion is in offering an integrated way of looking at different forms of disadvantage which have tended to be dealt with separately … In particular it captures the experiences of the certain groups and categories in a society of somehow being ‘set apart’ from others, of being ‘locked-out’ or ‘left behind’ in a way that the existing frameworks for poverty analysis had failed to capture. What is relevant to NGOs is that the framework of social exclusion draws attention to the need for appropriate institutional responses to social disadvantage which can address causes as well as outcomes, and the problem that, as De Haan (2007: 134) points out, ‘a dominant neo-liberal ideological framework tends to reduce state responsibility in poverty alleviation, reduction of inequalities and social integration’. It also serves to underline for NGOs the importance of working, beyond simply service delivery, to rights-based approaches that can strengthen the voices of people who find themselves excluded from policy and political processes.
Social capital
NGOs have also been associated with the concept of ‘social capital’, which began to find its way into developm

UKADIKE, UCHECHUKWU GLORY; 2015/198882 ECONOMICS said...

THE LINKAGES & INTER-LINKAGES BETWEEN FINANCE & DEVELOPMENT.
The 2030 Agenda of the United Nations presents a universal comprehensive and interlinked set of goals that define what we, the people of this planet, need to accomplish by the year 2030 to build a sustainable world that leaves no one behind. The Agenda enjoins actors at every level, local, national, regional and global, to work together across their divides in global, regional and country contexts. The 2030 Agenda goes far beyond the imperatives of economic growth and moves into the necessary policy integration of the economic, social and environmental dimension of sustainable development. It links development to sustainability and recognises that there can be no sustainable development without peace and no peace without sustainable development. The 2030 Agenda provides a comprehensive perspective for understanding the concept of development The Sustainable Development Agenda demands fundamental changes in how we produce and consume goods and services, how we manage our planet’s natural resources, emphasizing the urgency of pursuing sustainable development. Such an interlinked and indivisible agenda demands mutually reinforcing and synchronized efforts in all dimensions and by all actors of sustainable development. The 2030 Agenda therefore requires consideration and active mobilization of a multitude of interlinkages. In addressing these interlinkages, the UN must reverse the trends of excessive bi-lateralization and fragmentation in the global development landscape and revitalize multilateral approaches and institutions by taking steps, which make them more effective. The Agenda provides a new rationale for an inclusive and UN-led multilateralism, taking into account that global sustainable development is an investment in all dimensions of peace and social cohesion. To deliver its multilateral functions in the rapidly changing global context, the UN’s collective action capacities must be significantly enhanced. It needs to turn outwards and foster multilateral linkages. It must be able to bring goals, strategies, actors and resources together. It must lead and broker partnerships, convene, mobilize and leverage actors, facilitate the resolution of global policy conflicts, hold stakeholders accountable, ensure its legitimacy and credibility, develop commonly agreed norms and provide thought leadership.

2.1 Interlinkages with development partners
In a diverse and fragmented development landscape, the potential contribution of the UNDS must be seen as lying foremost in its ability to motivate and coordinate development actors within and beyond the UNDS itself so as to make the best use of the available human, financial and institutional resources. Cohesion in diversity provides a new perspective for the interlinkages between the UNDS and civil society organizations, private businesses, and other partners. Interlinkages with the Bretton Wood Institutions (BWI) and other International Financial Institutions are essential for an effective multilateral development system. This is also echoed in the Addis Ababa Action Agenda (AAAA) for financing sustainable development. The 2030 Agenda as, decided by the UN General Assembly (UN-GA), is valid and applicable to all development organizations. Consequently, it is very important that the UNDS works together with the multilateral development banks, the Bretton Woods Institutions (BWIs) and other international financial institutions in the implementation process in order to meet gaps in expertise, financing and programming and scale up the activities for sustainable development.

KENECHUKWU DIVINE OGECHI 2015/202536 said...

1.1 CONCEPT OF FINANCE AND DEVELOPMENT THEORIES
A branch of economics concerned with resource allocation as well as resource management, acquisition and investment. Simply, finance deals with matters related to money and the markets.
Finance is at the core of the development process. Backed by solid empirical evidence, development practitioners are becoming increasingly convinced that efficient, well-functioning financial systems are crucial in channeling funds to the most productive uses and in allocating risks to those who can best bear them, thus boosting economic growth, improving opportunities and income distribution, and reducing poverty.
Conversely, to the extent that access to finance and the available range of services are limited, the benefit of financial development is likely to elude many individuals and enterprises, leaving much of the population in absolute poverty. This access dimension of financial development is the focus of this report.
Improving access and building inclusive financial systems is a goal that is relevant to economies at all levels of development. The challenge of better access means making financial services available to all, thereby spreading equality of opportunity and tapping the full potential in an economy. The challenge is greater than ensuring that as many people as possible have access to basic financial services. It is just as much about enhancing the quality and reach of credit, savings, payments, insurance, and other risk management products in order to facilitate sustained growth and productivity, especially for small and medium-scale enterprises. Although the formal financial sector in a few countries has achieved essentially universal coverage of the population, at least for basic services, some financial exclusion persists even in many high-income countries (and, because they find it difficult to participate fully in those sophisticated economies, financial exclusion can be an even more serious handicap for those affected).
Theoreticians have long reasoned that financial market frictions can be the critical mechanism for generating persistent income inequality or poverty traps. Without inclusive financial systems, poor individuals and small enterprises need to rely on their personal wealth or internal resources to invest in their education, become entrepreneurs, or take advantage of promising growth opportunities. Financial market imperfections, such as information asymmetries and transactions costs, are likely to be especially binding on the talented poor and the micro- and small enterprises that lack collateral, credit histories, and connections, thus limiting their opportunities and leading to persistent inequality and slower growth. However, this access dimension of financial development has often been overlooked, mostly because of serious gaps in the data about who has access to which financial services and about the barriers to broader access.
Despite the emphasis financial access has received in theory, empirical evidence that links broader access to development outcomes has been very limited, providing at best tentative guidance for public policy initiatives in this area. Financial inclusion, or broad access to financial services, implies an absence of price and non price barriers in the use of financial services; it is difficult to define and measure because access has many dimensions. Services need to be available when and where desired, and products need to be tailored to specific needs. Services need to be a f ford-able, taking into account the indirect costs incurred by the user, such as having to travel a long distance to a bank branch. Efforts to improve inclusion should also make business sense, translate into profits for the providers of these services, and therefore have a lasting effect.

UKADIKE, UCHECHUKWU GLORY; 2015/198882 ECONOMICS said...

GOVERNMENT FINANCING

Sources of government financing include charges, fees and earnings, fines, seignorage and debt, regulatory taxes and general taxes

3.1 Regulatory taxes
Regulatory or "Pigouvian" taxes are taxes the government should levy on privately provided or privately consumed commodities when there are negative externalities or spill overs which lead to the private cost of provision or consumption being below the social cost. Since the government gets revenue from such taxes while, at the same time bringing private costs of provision or consumption in line with social costs by "making the polluter pay", such taxes have a double benefit. The importance of this phenomenon, known as the "double dividend hypothesis", is the subject matter of much ongoing research. It is generally believed that this source of revenue is underexploited by most governments. Some countries, such as Singapore, which do rely heavily on corrective taxes are able to raise as much as five percent of GDP from these sources. Besides environmental taxes and regulatory taxes linked to externalities, a related type of taxes to which Pigouvian principles apply are taxes on demerit goods or "sin taxes". Excises on liquor and tobacco are examples.

Since, by breaking laws citizen's reveal that their private cost of doing so is below the cost to society, fines for breaking the law are a form of Pigouvian tax. However, the amount of the tax in the case of fines is the ex-ante, expected value of the fine, in the event that the law breaker is caught and penalised. In designing fines, pure externality considerations must be tempered by taking into account the deterrent and (negative) incentive effect of fines on behaviour and also the principle of natural justice which asserts that "the penalty should not exceed the crime". This is the subject of much ongoing research. There has not been much assessment of whether fines are over or underused by the government, though inadequate enforcement of laws in many developing countries makes it likely that ex ante fines do not sufficiently penalise offenders.

UKADIKE, UCHECHUKWU GLORY; 2015/198882 ECONOMICS said...

Youth Entrepreneurship Development Programme
The Youth Entrepreneurship Development Programme (YEDP) was launched on 15th March, 2016 to enhance the deployment of the ingenuity and resourcefulness of Nigerian youths for maximum economic development. This was in recognition of the fact that there was no better segment of the Nigerian population than the youths to propel us to our much-needed economic recovery and diversification. In the third quarter of 2015, the National Bureau of Statistics (NBS) indicated that of the 36.3 million youths representing 48% of the nation’s labour force, 13.6 million or 37.7% of them were either unemployed or underemployed. This situation could not be allowed to fester given that many of our youths had very bright ideas and big dreams but are constrained by scarce seed funding.
The YEDP aims to fix the triple-barreled constraints of insufficiency, high cost and inadequate term of capital usually faced by youth entrepreneurs and start-ups. It offers credit of up to N3 million to eligible youth or N10 million for groups of 3 – 5 youths, Interest rate is 9% per annum. Tenor broadly depends on project complexity and cash flow but is between 1 year for working capital loan and 3 years for term loan. The collateral requirements are quite simple: academic and NYSC certificates, third party guarantees and other movable assets.

Target beneficiaries are members of the National Youth Service Corps (NYSC), non-NYSC (but not more than five years post-NYSC), those who possess a verifiable tertiary institution certificate, and artisans with First School Leaving Certificate or a technical certificate or accredited proficiency certificate from the National Board for Technical Education (NBTE), whichever is applicable. Beneficiaries can be encouraged to migrate to other CBN interventions to obtain more funding if they utilize the YEDP facility properly

KENECHUKWU DIVINE OGECHI 2015/202536 said...

5.2 ROLE OF NGOs IN DEVELOPMENT OF A COUNTRY
It is now estimated that over 15 percent of total overseas development aid is channelled through NGOs (World Bank) Total NGO numbers are hard to pin down for good reason; • Current estimates put the number of NGOs around; • 6,000 and 30,000 national NGOs in developing countries • 29,000 approximate international NGOs • Community based organizations across the developing and developed world that number in the hundreds of thousands (World Bank, Economist)
The targets of the NGOs are Community health promotion and education (such as hygiene and waste disposal). • Managing emerging health crises (HIV/AIDS, Hepatitis B). • Community social problems (juvenile crimes, run-away, street children, prostitution). • Environmental (sustainable water and energy resources). • Economic (micro loans, skills training, financial education and consulting). • Development (school and infrastructure construction). • Women‟s issues (women‟s and children‟s rights, counseling, literacy issues)
Promoting democracy • Advocating for human rights • Promoting sustainable socio-economic development • Providing humanitarian relief • Supporting educational and cultural renewal (Rice & Ritchie, 1995).
• Providing goods and services • Assisting the government achieve its development • Helping citizens to voice their aspirations, concerns and alternatives for consideration by policy makers • helping to enhance the accountability and transparency of government and local government programs and of officials.

Non-governmental organizations (NGOs) have become quite prominent in the field of international development in recent decades. But the term NGO encompasses a vast category of groups and organizations.
The World Bank, for example, defines NGOs as private organizations that pursue activities to relieve suffering, promote the interests of the poor, protect the environment, provide basic social services, or undertake community development. A World Bank Key Document, Working With NGOs, adds, In wider usage, the term NGO can be applied to any non-profit organization which is independent from government. NGOs are typically value-based organizations which depend, in whole or in part, on charitable donations and voluntary service. Although the NGO sector has become increasingly professionalized over the last two decades, principles of altruism and voluntarism remain key defining characteristics.
Different sources refer to these groups with different names, using NGOs, Civil Society Organizations (CSOs), Private Voluntary Organizations (PVOs), charities, non-profits charities/charitable organizations, third sector organizations and so on.
These terms encompass a wide variety of groups, ranging from corporate-funded think tanks, to community groups, grassroot activist groups, development and research organizations, advocacy groups, operational, emergency/humanitarian relief focused, and so on. While there may be distinctions in specific situations, this section deals with a high level look at these issues, and so these terms may be used interchangeably, and sometimes using NGOs as the umbrella term.


UKADIKE, UCHECHUKWU GLORY; 2015/198882 ECONOMICS said...

OTHER FINANCIAL ASPECTS OF DEVELOPMENT
4.1 Traditional Informal Finance
A 2009 study estimated that 2.5 billion adults do not use formal services to save or borrow. As noted earlier in the text, much economic activity in developing nations comes from small-scale producers and enterprises. Most are non-corporate, unlicensed, unregistered enterprises, including small farmers, producers, artisans, tradespeople, and independent traders operating in the informal urban and rural sectors of the economy. Their demands for financial services are unique and outside the purview of traditional commercial bank lending. For example, street vendors need short-term finance to buy inventories, small farmers require buffer loans to tide them over uncertain seasonal income fluctuations, and small-scale manufacturers need minor loans to purchase simple equipment or hire nonfamily workers. In such situations, traditional commercial banks are both ill equipped and reluctant to meet the needs of these small borrowers. Because the sums involved are small (usually less than $1,000) but administration and carrying costs are high and also because few informal borrowers have the necessary collateral to secure formal-sector loans, commercial banks are simply not interested. Most don’t even have branch offices in rural villages, small towns, or on the periphery of cities where many of the informal activities take place.
4.2 Microfinance Institutions
Microfinance is the supply of credit, saving vehicles, and other basic financial services made available to poor and vulnerable people who might otherwise have no access to them or could borrow only on highly unfavourable terms. Microfinance institutions (MFIs) specialize in delivering these services, in various ways and according to their own institutional rules. In the case of village banking, or group lending schemes, a group of potential borrowers forms an association to borrow funds from a commercial bank, a government development bank, an NGO, or a private institution. The group then allocates the funds to individual members, whose responsibility is to repay the group. The group itself guarantees the loan to the outside lender; it is responsible for repayment. The idea is simple: By joining together, a group of small borrowers can reduce the costs of borrowing and, because the loan is large, can gain access to formal commercial credit. With at least implicit joint liability, group members have a vested interest in the success of the enterprise and therefore exert strong pressure on borrowing members to repay on time

Opara stephine chinwendu. 2015/199290education economics said...

NAME: OPARA CHINWENDU STEPHINE
REG NO: 2015/199290
DEPARTMENT: SOCIAL SCIENCE EDUCATION (ECONOMICS)
BLOG ADRESS: OPARAS WORLD @BLOGSPOT.COM.
LECTURER: DR.TONY ORJI









CHAPTER ONE
Development means “improvement in country’s economic and social conditions”. More specially, it refers to improvements in way of managing an area’s natural and human resources. In order to create wealth and improve people’s lives.
Dudley Seers while elaborating on the meaning of development suggests that while there can be value judgements on what is development and what is not, it should be a universally acceptable aim of development to make for conditions that lead to a realisation of the potentials of human personality.
Seers outlined several conditions that can make for achievement of this aim:
i. The capacity to obtain physical necessities, particularly food;
ii. A job (not necessarily paid employment) but including studying, working on a family farm or keeping house;
iii. Equality, which should be considered an objective in its own right;
iv. Participation in government;
v. Belonging to a nation that is truly independent, both economically and politically; and
vi. Adequate educational levels (especially literacy).

GLOBAL DEVELOPMENT Global development refers to the development of greater quality of life for humans. Generally, it is used in a holistic and multi-disciplinary context of human development. The concept covers foreign aid, governance, health care, education, gender equality, disaster preparedness, infrastructure, economics, human rights, environment and issues associated with these. International development projects may consist of a single, transformative project to address a specific problem or a series of projects targeted at several aspects of society.
Domestic economic development is an increase in the capacity of an economy to produce goods and services, compared from one period of time to another. It can be measured in nominal or real terms, the latter of which is adjusted for inflation. Traditionally, aggregate economic growth is measured in terms of gross national product (GNP) or gross domestic product (GDP), although alternative metrics are sometimes used.
In simplest terms, economic development refers to an increase in aggregate productivity. Often, but not necessarily, aggregate gains in productivity correlate with increased average marginal productivity. This means the average labourer in a given economy becomes, on average, more productive. It is also possible to achieve aggregate economic growth without an increased average marginal productivity through extra immigration or higher birth rates.
Economic growth has a ripple effect. By expanding the economy, businesses start to see a surge in profits, which means stock prices also see growth. Companies can then raise more money in order to invest more, therefore adding more jobs to the labour force. That leads to an increase in incomes, inspiring consumers to open up their wallets and buy more.

UMEH ANTHONY ELOCHUKWU 2015/201013 said...

Chapter one
Introduction
Finance is a term describing the study and system of money, investments, and other financial instruments. Some people prefer to divide finance into three distinct categories: public finance, corporate finance, and personal finance. There is also the recently emerging area of social finance. Behavioral finance seeks to identify the cognitive (e.g. emotional, social, and psychological) reasons behind financial decisions.

Categories of public finance
Public finance
Public finance includes tax systems, government expenditures, budget procedures, stabilization policy and instruments, debt issues, and other government concerns. Corporate finance involves managing assets, liabilities, revenues, and debts for a business. Personal finance defines all financial decisions and activities of an individual or household, including budgeting, insurance, mortgage planning, savings, and retirement planning.
The federal government helps prevent market failure by overseeing the allocation of resources, distribution of income, and stabilization of the economy. Regular funding for these programs is secured mostly through taxation. Borrowing from banks, insurance companies, and other governments and earning dividends from its companies also help finance the federal government. State and local governments also receive grants and aid from the federal government. Other sources of public finance include user charges from ports, airport services, and other facilities; fines resulting from breaking laws; revenues from licenses and fees, such as for driving; and sales of government securities and bond issues.
Public finance includes tax systems, government expenditures, budget procedures, stabilization policy and instruments, debt issues, and other government concerns. Corporate finance involves managing assets, liabilities, revenues, and debts for a business. Personal finance defines all financial decisions and activities of an individual or household, including budgeting, insurance, mortgage planning, savings, and retirement planning.

Corporate Finance
Businesses obtain financing through a variety of means, ranging from equity investments to credit arrangements. A firm might take out a loan from a bank or arrange for a line of credit. Acquiring and managing debt properly can help a company expand and become more profitable.

Startups may receive capital from angel investors or venture capitalists in exchange for a percentage of ownership. If a company thrives and goes public, it will issue shares on a stock exchange; such initial public offerings (IPO) bring a great influx of cash into a firm. Established companies may sell additional shares or issue corporate bonds to raise money. Businesses may purchase dividend-paying stocks, blue-chip bonds, or interest-bearing bank certificates of deposits (CD); they may also buy other companies in an effort to boost revenue

UKADIKE, UCHECHUKWU GLORY; 2015/198882 ECONOMICS said...

THE CONCEPT OF NON-GOVERNMENTAL ORGANISATION & THEIR IMPACT ON DEVELOPMENT
Non-governmental organizations are largely staffed by altruistic employees and volunteers working towards ideological, rather than financial, ends. Their founders are often intense, creative individuals who sometimes come up with a new product to deliver or a better way to deliver existing goods and services. They are funded by donors, many of them poor or anonymous. Yet these attributes should not be unfamiliar to economists. Development NGOs, like domestic non-profits, can be understood in the framework of not-for-profit contracting. Non-profit do have the ability to distribute their “profits” to employees in the form of perquisites such as higher wages, shorter hours, or better offices. Nonetheless, because not-for-profit entrepreneurs have weaker incentives to maximize their profits, they may be able to obtain a competitive advantage in a number of areas (Glaeser and Shleifer, 2001).

UKADIKE, UCHECHUKWU GLORY; 2015/198882 ECONOMICS said...

5.1 The Framework of a Non-Governmental Organisation
Non-Verifiable Quality
Non-governmental organizations deliver goods and services to a population that provides little feedback on the range or quality of product delivered. Compared to usual market or political settings, beneficiaries have a weakened ability to use market forces to penalize and reward NGOs. Citizens can vote out an incumbent from office and consumers can choose not to purchase a product from a for-profit provider, but villagers may be hostage to the particular development scheme that happens to be funded by the designated local NGO.
One consequence is that NGOs face more direct incentives to manage donor satisfaction than beneficiary welfare. Indeed, donations are the only “market force” in the non-government sector industry, where donors can be viewed as desiring to improve the quantity and quality of the product of the NGO without having their donation expropriated. Thus, looking at the donor and funding base of NGOs will reveal the primary set of interests that a NGO is forced to manage.

UKADIKE, UCHECHUKWU GLORY; 2015/198882 ECONOMICS said...

Donors’ Influence
The largest single financial contributor to a non-governmental organization is often contributions from national governments. In 2004, official aid from governments totalled $87.7 billion worldwide (World Bank, 2006b), with $19.7 billion from the United States (OECD, 2006a). A substantial portion of that aid flowed through NGOs: in the United States, for example, nearly 15 percent of official economic aid was channelled through NGOs (USAID, 2006). Another 18 percent of U.S. official aid flowed through intergovernmental organizations such as the World Bank and the United Nations (OECD, 2006a); these, in turn, routed yet more through NGOs. This governmental funding amounted to 25 percent of the total budget of NGOs that registered with USAID (2006).

Growth of Non-governmental Organisations
The remarkable growth in non-governmental organizations over the last several decades is the result of interactions between secular trends, ideas, and technology. Governments have been outsourcing more of their development aid delivery to NGOs, following a trend amongst all organizations to outsource non-core functions (for example, Mullin, 1996), and also specifically due to a “perceived failure of governmental development assistance” (Barr and Fafchamps, 2006). At the same time, a reduction in communication costs has made it easier and cheaper for entrepreneurs in the NGOs to organize. This combination has provided the fodder and catalyst for NGOs to take off with a momentum of their own. To illustrate this in more detail, we examine the revenue patterns among US-based NGOs.

Entrepreneurs in the Developing World
Non-governmental organizations based in developing countries are proliferating, too. While time-series data are unavailable, there are a couple of cross-sectional surveys of NGO activity in the developing world. Barr, Fafchamps, and Owens (2005) surveyed the Ugandan NGO sector in depth. They carry out a representative sample of 199 of the 3159 registered NGOs. The vast majority of NGOs have very little revenue. Four large, international NGOs from their 199 responses account for well over half of the revenue: while the average revenue per NGO is $274,000, the median is only $22,000. Most funding from outside sources (international NGOs and bilateral donors) is allocated to these large NGOs, while small NGOs depend more heavily – over 50 percent – on membership fees, local fund-raising, and income derived from another business.

UKADIKE, UCHECHUKWU GLORY; 2015/198882 ECONOMICS said...

REFERENCES

www.brooklings.edu/blog/education-plus-development/2014/02/20/seven-facts-about-global-education-financing/
www.ecdpm.org/talking-points/5-key-facts-financing-development/
www.worldbank.org/en/publication/gfdr/gfdr-2016
www.oecd.org/development
www.federalreserve.gov/newsevents/speech/mishkin20070426ahtm

Opara stephine chinwendu. 2015/199290education economics said...

FINANCE:
Finance is a field that is concerned with the allocation (investment) of assets and liabilities (known as elements of the balance statement) over space and time, often under conditions of risk or uncertainty. Finance can also be defined as the science of money management. Market participants aim to price assets based on their risk level, fundamental value, and their expected rate of return. Finance can be broken into three sub-categories: public finance, corporate finance and personal finance. Finance is a broad term that describes two related activities: the study of how money is managed and the actual process of acquiring needed funds. It encompasses the oversight, creation and study of money, banking, credit, investments, assets and liabilities that make up financial systems. Many of the basic concepts in finance come from micro and macroeconomic theories.  One of the most fundamental theories is the time value of money, which essentially states that a dollar today is worth more than a dollar in the future. Since individuals, businesses and government entities all need funding to operate, the field is often separated into three main sub-categories: personal finance, corporate finance and public (government) finance.


GLOBAL FINANCE
The global financial is the worldwide framework of legal agreements, institutions, and both formal and informal economic actors that together facilitate international flows of financial capital for purposes of investment and trade financing. Since emerging in the late 19th century during the first modern wave of economic globalization, its evolution is marked by the establishment of central banks, multilateral treaties, and intergovernmental organizations aimed at improving the transparency, regulation, and effectiveness of international markets. In the late 1800s, world migration and communication technology facilitated unprecedented growth in international trade and investment. At the onset of World War I, trade contracted as foreign exchange markets became paralyzed by money market illiquidity. Countries sought to defend against external shocks with protectionist policies and trade virtually halted by 1933, worsening the effects of the global Great Depression until a series of reciprocal trade agreements slowly reduced tariffs worldwide. Efforts to revamp the international monetary system after World War II improved exchange rate stability, fostering record growth in global finance.
While the global financial system is edging toward greater stability, governments must deal with differing regional or national needs. Some nations are trying to orderly discontinue unconventional monetary policies installed to cultivate recovery, while others are expanding their scope and scale. Emerging market policymakers face a challenge of precision as they must carefully institute sustainable macroeconomic policies during extraordinary market sensitivity without provoking investors to retreat their capital to stronger markets. Nations' inability to align interests and achieve international consensus on matters such as banking regulation has perpetuated the risk of future global financial catastrophes.

njoku, victor obinna 201019 economics said...

DISCUSSING THE CONCEPT OF FINANCE AND DEVELOPMENT USING GLOBAL AND DOMESTIC STYLIZED FACT
FINANCE:
It is pertinent that we discuss and critically define the concept of finance.This involve the process of raising funds or capital for any kind of expenditure. Finance is the process of channeling these funds in the form of credit, loans, or invested capital to those economic entities that most need them or can put them to the most productive use.
The institutions that channel funds from savers to users are called financial intermediaries. They include commercial banks, savings banks, savings and loan associations, and such nonbank institutions as credit unions, insurance companies, pension funds, investment companies, and finance companies. Consumers, business firms, and governments often do not have the funds available to make expenditures, pay their debts, or complete other transactions and must borrow or sell equity to obtain the money they need to conduct their operations. Savers and investors, on the other hand, accumulate funds which could earn interest or dividends if put to productive use. These savings may accumulate in the form of savings deposits, savings and loan shares, or pension and insurance claims; when loaned out at interest or invested in equity shares, they provide a source of investment funds. Finance is the process of channeling these funds in the form of credit, loans, or invested capital to those economic entities that most need them or can put them to the most productive use.
Three broad areas in finance :
 business finance, personal finance, and public finance. In developed nations, an elaborate structure of financial markets and institutions exists to serve the needs of these areas jointly and separately.
Personal finance deals primarily with family budgets, the investment of personal savings, and the use of consumer credit. Individuals typically obtain mortgages from commercial banks and savings and loan associations to purchase their homes, while financing for the purchase of consumer durable goods (automobiles, appliances) can be obtained from banks and finance companies. Charge accounts and credit cards are other important means by which banks and businesses extend short-term credit to consumers. If individuals need to consolidate their debts or borrow cash in an emergency, small cash loans can be obtained at banks, credit unions, or finance companies.
Business finance is a form of applied economics that uses the quantitative data provided by accounting, the tools of statistics, and economic theory in an effort to optimize the goals of a corporation or other business entity. The basic financial decisions involved include an estimate of future asset requirements and the optimum combination of funds needed to obtain those assets. Business financing makes use of short-term credit in the form of trade credit, bank loans, and commercial paper. Long-term funds are obtained by the sale of securities (stocks and bonds) to a variety of financial institutions
The level and importance of public, or government, finance has increased sharply in Western countries since the Great Depression of the 1930s. As a result, taxation, public expenditures, and the nature of the public debt now typically exert a much greater effect on a nation’s economy than previously. Governments finance their expenditures through a number of different methods, by far the most important of which is taxes. Government budgets seldom balance, however, and in order to finance their deficits governments must borrow, which in turn creates public debt. Most public debt consists of marketable securities issued by a government, which must make specified payments at designated times to the holders of its securities.
Comprehensive Stylized facts:

njoku victor obinna 2010/201019 economic said...

BETWEEN FINANCE AND DEVELOPMENT
THE LINKAGES BETWEEN FINANCE AND DEVELOPMENT
Poverty hurts everyone in all places . If we can create pathways for people to escape poverty, through finance then we can attain development in a long run.
The relationship between financial and economic development has drawn attention in recent theoretical and empirical literature. Economic theory predicts a positive relationship between financial development and growth but empirical studies on these relationships produce mixed results.
The bulk of the empirical literature on finance and development suggests that well-developed financial systems play an independent and causal role in promoting long-run economic growth. More recent evidence also points to the role of the sector in facilitating disproportionately rapid growth in the incomes of the poor, suggesting that financial development helps the poor catch up with the rest of the economy as it grows. These research findings have been instrumental in persuading developing countries to sharpen their policy focus on the financial sector. If finance is important for development, why do some countries have growth-promoting financial systems while others do not? What can governments do to develop their financial systems? This article addresses these questions. It provides a brief review of the extensive empirical literature on finance and economic development and summarizes the main findings. It discusses the governments' role in building effective and inclusive financial systems. It concludes with a discussion of the implications of the still-unfolding financial crisis on financial sector policies going forward.
For anyone with a stake in helping economies grow and thrive—which includes every business, government and NGO in the world—this is huge news. Mobile money and other forms of digital finance used to be seen as a strategic way of reaching people who couldn’t previously afford or access financial services. That’s absolutely accurate, but it doesn’t tell the whole story. Now we know that digital finance can be a strategy for a much more universal goal: economic growth.

How exactly will digital banking translate into trillions of dollars in GDP? Some of that growth will come from the additional investments in the economy that billions of new financial customers bring with them. But most of it will come from the increases in productivity and efficiency that digital financial services make possible

OGBOBE UGOCHINYERE MERCY 2015/200440 ECONOMICS said...

CONCEPT OF FINANCE AND DEVELOPMENT
With the Millennium Development Goals set to expire and be replaced by the Sustainable Development Goals (SDGs), now is the time for all partners in development to make blended finance and shared-value partnerships the cornerstones of our future development pursuits.

The SDGs will be ambitious and far-reaching. To achieve them, we need to rethink how we finance development. In 2014, development assistance spending from all governments totalled $135 billion. The estimated cost to meet the proposed SDGs is in the trillions. This is an insurmountable gap to address through government funding alone. We need to find new ways to mobilize both public and private investments into developing countries to achieve sustainable development outcomes.

One mechanism that Canada is actively promoting is blended finance – an exciting new field of investment that uses public and philanthropic funds to unlock massive amounts of private capital for development. It offers a new approach to reducing the financial risk for investors in order to increase private investments in sectors such as health, finance or infrastructure.

Blended finance has already generated a significant amount of support within the development community. The challenge is that it involves a complex web of actors, sectors, geographies, instruments, and terminologies. What we need now is a space where all of these moving parts can converge, and Canada is actively involved in bringing that space to life.

In partnership with the World Economic Forum, the Global Development Incubator and many others, we are supporting a new initiative to accelerate the scaling up of blended finance. It is called Convergence, and it will address a number of challenges that currently exist in the blended finance field. These include a lack of knowledge and data about blended finance, high search costs of identifying partners, and high risk of testing new blended finance models. Convergence will provide information, tools and training on blended finance, and connect public and private investors, and pilot new blended finance models in developing countries.

Done right, Convergence will help leverage new sources of financing, turning billions into trillions, and significantly contribute to ending global poverty. The private sector will also benefit from new investment opportunities in developing nations.

Canada is developing a number of other tools as well. We are establishing a Canadian Development Finance Initiative (DFI) that will provide financing to private firms and foundations for commercial projects in low- and middle-income countries whose activities complement Canada’s international assistance priorities.

Initiatives can also be designed to pursue specific social objectives. For example, last year, Canada, the United States, Norway, and the World Bank Group announced plans to create the Global Financing Facility in support of Every Woman Every Child. We are thrilled to watch as this new facility begins to finance innovative initiatives with the private sector in maternal, new born and child health.

The additional investment generated through Convergence and other innovative financing mechanisms like Development Finance Initiatives and the Global Financing Facility will set the course for moving from the current billions of dollars in development finance to the trillions required in the post-2015 period.

ANIDOBE CHIGOZIE JOSEPH 2015/197514 ECOOMICS said...

LINKAGES AND INTERLINKAGES BETWEEN FINANCE AND DEVELOPMENT
Poverty hurts everyone. If we can create pathways for people to escape poverty, once and for all, everyone else will benefit as well.

For some time now at the Bill & Melinda Gates Foundation, we’ve believed that digital financial services are the most effective way to provide that pathway. And a new report recently released by the McKinsey Global Institute illustrates just how great the benefits can be.

In Digital Finance for All: Powering Inclusive Growth in Emerging Economies, McKinsey Global Institute reports that digital financial services can add 1.6 billion unbanked people to the formal economy. As a result, this would create 95 million jobs and increase the GDP of developing countries by $3.7 trillion—the equivalent of Germany’s GDP—by 2025.


For anyone with a stake in helping economies grow and thrive—which includes every business, government and NGO in the world—this is huge news.

Mobile money and other forms of digital finance used to be seen as a strategic way of reaching people who couldn’t previously afford or access financial services. That’s absolutely accurate, but it doesn’t tell the whole story. Now we know that digital finance can be a strategy for a much more universal goal: economic growth.

How exactly will digital banking translate into trillions of dollars in GDP? Some of that growth will come from the additional investments in the economy that billions of new financial customers bring with them. But most of it will come from the increases in productivity and efficiency that digital financial services make possible.

Across developing countries, more than 90% of all transactions are conducted in cash. This is extremely time-consuming and labour-intensive for financial providers. Governments could gain $110 billion per year from reduced leakage in public spending and tax collection.

With digital financial services, payments are direct, secure and recorded. They take virtually no time at all and require very little overhead compared to brick-and-mortar banks and hands-on transactions.

Digital financial services help citizens be more productive as well. They can accept wages, pay bills, share money with family and perform numerous other transactions at will, using their mobile phones or computers. Without this convenience, people have to use cash—which can mean missing work to travel half a day and then wait in line for hours at a government or vendor office. From saving time and energy to securely saving money for the first time in their lives, the benefits of digital financial services are profound for the unbanked.


The mandate, then, is pretty obvious: let’s make digital financial services ubiquitous, especially in countries where the unbanked are concentrated. Let’s follow the examples set in Tanzania, India, Mexico and several other nations around the world that are embracing digital financial services across the public and private sectors.

And let’s work together. Collaboration across sectors and industries is the only way to marshal the resources and expertise necessary to make “digital finance for all” a reality.

The bedrock of this reality will be the digital infrastructure that facilitates billions of daily transactions. The roots are in place in many countries. We must continue improving and expanding mobile and internet connections around the world.

We need a vibrant and diverse market of financial services providers, with banks, start-up’s, mobile network operators and other non-banks competing for customers. This requires a regulatory environment that both protects customers and encourages providers to dive in and innovate.


Finally, we need products that serve the needs of this untapped customer base. Despite its shortcomings, cash is useful—it’s accepted almost everywhere—and familiar. To rival and eventually supplant it, we need to design low-fee, user-friendly products that are as widely accepted as cash.

UDEAFOR MARYANN CHISOM, 2014/191757(3/4), ECONOMICS said...

CHAPTER ONE
INTRODUCTION
1.0 Definition of terms:
Finance: Before we begin, first let’s understand the origin of word “FINANCE.” If we trace the origin of finance, there is evidence to prove that it is as old as human life on earth. The word finance was originally a French word. In the 18th century, it was adapted by English speaking communities to mean “the management of money.” Since then, it has found a permanent place in the English dictionary. Today, finance is not merely a word else has emerged into an academic discipline of greater significance. Finance is now organized as a branch of Economics. Finance to be more precise is concerned with the management of,
1. Owned funds (promoter contribution),
2. Raised funds (equity share, preference share, etc.), and
3. Borrowed funds (loans, debentures, overdrafts, etc.).
At the same time, Finance also encompasses wider perspective of managing the business generated assets and other valuables more efficiently.
Development: Economic development usually refers to the adoption of new technologies, transition from agriculture-based to industry-based economy, and general improvement in living standards.
Stylized Facts: A stylized fact is a term used in economics to refer to empirical findings that are so consistent (for example, across a wide range of instruments, markets and time periods) that they are accepted as truth. Due to their generality, they are often qualitative.
Sewell (2006)
"In social sciences, especially economics, a stylized fact is a simplified presentation of an empirical finding. While results in statistics can only be shown to be highly probable, in a stylized fact, they are presented as true. They are a means to represent complicated statistical findings in an easy way. A stylized fact is often a broad generalisation, which although essentially true may have inaccuracies in the detail."
Stylized facts are thus obtained by taking a common denominator among the properties observed in studies of different markets and instruments. Obviously by doing so one gains in generality but tends to lose in precision of the statements one can make about asset returns. Indeed, stylized facts are usually formulated in terms of qualitative properties of asset returns and may not be precise enough to distinguish among different parametric models. Nevertheless, we will see that, albeit qualitative, these stylized facts are so constraining that it is not easy to exhibit even an (ad hoc) stochastic process which possesses the same set of properties and one has to go to great lengths to reproduce them with a model."
Cont (2001).

UMEH ANTHONY ELOCHUKWU 2015/201013 said...

Government financing
Also known as Public finance. Public finance the branch of economics concerned with the income and expenditure of public authorities and its effect upon the economy in general. When the classical economist wrote upon the subject of public finance, they concentrated upon the income side, taxation. Since the Keynesian era of the 1930s, much more emphasis has been given to the expenditure side and the effect that fiscal policy has on the economy.
The public sector is so large a part of most economies that it influences virtually every aspect of economic life, either through its own expenditure on goods and service provided by the private sector, its wage payments to public-sector employees, or its social security payments (pensions, sickness and unemployment benefits). Similarly, the financing of these expenditures by means of various taxes (income tax, value-added tax, corporation tax, etc.) affects the size and pattern of spending by individuals and businesses.
Governments plan their revenue and expenditure each fiscal year by preparing a budget.. They may plan to match their expenditure with their revenue, aiming for a BALANCED BUDGET; or they may plan to spend less than they raise in taxation, running a BUDGET SURPLUS and using this surplus to repay former public debts or they may plan to spend more than they raise in taxation, running a budget deficit that has to be financed by borrowing

Sources oI government financing
Tax
A tax is a compulsory levy imposed by a public authority against which tax payers cannot claim anything. It is not imposed as a penalty for only legal offence. The essence of a tax, as distinguished from other charges by the government, is the absence of a direct quid pro quo (i.e., exchange of favour) between the tax payer and the public authority.
Tax has three important features
(i) It is a compulsory contribution, to the state from the citizen. Anyone refusing to pay tax is punished under law. Nobody can object to taxation on the ground that he is not getting the benefit of certain state services,
(ii) It is the personal obligation of the individual to pay taxes under all circumstances,
(iii) There is no direct relationship between benefit and tax payment.


Rates
Rates refer to local taxation, i.e., taxation levied by (or for) local rather than central government. Normally rates are proportional to the estimated rentable value of business and domestic properties. Rates are often criticised as being unrelated to income
Fee is a payment to defray the cost of each recurring service undertaken by the government, primarily in the public interest.

Eze Juliet Oluchi said...

CHAPTER ONE
Introduction
Finance and development
Finance is a field that is concerned with the allocation (investment) of assets and liabilities (known as elements of the balance statement) over space and time, often under conditions of risk or uncertainty. Finance can also be defined as the science of money management. Market participants aim to price assets based on their risk level, fundamental value, and their expected rate of return. Finance can be broken into three sub-categories: Public finance, corporate finance and personal finance .Finance is the study of money and assets coupled with the management and use of those assets to build wealth. The activity of finance is the application of a set of techniques that individuals and organizations (entities) use to manage their financial affairs.
The global financial system is the worldwide framework of legal agreements, institutions, and both formal and informal economic actors that together facilitate international flows of financial capital for purposes of investment and trade financing. Since emerging in the late 19th century during the first modern wave of economic globalization, its evolution is marked by the establishment of central banks, multilateral treaties, and intergovernmental organizations aimed at improving the transparency, regulation, and effectiveness of international markets. In the late 1800s,

Eze Juliet Oluchi . Reg no. 2015/202418 said...

world migration and communication technology facilitated unprecedented growth in international trade and investment. At the onset of World War I , trade contracted as foreign exchange markets became paralyzed by money market illiquidity. Countries sought to defend against external shocks with protectionist policies and trade virtually halted by 1933, worsening the effects of the global Great Depression until a series of reciprocal trade agreements slowly reduced tariffs worldwide. Efforts to revamp the international monetary system after World War II improved exchange rate stability, fostering record growth in global finance.
This view of development as an emergent property of a system fits with the common-sense definition of development described earlier. Development is more than improvements in peoples well-being: it also describes the capacity of the system to provide the circumstances for that continued well-being. Development is a characteristic of the system; sustained improvements in individual well-being are a yardstick by which it is judged. This has important implications for development policy, both for developing countries themselves wishing to put their economy and society onto a path of faster development, and for outsiders who want to help that process. We are at an early stage of exploring those implications.
Development finance aims to serve people and communities beyond the pale of mainstream finance. Credit is transformed from an instrument of profit to one of social emancipation and progress.

Anonymous said...

Development finance encompasses everything from individual micro loans to macro investments in business and infrastructure. While it might align closely with mainstream finance, the spirit that drives it is vastly different.
Development finance aims to serve people and communities beyond the pale of mainstream finance. Credit is transformed from an instrument of profit to one of social emancipation and progress.
The international flows of capital augmented notably in the last three decades, particularly, after 1987 most of the countries liberated their capital account. Transition countries, especially members of European Union and accession candidates, had progressed significantly into the financial globalization, and for this purpose their financial systems are key factors to get benefits and to withstand the risks associated with the globalization.
Notwithstanding financial crises, economic literature argues theoretically and empirically that globalization promotes financial development because it allows to financial systems a better performance in their basic functions. Financial globalization reduces the power of interest groups (who are opposed to the development of the financial system) and it permits the adaptation of the institutional structure, in favor of the best practices and financial innovations.
Financial development favors larger rates of growth and economic

OKOLIE OGECHUKWU MARY 2015/199289 EDU/ECONS said...

CHAPTER ONE
1.1 Introduction
This work looks at the finance and economic development. It tries to see the connection between finance and economic development. It looks at government finance and how development is financed in Nigeria. It then goes further to discuss the non-governmental organisatons and their contributions to development.
1.2 Definition of terms
Finance has been defined by different people in numerous ways. Some of which include:
• Finance in general terms
It is the management of money and other valuables the valuables referred to here are valuables that can be easily converted to cash.
• Finance by Experts
It is a simple task of providing the necessary funds that are required by the necessary entities like businesses, companies, individuals and even economies in order to make the actualization of their economic objectives and goals feasible in favourable terms.
• Finance by Entrepreneurs
To entrepreneurs, anything finance means cash. This is probably so because most business transactions are impossible without the presence of cash.
• Finance by Academicians
Finance is the obtaining and effective usage of funds. They stretched it further to say that it includes profit of a business as a result of the risk and cost borne by these businesses.
Finance is a field that is concerned with the allocation of assets and liabilities (known as elements of the balance statement) over space and time, often under conditions of risk or uncertainty. It can also be referred to as the science of money management (from Wikipedia).
According to investopedia, finance is a broad term that describes two related activities: the study of how money is managed and the actual process of acquiring needed funds. It encompasses the oversight, creation and study of money, banking, credit, investments, assets and liabilities that make up financial systems.

OKOLIE OGECHUKWU MARY 2015/199289 EDU/ECONS said...

Economic Development
According to Salmon Valley Business and Innovation centre, economic development simply means the development of economic wealth of nations for the well-being of its citizens. It is the improvement of the economic well-being and welfare of a people in a particular economy. It includes improvement in economic development indicators like literacy rate, poverty rates, life expectancy etc.
Encyclopedia Britannica defined economic development as the procedure whereby simple and low-income national economies are transformed into modern industrial economies. It involves the change that is recorded or seen in the economy in qualitative terms.
Myint and Krueger (2009) says that economic development is the growth in the standard of living of the people in a nation that was operating that a low-income level and now at a high-income level.
Blair, John and Carrol (2009) said that once the local quality of life of people in an economy has increased, then economic growth has taken place.
1.3 Relationship between finance and development
Finance definitely has a relationship with development. From empirical literature, it has been established that economic growth is not the same as economic development and also economic development cannot take place without economic growth.
Finance is the back bone economic growth and economic development cannot occur without economic growth. Therefore, finance is needed for economic development. Although finance is a necessary condition development, it is not a sufficient condition for development. In other words, finance is a must for development to occur but the simple presence of finance does not mean that development will occur.
Take for instance United States of America, they have been experiencing economic growth and of course coupled with the necessary technology, using their per capita income, they are experiencing economic development. The standard of living is high and their life expectancy is also high.
Coming down to Nigeria, the nation has experienced economic growth over the years but unfortunately, there is no data for economic development in Nigeria. Notwithstanding, the per capita income for Nigeria is low and the life expectancy of Nigerian citizens is not up to sixty years. It is some NGOs, especially when those of big companies like Airtel touching lives, Mtn foundation, and other foundations.
We can now establish that finance is definitely necessary for development but only finance cannot guarantee development. It has to be combined with other things like technology, efficient management etc.



OKOLIE OGECHUKWU MARY 2015/199289 EDU/ECONS said...

CHAPTER TWO
2.1 Government financing
Government financing can be seen as the finance or funds provided by government for the execution of projects. It is somehow related to public finance in the sense that public finance deals with the role of government in the economy. That is, the study of government revenue and government expenditure.
Government financing is the intentional maneuvering of its revenues and expenditures. The government uses different types of revenues and expenditures as fiscal tools to achieve its different objectives. For this study, one can say its main objective is economic development. That is, improved standard of living of its citizens.

2.2 Sources of government financing
Sources of government financing includes
• Taxation
This is the compulsory levy imposed by the government against which tax payers cannot claim anything. It is not imposed as a penalty for only legal offence. The essence of a tax, as distinguished from other charges by the government, is the absence of a direct exchange of favour between the tax payer and the government. It is a compulsory contribution to the state from the citizen.
• Rates
Rate is the form of tax that is paid at the local level. The difference between rates and general taxes is that general taxes are paid to the central government and rates are amounts levied by the local instead of central government.
• Excesses from the public sector
These are the profits that government sectors which render services like water supply, transportation, electricity etc. make after paying for all their expenses. It also serves as a medium for government financing.
• Fine and penalties
These are charges imposed on offenders as punishment for breaking a law. Penalty charges are not primarily to raise money but to ensure law and order in the economy. Since there are some social deviants in a society, then the charges serve as funds to the government.
• Borrowing
When government have nowhere else to turn to, they can either borrow from their citizens through the sale of bonds, or they can run to any financial monetary body like the IMF, World Bank etc.
• Gifts and Grants
These are voluntary contribution from private individu¬als or non-government donors to the government fund for specific purposes such as relief fund, defence fund during war or an emergency. Notwithstanding, this source provides a small portion of government revenue.

OKOLIE OGECHUKWU MARY 2015/199289 EDU/ECONS said...

CHAPTER THREE
3.1 Nigeria and development financing including its sources
The government is one of the major sources of finance for development. They do this through the Central Bank of Nigeria and sometimes collaborate with other institutions like other banks and even international banks like World Bank.
The central bank has the following plans for financing development in Nigeria.
1. Agricultural Credit Guarantee Scheme (ACGSF)
• Innovations :
a. Self-Help Group Linkage Banking –Performance/Data support
b. Trust Fund Model – Performance/Commitment by government & NGOs.
c. Interest Draw Back Programme – Claims settled/data to support.
d. ACGSF Reports
2. Commodity Surveillance
• Reports/data - Prices/Quantity, Price trends and changes overtime, price monitoring, export levy on Agric. Commodity.
3. Microfinance
• Newsletters
• Launch and Emergence
• Framework and Guidelines
• List of Microfinance Institutions,
• Reports/data/Documents
4. SME Finance
• Guidelines for N200 Billion SME Credit Guarantee Scheme (SMECGS)
• Guidelines for N200 Billion Refinancing and Restructuring of Banks' Loans to the Manufacturing Sector
5. Small and Medium Enterprises Equity Investment Scheme (SMEEIS)
• Guidelines
6. Refinancing and Rediscounting Scheme (RRF)
• Emergence/establishment

OKOLIE OGECHUKWU MARY 2015/199289 EDU/ECONS said...

3.2 Other financial aspects of development
Other financial aspects of development includes
• GLOBAL TAXES
Global taxes can address serious global problems while at the same time raising revenue for development. A tax on carbon emissions could help slow global climate change, while a tax on currency trading could dampen dangerous instability in the foreign exchange markets. The revenue from these taxes could support major programs to reduce poverty and hunger, ensure primary schooling for all children, and reverse the spread of HIV/AIDS, malaria and other major diseases. Unreliable donations from rich countries will not fill this need, estimated by the UN to cost tens of billions per year. A global system of revenue-raising must be put in place to fund genuinely international initiatives. While proposals for global taxes have met fierce opposition from the US government, more and more politicians, scholars, international organizations and NGOs support the idea. In 2004, the presidents of Brazil, France and Chile launched an initiative to promote international taxes to finance development. Since then, the leaders of Spain, Germany, Algeria and South Africa have joined the process. This and other recent proposals have focused on the revenue side of global taxes, disregarding their role as policy shaping instruments.
• INTERNATIONAL AID
International aid provides a key element of development financing. For many of the poorest countries, official development assistance (ODA) represents the largest source of external financing. ODA can support a country's education, health, public infrastructure, agricultural and rural development. But only a handful of rich countries meet the UN target of giving 0.7% of their gross national product in international assistance. Further, donors often "tie" aid by requiring that it be spent on exports from the donor. Aid also often has political strings attached and it may be used to promote local business interests of the donor, not the real development needs of the recipient. This page posts articles on these and other aspects of international aid and development.

• DEBT RELIEF
Debt has been choking the world's weakest economies and blocking economic progress for billions of the world's poorest people. Governments borrowed money in the past for development projects, but often corrupt leaders stole the proceeds. To pay off the interest and principal, governments have been forced by creditors to slash their social spending and shrink their public sector. Even so, the debt burden continues to grow, placing the poorest countries in a kind of debt bondage. Campaigns such as Jubilee 2000 have demanded debt forgiveness, and a few debts have been canceled, but still the debt burden grows larger.

OKOLIE OGECHUKWU MARY 2015/199289 EDU/ECONS said...

• FOREIGN DIRECT INVESTMENT
Foreign direct investment (FDI) has increased tenfold over the last 20 years. This kind of investment brings private overseas funds into a country for investments in manufacturing or services (for example, General Motors building an auto factory in the Philippines). FDI can bring impressive growth, as in China's coastal provinces, but also instability and economic distress, as during the 1997-98 Asian financial crisis. Governments of many poor countries see foreign capital as a means of economic growth, and they have taken steps to attract it. These steps often include minimizing business regulation and weakening codes for labor, health, and the environment. Such governments may also try to improve the investment climate by using violence to silence opposition parties and movements. Rich countries, for their part, have sought legal protection for investors, and have used the World Bank and the IMF to impose new arrangements in this field. Bilateral and multilateral agreements, such as the North American Free Trade Area, protect investments at the expense of environmental and health regulations. The proposed Multilateral Investment Agreement (MIA), under negotiation at the WTO, would replicate this imbalance at the global level.

• DOMESTIC FINANCIAL RESOURCES FOR DEVELOPMENT
Developing countries must mobilize domestic resources for development. National budgets contain potential for savings and redistribution. Governments can make additional resources available for sustainable development by reforming their tax systems and eliminating harmful subsidies and unproductive expenses. Of course, when dictators send billions to secret bank accounts, and when wealthy citizens send their savings overseas, they drain domestic financial resources, undermining the basis for development.




OKOLIE OGECHUKWU MARY 2015/199289 EDU/ECONS said...

CHAPTER FOUR
4.1 Non-governmental organizations and their impact on development.
Non-governmental organisations also known as HGOs are non-profit organisations which are active in humanitarian, healthcare, human rights, educational etc. areas to effect changes which are in line with their objectives and are independent of government (both national and international) bodies or agencies, Claiborne (2009).
Most NGOs are funded by donations while few are operated by volunteers. NGOs are diverse groups and they take different forms in different parts of the world. Some are charitable, while some are religious or political in nature.
Impact of Non-governmental Organisations in Development
NGOs have really helped alleviate the poverty level of poor people. This is because the government cannot reach the grass root. It is these NGOs and their activities that can reach the grass roots perfectly. Therefore, NGOs have a serious role and play a serious role in economic development.
NGOs usually use interpersonal communication as a method to gain the trust of the community they are interested in. With this first-hand information, they can advise the government on policies they can make that will benefit that particular community well. They can also communicate the intentions of the government to the people and communicate the needs of the people to the government. In other words, NGOs serve as a communication channel between the government and the people. They help in improving the communication between the government and the grass root.
NGOs have the advantage of selecting particular places for innovative projects and specify in advance the length of time which they will be supporting the project - overcoming some of the shortcomings that governments face in this respect. NGOs can also be pilots for larger government projects by virtue of their ability to act more quickly than the government bureaucracy.
In some cases, NGOs become spokespersons for the poor and attempt to influence government policies and programs on their behalf. This may be done through a variety of means ranging from demonstration and pilot projects to participation in public forums and the formulation of government policy and plans, to publicizing research results and case studies of the poor. Thus NGOs play roles from advocates for the poor to implementers of government programs; from agitators and critics to partners and advisors; from sponsors of pilot projects to mediators.

OKOLIE OGECHUKWU MARY 2015/199289 EDU/ECONS said...

4.2 Conclusion
Economic development is not a one man job. Finance is a basic necessity for economic development. This available finance needs to be allocated to the right channels. This finance cannot even be provided soley by the government. All hands needs to be on deck. The government should have an open mind and give creditable NGOs the chance to help when they can.



REFERENCES
Blair, John and Carroll, C. (2009). Local Economic Development: Analysis, Practices, and Globalization. Sage Publications.
Myint, H. & Krueger, A. O (2009). Economic development. Encyclopedia Britannica.
Claiborne, N (2004). Presence of social workers in nongovernment organizations.
Anthony, B. A. & Joseph, E. S. (1980). Lectures in Public Economics. McGraw-Hill Economics
Handbook Series
Alan, S. B. & Robert, M. S. et al. (1974). The Economics of Public Finance. Brookings
Institution. .

OSHIM THEOPHILUS CHISOM said...

DISCUSS THE CONCEPT OF FINANCE AND DEVELOPMENT USING GLOBAL AND DOMESTIC STYLIZED FACTS
WHAT IS FINANCE?
Finance is a broad term that describes two related activities: the study of how money is managed and the actual process of acquiring needed funds. It encompasses the oversight, creation and study of money, banking, credit, investments, assets and liabilities that make up financial systems. Many of the basic concepts in finance come from micro and macroeconomic theories. One of the most fundamental theories is the time value of money, which essentially states that a dollar today is worth more than a dollar in the future.
However, finance could also be used to mean money itself. This is to say that when someone talks of needing finance it means that he needs money.
DEFINITIONS OF FINANCE
Finance is defined in numerous ways by different groups of people. Though it is difficult to give a perfect definition of Finance following selected statements will help you deduce its broad meaning.
1. In General sense, "Finance is the management of money and other valuables, which can be easily converted into cash."
2. According to Experts,"Finance is a simple task of providing the necessary funds (money) required by the business of entities like companies, firms, individuals and others on the terms that are most favourable to achieve their economic objectives."
3. According to Entrepreneurs, "Finance is concerned with cash. It is so, since, every business transaction involves cash directly or indirectly."
4. According to Academicians, "Finance is the procurement (to get, obtain) of funds and effective (properly planned) utilisation of funds. It also deals with profits that adequately compensate for the cost and risks borne by the business."
Since individuals, businesses and government entities all need funding to operate, the field is often separated into three main sub-categories: personal finance, corporate finance and public (government) finance.
• Personal finance
• Corporate finance
• Public finance

UGWUANYI CHRISTIAN TOCHUKWU, 2015/202664, ECONOMICS said...

CHAPTER ONE
THE CONCEPT OF FINANCE AND DEVELOPMENT USING GLOBAL AND DOMESTIC STYLIZED FACTS.
Finance is a field that is concerned with the allocation (investment) of assets and liabilities (known as elements of the balance statement) over space and time, often under conditions of risk or uncertainty. Finance can also be defined as the science of money management. Market participants aim to price assets based on their risk level, fundamental value, and their expected rate of return. Finance can be broken into three sub-categories: public finance, corporate finance and personal finance.

Economic development is the process by which a nation improves the economic, political, and social well-being of its people. The term has been used frequently by economists, politicians, and others in the 20th and 21st centuries. The concept, however, has been in existence in the West for centuries. "Modernization, "westernization", and especially "industrialization" are other terms often used while discussing economic development. Economic development has a direct relationship with the environment and environmental issues. Economic development is very often confused with industrial development, even in some academic sources.
WHAT IS DEVELOPMENT FINANCE?
Development finance is the efforts of local communities to support, encourage and catalyze expansion through public and private investment in physical development, redevelopment and/or business and industry. It is the act of contributing to a project or deal that causes that project or deal to materialize in a manner that benefits the long-term health of the community.

GLOBAL STYLIZED FACTS.
The Financing for Development Debate in a Nutshell
As experts on international development and finance from around the world convene in Addis Ababa for the Third UN Financing for Development conference, we bring you 5 key facts you need to know about ‘Financing for Development’:
1. Taxes and other public resources are the largest source of finance for development
The European Report on Development shows us that the vast bulk of the funds for development in developing countries comes first and foremost from their own domestic tax revenue, followed by domestic private finance. Want an example? Then think of China, which helped the world meet Millennium Development Goal 1 (halving global poverty by 2015) by targeting poverty at home with domestic public funds and domestic private capital. In particular, the European Report on Development shows us that:
• Domestic public revenues (tax and non-tax revenues) rose nearly three-fold by 272%, from $1,484 billion (bn) in 2002 to $5,523 bn in 2011
• International public finance (net ODA and Other Financial Flows (OOF)) nearly doubled by 114%, from $75 bn in 2002 to $161 bn in 2011
• Private domestic finance (measured as Gross Fixed Capital Formation by the private sector, less FDI) quadrupled by 415%, from $725 bn in 2002 to $3,734 bn in 2011
• Private international finance (net FDI inflows, portfolio equity and bonds, commercial loans and remittances) rose nearly threefold by 297%, from $320 bn in 2002 to $1,269 bn in 2011

OSHIM THEOPHILUS CHISOM said...

Personal Finance
Financial planning generally involves analyzing an individual's or a family's current financial position, and formulating strategies for future needs within financial constraints. Personal finance is a very personal activity that depends largely on one's earnings, living requirements, goals and individual desires.
For example, individuals need to save for retirement expenses, which means investing enough money along the way to properly fund their long-term plans. This type of financial management decision falls under personal finance.
Personal finance includes the purchasing of financial products, like credit cards, insurance, mortgages and various types of investments. Banking is also considered a part of personal finance, including checking and savings accounts as well as online or mobile payment services like PayPal and Venmo.
Corporate Finance
Corporate finance consists of the financial activities related to running a corporation, usually with a division or department set up to oversee the financial activities.
For example, a large company may have to decide whether to raise additional funds through a bond issue or stock offering. Investment banks may advise the firm on such considerations and help them market the securities.
Startups may receive capital from angel investors or venture capitalists in exchange for a percentage of ownership. If a company thrives and decides to go public, it will issue shares on a stock exchange in an initial public offering (IPO) to raise cash.
Another instance could be a company that is trying to budget their capital and make decisions on what projects to finance and what projects to put on hold in order to grow the company. These types of decisions fall under corporate finance.
For more, read the Complete Guide to Corporate Finance.
Public Finance
Public finance includes tax, spending, budgeting and debt issuance policies that all affect how a government pays for the services it provides to the public.
The federal government helps prevent market failure by overseeing the allocation of resources, distribution of income and stabilization of the economy. Regular funding is secured mostly through taxation. Borrowing from banks, insurance companies and other governments also help finance the government.
In addition to managing money for its day-to-day operations, a government body also has larger social responsibilities. Its goals include attaining an equitable distribution of income for its citizens and enacting policies that lead to a stable economy.

UGWUANYI CHRISTIAN TOCHUKWU, 2015/202664, ECONOMICS said...

2. We need a completely new approach towards financing international development
We have learned a lot in implementing the Millennium Development Goals over the last 15 years. There is a need to go deeper and look at what really drives or enables development if you want transformative change. Again, the European Report on Development highlights six examples of enablers that, if well managed and funded, can promote transformative development – local governance, infrastructure, human capital, green energy technology, biodiversity and trade. These enablers combine economic, social and environmental dimensions.
The Sustainable Development Goals currently being negotiated at the UN in New York are a welcome move in this direction reflecting a more up-to-date, qualitative and (as the name suggests) sustainable approach to development. They target enablers like local governance, human capital, infrastructure, green energy technology and trade and we need to consider how we can best finance them.
3. Finance alone will not be sufficient to achieve the post-2015 development agenda
Policies also matter. In fact, policies are fundamental. 6 country illustrations were undertaken for the European Report on Development in places where transformative change had occurred and identified a range of specific policies that help to mobilise finance – like regulatory reforms, building administrations, tax reforms and incentives for foreign direct investment. Just look at the case of Mauritius….
it together.
DOMESTIC STYLIZED FACTS.
1. Only 15 percent of Nigerian entrepreneurs are women --- one of the lowest shares in all Sub-Saharan Africa
2. Almost 70 percent of firms in Akwa Ibom train their employees while just one percent of firms in Zamfara do so. And workers that receive training earn up to a quarter more than non-trained workers.
3. Female entrepreneurs need credit more than men, but they are less likely to apply for and less likely to obtain a loan.
4. Unreliable power supply obliges almost 90 percent of firms to have a generator, and 70 percent of the energy used by manufacturers comes from their own generators.
5. Nearly 70 percent of small firms with loans had to pledge their personal assets -- usually their house -- as collateral.
6. Over half of the manufacturing firms in Nigeria do not employ any woman.
7. Losses due to unreliable power, transportation disruption, bribes, crime, and security amount to 10 percent of sales. Twice as high as in South Africa.
8. Nigerian firms that apply for bank loans are almost three times as likely to be rejected as firms in Brazil and Kenya.
9. Half of the small firms that today are registered started as unregistered firms.
10. Female entrepreneurs are 20 percent more likely to hire a female worker compared to men entrepreneurs. However, a woman looking for a job in Nigeria is three times more likely to find it in male-owned then in a female owned company.


OSHIM THEOPHILUS CHISOM said...

THE CONCEPT OF DEVELOPMENT
Economic development is the process by which a nation improves the economic, political, and social well-being of its people. The term has been used frequently by economists, politicians, and others in the 20th and 21st centuries. The concept, however, has been in existence in the West for centuries. "Modernization, "westernization", and especially "industrialization" are other terms often used while discussing economic development. Economic development has a direct relationship with the environment and environmental issues.[further explanation needed] Economic development is very often confused with industrial development, even in some academic sources.
Whereas economic development is a policy intervention endeavor with aims of improving the economic and social well-being of people, economic growth is a phenomenon of market productivity and rise in GDP. Consequently, as economist Amartya Sen points out, "economic growth is one aspect of the process of economic development".
Development includes the process and policies by which a nation improves the economic, political, and social well-being of its people.[1]
Mansell and When also state that economic development has been understood since the World War II to involve economic growth, namely the increases in per capita income, and (if currently absent) the attainment of a standard of living equivalent to that of industrialized countries.[3][4] Economic development can also be considered as a static theory that documents the state of an economy at a certain time. According to Schumpeter and Backhaus (2003), the changes in this equilibrium state to document in economic theory can only be caused by intervening factors coming from the outside.[5]
GROWTH AND DEVELOPMENT
Economic growth deals with increase in the level of output, but economic development is related to increase in output coupled with improvement in social and political welfare of people within a country. Therefore, economic development encompasses both growth and welfare values.
Dependency theorists argue that poor countries have sometimes experienced economic growth with little or no economic development initiatives; for instance, in cases where they have functioned mainly as resource-providers to wealthy industrialized countries. There is an opposing argument, however, that growth causes development because some of the increase in income gets spent on human development such as education and health.
According to Ranis et al., economic growth and development is a two-way relationship. According to them, the first chain consists of economic growth benefiting human development, since economic growth is likely to lead families and individuals to use their heightened incomes to increase expenditures, which in turn furthers human development. At the same time, with the increased consumption and spending, health, education, and infrastructure systems grow and contribute to economic growth.

OSHIM THEOPHILUS CHISOM said...

In addition to increasing private incomes, economic growth also generates additional resources that can be used to improve social services (such as healthcare, safe drinking water, etc.). By generating additional resources for social services, unequal income distribution will be mitigated as such social services are distributed equally across each community, thereby benefiting each individual. Concisely, the relationship between human development and economic development can be explained in three ways. First, increase in average income leads to improvement in health and nutrition (known as Capability Expansion through Economic Growth). Second, it is believed that social outcomes can only be improved by reducing income poverty (known as Capability Expansion through Poverty Reduction). Lastly, social outcomes can also be improved with essential services such as education, healthcare, and clean drinking water (known as Capability Expansion through Social Services). John Joseph Puthenkalam's research aims at the process of economic growth theories that lead to economic development. After analyzing the existing capitalistic growth-development theoretical apparatus, he introduces the new model which integrates the variables of freedom, democracy and human rights into the existing models and argue that any future economic growth-development of any nation depends on this emerging model as we witness the third wave of unfolding demand for democracy in the Middle East. He develops the knowledge sector in growth theories with two new concepts of 'micro knowledge' and 'macro knowledge'. Micro knowledge is what an individual learns from school or from various existing knowledge and macro knowledge is the core philosophical thinking of a nation that all individuals inherently receive. How to combine both these knowledge would determine further growth that leads to economic development of developing nations.

2. THE LINKAGES AND INTERLINKAGES BETWEEN FINANCE AND DEVELOPMENT
Sustainable development is the Holy Grail of the international community, and the potential roles played by finance lies at the heart of the search effort. The extremely robust positive correlation between various measures of financial development on the one hand, and economic growth, on the other, is the bread and butter of thriving sub-disciplines within economics.
Financial services, foreign investment and international aid are essential for trade growth and long-term development in low-income and emerging countries. Improving access to these, and boosting their efficiency, will be crucial for implementation of the sustainable development goals. In traditional development economics, the importance of trade and finance was reflected in savings and foreign exchange gaps. However, the underlying concepts and operational frameworks need to be updated to reflect changing links between trade and investment, use of innovative financial instruments and services, and the evolution of development experiences and aspirations.
The closer integration of global value chains has strengthened the links between trade, finance and sustainable development. Increased emphasis on the role of services and SMEs drives further change. The evolution of regulatory regimes, particularly possible fragmentation through mega-regionals, raises concerns in developing countries about potential difficulties to access markets and their capacity to attract financial resources.

UGWUANYI CHRISTIAN TOCHUKWU, 2015/202664, ECONOMICS said...

CHAPTER TWO
DO A CRITICAL ANALYSIS OF THE LINKAGES AND INTER-LINKAGES BETWEEN FINANCE AND DEVELOPMENT
How does the structure and growth of the financial sector in a country affect the growth and development of its economy? How is the rural economy affected by improved access to financial services? What are the results of the new emphasis on improving the access of the poor to microfinance services? An explosion of empirical research in recent years provides new information that I use in this survey paper to address these issues. Many of the publications cited concerning the cross-country analysis of financial systems were based on the analysis of new multi-country data sets recently created covering the period 1960 to 1997.1 A recent AID conference on rural finance also provided important information summarizing the state of the art.
Questions about the relationship between finance and economic development
How have economists’ views evolved over time regarding the relationship between the financial system and growth?
Historically, economists have held strikingly different views about the importance of the financial system for economic growth (Levine, 1997). On the one hand, John Hicks argued that it played a critical role in England’s industrialization, while Joseph Schumpeter reasoned that well-functioning banks spurred technological innovation by identifying and funding the most innovative entrepreneurs. On the other hand, Joan Robinson felt that where enterprise led, then finance would follow. Levine observed that the pioneers of development economics often did not even mention finance in their work. Gurley and Shaw (1960) identified contributions that finance makes to the economy and Patrick (1966) observed that some countries pursued supply-leading policies which were intended to accelerate growth by expanding the financial system. Goldsmith (1969) is credited with being the first to document the growth in financial activities that occurs with overall growth in the economy, but he hesitated to conclude the direction of causality: Were financial factors responsible for accelerating economic development or did financial development reflect economic growth? Shaw (1973) and McKinnon (1973) were the first to describe how controls and regulations contributed to financial repression, which negatively affects economic growth.

OSHIM THEOPHILUS CHISOM 2015/204047 said...

Improvement of local financial services, capital markets, and institutional financial capacity are fundamental to development. Project finance is needed to build the hard infrastructure and skills base required to serve global markets. A large proportion of trade is financed by letters of credit, guarantees, and other instruments of trade finance, the availability and cost of which is central to the functioning of trade networks. To avoid dramatic reductions during the financial crisis, additional facilities such as the IFC’s Global Trade Liquidity Program and temporary trade finance windows were rolled out by regional development banks. A Global Trade Finance Facility, working closely with the WTO has been proposed as a potentially more permanent solution, together with an easing of regulatory conditions.
Official Development Assistance (ODA) remains a major source of revenue for Least Developed Countries (LDCs). This because it is difficult to have development without the financial backing. Development is the overall increase or improvement in the general welfare of the citizens of a country. This welfare improves when social amenities are provided, infrastructures built and many other things that could be done with the adequate finances. So there is a good relationship between finance and economic development.
A step up the development ladder, developing countries rely more on private foreign investment and remittances. Bridging the gap between aid and commerce requires support in building a favourable policy environment, creating public-private partnerships, marketable investments and growing competitive businesses able to connect to global markets. Returns, in terms of economic growth per percentage point of GDP invested, are higher in Africa than elsewhere, yet formidable barriers to foreign direct investment remain. Major investment, driven notably by Chinese demand for natural resources has occurred, yet the lack of multilateral disciplines for investment reduces the spread of robust best practices necessary to encourage investment and protect both investors and citizens.
3. GOVERNMENT FINANCING, ITS SOURCES AND THE ROLE OF GOVERNMENT FINANCE IN ECONOMIC DEVELOPMENT
Government finance could also be referred to as government revenue. Government finance refers to the revenue-generating ability of any government. They are the funds which are at the disposal of the government.
SOURCES OF GOVERNMENT FINANCE
Government revenue is one of the major components of public finance. It refers to the income or receipts of the government. The government collects revenue from various sources because it has to spend on various sectors of the economy to stimulate the economic development.
Generally, tax revenue and non-tax revenue are considered as the sources of government revenue. But in a broader sense, the government also receives revenue from foreign aid.

UGWUANYI CHRISTIAN TOCHUKWU, 2015/202664, ECONOMICS said...

Their models were narrowly focused on money, although their descriptive narratives were broader. For example, McKinnon noted the importance of finance by using the example of technology adoption by farmers. He thought economic growth would be slowed without efficient finance because it would be virtually impossible for farmers to self-finance the needed investment to speedily adopt new technologies. Wachtel (2001) noted that McKinnon forcefully argued for financial liberalization and, by 1990, concluded that “there is widespread agreement that flows of saving and investment should be voluntary and significantly decentralized in an open capital market at close to equilibrium interest rates”
Moving beyond money, Levine (1997) developed a comprehensive theoretical framework to explain how finance broadly defined can be conceptually linked to growth. This framework was used to organize his discussion regarding the explosion of research that emerged in the 1990s. The starting point is that financial markets and institutions may arise to ameliorate problems created by information and transaction frictions. Financial systems serve the primary function of facilitating the allocation of resources across space and time in an uncertain environment. These financial functions are expected to affect economic growth through capital accumulation and technological innovation. Levine’s framework helped guide subsequent empirical research that tested the relationship between finance and growth. Defined in this way, these functions help to justify the view that the financial sector operates like the “brain of the economy” (World Bank, 2001). 2. What does the empirical evidence reveal about the connection between financial development and growth?
Does the impact of finance vary by size or type of firm or industry?
Firms finance themselves in various ways. Some use more external finance than others so the banking structure can have a greater impact on them. Rajan and Zingales (1998) classified firms in 36 manufacturing sectors in more than 40 countries according to their use of external finance as reflected in U.S firms. They concluded that industries more dependent on external finance grow faster in more financially developed countries. The effect of financial development occurs mostly through growth in the number of establishments rather than through growth in average size of establishment.

OSHIM THEOPHILUS CHISOM 2015/204047 said...

1. Tax Revenue:
Tax is the most important source of government revenue. It is a compulsory payment to the government. The share of tax revenue in Nepal is 86.5% of total revenue in the fiscal year 2010/11. The tax revenue includes the following sources;

a. Customs: Export tax, import tax and excise duties are the major components of customs. It is a major source of government revenue in Nepal.

b. Tax on consumption & production of goods and services: The tax imposed on consumption and production of goods and services include the income collected from sales tax, value added tax, entertainment tax, hotel tax, road tax, etc.

c. The land revenue and registration tax: Land revenue and house registration charges are also the sources of government revenue. These are kind of direct tax.

d. Tax on a property, profit, and income: It includes the tax from public enterprises, private corporate bodies, individual income tax, profit tax, property tax, etc.

2. Non-tax Revenue: The share of non-tax revenue in Nepal is 13.5% of total revenue in the fiscal year 2010/11. It includes the following sources of government revenue;

a. Charges, fees, fines and forfeiture: Forms and registration charges, vehicle's license, judiciary administration, fines, and forfeiture are included under this heading.

b. Receipts from the sale of commodities and services: It includes the income from drinking water, irrigation, electricity, postal service, transportation, communication.

c. Dividends: It includes the dividends of government-owned financial institutions, trading concerns, industrial undertakings, service sectors etc.

d. Royalty and sale of assets: It includes the royalty from mining as well as other sources. It also includes the income from the sale of government land, building, properties, etc.

e. Miscellaneous items: The income received from miscellaneous items such as escheats ( government claim on the property of death persons having no any legal heir), is included under this heading.

f. Foreign Grants: Foreign grants is also an important source of government revenue of Nepal. The amount received by the government from neighboring nations, internationals institutions, World Banks, etc, in the form of bilateral and multilateral aids, are called foreign grants. Grants have not be paid by the government.

Importance (Role) of public revenue/public expenditure

a. Subsidies and grants: The governments these days, give subsidies and grants to different industries to enable them to increase the production of essential goods in the country. These subsidies and grants have the special place in the government expenditure of underdeveloped and backward countries. The provisions of subsidies and grants are possible only if the government have sufficient revenue.

b. Discourage the production of harmful goods: The governments often impose high taxes to discourage the production of harmful goods such as cigarette, alcohol, opium, etc. On the one side government collect higher revenue by imposing higher taxes on such goods and on the other sides, it helps to reduce the consumption of these goods.

c. Protection of infant industries: The infant industries are often given protection against the foreign competition through the tariff duties in the backward and underdeveloped countries. The objective of these duties is to enable the local industries to survive and grow in the home country.

d. Planned economic development: Public revenue also renders valuable helps in the planned economic development of the country. For eg; the government of India has raised the necessary funds to implement the five-year plans by levying various personal and commodities taxes.

e. Reducing economic inequalities: Public revenue also plays a vital role in reducing the economic inequalities in the capitalist country. For eg; the government can levy heavy taxes on the richer sections and spend the income on providing cheap food, cheap housing, free medical aids, etc to the poorer sections fo the society.

OSHIM THEOPHILUS CHISOM 2015/204047 said...

ROLE OF PUBLIC FINANCE IN ECONOMIC DEVELOPMENT
(i) Comprehensive Planning:
In an under-developed economy, there is a circular constellation of forces tending to act and react upon one another in such a way as to keep a poor country in a stationary state of under-development equilibrium. The vicious circle of under-developed equilibrium can be broken only by a comprehensive government planning of the process of economic development. Planning Commissions have been set up and institu¬tional framework built up.
(ii) Institution of Controls:
A high rate of investment and growth of output cannot be attained, in an under-developed country, simply as a result of the functioning of the market forces. The operation of these forces is hindered by the existence of economic rigidities and structural disequilibria. Economic development is not a spontaneous or automatic affair.
On the contrary, it is evident that there are automatic forces within the system tending to keep it moored to a low level. Thus, if an underdeveloped country does not wish to remain caught up in a vicious circle, the Government must interfere with the market forces to break that circle. That is why various controls have been instituted, e.g., price control, exchange control, control of capital issues, industrial licensing.
(iii) Social and Economic Overheads:
In the initial phase, the process of development, in an under-developed country, is held up primarily by the lack of basic social and economic overheads such as schools, technical institutions and research institutes, hospitals and railways, roads, ports, harbours and bridges, etc. To provide them requires very large investments.
Such investments will lead to the creation of external economies, which in their turn will provide incentives to the development of private enterprise in the field of industry as well as of agriculture. The Governments, therefore, go all out inbuilding up the infrastructure of the economy for initiating the process of economic growth.
Private enterprise will not undertake investments in social overheads. The reason is that the returns from them in the form of an increase in the supply of technical skills and higher standards of education and health can be realised only over a long period. Besides, these returns will accrue to the whole society rather than to those entrepreneurs who incur the necessary large expenditure on the creation of such costly social over-heads.

UGWUANYI CHRISTIAN TOCHUKWU, 2015/202664, ECONOMICS said...

CHAPTER THREE
DISCUSS GOVERNMENT FINANCING, ITS SOURCES AND DISCUSS DEVELOPMENT FINANCING IN NIGERIA AND THEIR SOURCES
OVERVIEW OF GOVERNMENT FINANCING
The proper role of government provides a starting point for the analysis of public finance. In theory, under certain circumstances, private markets will allocate goods and services among individuals efficiently (in the sense that no waste occurs and that individual tastes are matching with the economy's productive abilities). If private markets were able to provide efficient outcomes and if the distribution of income were socially acceptable, then there would be little or no scope for government. In many cases, however, conditions for private market efficiency are violated. For example, if many people can enjoy the same good at the same time (non-rival, non-excludable consumption), then private markets may supply too little of that good. National defence is one example of non-rival consumption, or of a public good. "Market failure" occurs when private markets do not allocate goods or services efficiently. The existence of market failure provides an efficiency-based rationale for collective or governmental provision of goods and services. Externalities, public goods, informational advantages, strong economies of scale, and network effects can cause market failures. Public provision via a government or a voluntary association, however, is subject to other inefficiencies, termed "government failure." Under broad assumptions, government decisions about the efficient scope and level of activities can be efficiently separated from decisions about the design of taxation systems (Diamond-Mirlees separation). In this view, public sector programs should be designed to maximize social benefits minus costs (cost-benefit analysis), and then revenues needed to pay for those expenditures should be raised rational investors would apply risk and return to the problem of an investment policy. Here, the twin assumptions of rationality and market efficiency lead to modern portfolio theory (the CAPM), and to the Black–Scholes theory for option valuation; it further studies phenomena and models where these assumptions do not hold, or are extended. "Financial economics", at least formally, also considers investment under "certainty" (Fisher separation theorem, "theory of investment value", Modigliani–Miller theorem) and hence also contributes to corporate finance theory.

OSHIM THEOPHILUS CHISOM 2015/204047 said...

Therefore, investment in them is not profitable from the standpoint of the private entrepreneurs, howsoever productive it may be from the broader interest of the society. This indicates the need for direct participation of the government by way of investment in social overheads, so that the rate of development is quickened.
Investments in economic overheads require huge outlays of capital which are usually beyond the capacity of private enterprise. Besides, the returns from such investments are quite uncertain and take very long to accrue. Private enterprise is generally interested in quick returns and will be seldom prepared to wait so long.
Nor can private enterprise easily mobilize resources for building up all these overheads. The State is in a far better position to find the necessary resources through taxation borrowing and deficit-financing sources not open to private enterprise. Hence, private enterprise lacks the capacity to undertake large-scale and comprehensive development. Not only that, it also lacks the necessary approach to development.
Hence, it becomes the duty of the government to build up the necessary infrastructure.
(iv) Institutional and Organisational Reforms:
It is felt that outmoded social institutions and defective organisation stand in the way of economic progress. The Government, therefore, sets out to introduce institutional and organisational reforms. We may mention here abolition of zamindari, imposi¬tion of ceiling on land holdings, tenancy reforms, introduction of co-operative farming, nationalisation of insurance and banks reform of managing agency system and other reforms introduced in India since planning was started.
(v) Setting up Financial Institutions:
In order to cope with the growing requirements for finance, special institutions are set up for providing agricultural, industrial and export finance. For instance, Industrial Finance Corporation, Industrial Development Bank and Agricultural Refinance and Development Corporation have been set up in India in recent years to provide the necessary financial- resources.
(vi) Public Undertakings:
In order to fill up important gaps in the industrial structure of the country and to start industries of strategic importance, Government actively enters business and launches big enterprises, e.g., huge steel plants, machine-making plants, heavy electrical work and heavy engineer¬ing works have been set up in India.

OSHIM THEOPHILUS CHISOM 2015/204047 said...

(vii) Economic Planning:
The role of government in development is further highlighted by the fact that under-developed countries suffer from a serious deficiency of all types of resources and skills, while the need for them is so great. Under such circumstances, what is needed is a wise and efficient allocation of limited resources. This can only be done by the State. It can be done through central planning according to a scheme of priorities well suited to the country’s conditions and need.

4. DISCUSS OTHER FINANCIAL ASPECTS OF DEVELOPMENT
Economic development is commonly discussed in terms of wealth, the labor force, output, and income. These real or "goods" aspects of development have been the center of attention in economic literature to the comparative neglect of financial aspects. Yet development is as- sociated with debt issue at some points in the economic system and corresponding accretions of financial assets elsewhere. It is accompanied, too, by the "institutionalization of saving and investment" that diversifies channels for the flow of loanable funds and multiplies varieties of financial claims. Development also implies, as cause or effect, change in market prices of financial claims and in other terms of trading in loanable funds. Development involves finance as well as goods
Analysis of economic change and development has customarily relied on an abbreviated set of social accounts. This set of accounts reports the net worth items of income, consumption, and saving as well as the asset item of investment or wealth accumulation. The accounts omit the financial side of change and development, that is the accumulation of debt and financial assets in their various forms. They are not a complete social balance sheet. One result is that financial analysis, left to its own devices, has been difficult to coordinate with analysis "on the side of goods." Another result, we suspect, is an inadvertent undervaluetion by economists of the role that finance plays in determining the pace and pattern of growth.
A. Deficits, Surpluses, and Balanced Budgets. It is not difficult, in principle, to design a set of social accounts that does incorporate finance. Final buyers of output, or spending units, may be divided into three groups: Spending units with balanced budgets keep their spending-on consumption, investment, or government goods and services-precisely balance with income. If they save, they invest a like amount, so that their financial assets do not change relative to outstanding debt including equity claims other than earned surplus.' Spending units with surplus budgets have an excess of income over spending on goods and services. If they save, their saving exceeds their own investment, so that their financial position improves. Their financial assets increase more or decrease less than their liabilities, and they are thereby suppliers of loanable funds. Spending units with deficit budgets permit spending to exceed income.
2 They demand loanable funds, releasing financial assets or issuing debt, so that their financial assets decline relative to the sum of their liabilities and equity other than earned surplus. A complete set of social accounts would report the flows of loanable funds between spending units and the corresponding changes in financial status.
3. There are financial corollaries following from the ex-post identity of receipts and expenditures, of saving and investment, and of surpluses and deficits for the aggregate of spending units. First, loanable funds supplied equal loanable funds acquired. Second, the increase of net

OSHIM THEOPHILUS CHISOM 2015/204047 said...

SOME OF THE FINACIAL ASPECTS OF DEVELOPMENT INCLUDE
• Financial intermediaries and intermediation
• Budgets; balance, deficit and surplus
• Debt accumulation and interest rates
• Money supply
These are regarded as some ot the financial aspects of development because in one way or the other, they impact on economic development.
In the case of financial intermediaries, it has to do with commercial banks in their functions of providing loans and savings outlets to the people. An efficient financial system in the commercial banks is going to translate to economic development.
Then again, budget is also another aspect of development. This is to say that the budget of an entity whether government or individual affects its spending. When government budget is deficit it means that the expenditure is more than the revenue. This means that the government spends more in maintain some economic activities in the economy. Keynesian economists believe that a deficit budget will bring about better economic growth than a surplus one.
Furthermore, the degree or level of debt of any nation is a huge negative on its development potentials. This is to say that any country that owes, usually find it difficult to achieve economic development because it has to devote part of its resources in financing it debts. This also applies to interest rates. High interest rates deter investors. And when there is low investment, there will not be significant increase in economic growth and development.


5. THE ROLE OF NON-GOVERNMENTAL ORGANIZATIONS IN DEVELOPMENT
Non-governmental organizations, commonly referred to as NGOs,[4] are usually non-profit and sometimes international organizations[5] independent of governments and international governmental organizations (though often funded by governments)[6] that are active in humanitarian, educational, health care, public policy, social, human rights, environmental, and other areas to effect changes according to their objectives. They are thus a subgroup of all organizations founded by citizens, which include clubs and other associations that provide services, benefits, and premises only to members. Sometimes the term is used as a synonym of "civil society organization" to refer to any association founded by citizens

OSHIM THEOPHILUS CHISOM 2015/204047 said...

5. THE ROLE OF NON-GOVERNMENTAL ORGANIZATIONS IN DEVELOPMENT
Non-governmental organizations, commonly referred to as NGOs, are usually non-profit and sometimes international organizations independent of governments and international governmental organizations (though often funded by governments) that are active in humanitarian, educational, health care, public policy, social, human rights, environmental, and other areas to effect changes according to their objectives. They are thus a subgroup of all organizations founded by citizens, which include clubs and other associations that provide services, benefits, and premises only to members. Sometimes the term is used as a synonym of "civil society organization" to refer to any association founded by citizens
NGOs are usually funded by donations, but some avoid formal funding altogether and are run primarily by volunteers. NGOs are highly diverse groups of organizations engaged in a wide range of activities, and take different forms in different parts of the world. Some may have charitable status, while others may be registered for tax exemption based on recognition of social purposes. Others may be fronts for political, religious, or other interests. Since the end of World War II, NGOs have had an increasing role in international development, particularly in the fields of humanitarian assistance and poverty alleviation.
Some NGOs provide public goods and services that governments from developing countries are unable to provide to society, due to lack of resources. Service-delivery NGOs can serve as contractors or collaborate with democratized government agencies to reduce cost associated with public goods. Capacity-building NGOs influence global affairs differently, in the sense that the incorporation of accountability measures in Southern NGOs affect "culture, structure, projects and daily operations". Advocacy and public education NGOs affect global affairs in its ability to modify behavior through the use of ideas. Communication is the weapon of choice used by advocacy and public-education NGOs in order to change people's actions and behaviors. They strategically construct messages to not only shape behavior, but to also socially mobilize communities in promoting social, political, or environmental changes. Movement NGOs mobilizes the public and coordinate large-scale collective activities to significantly push forward activism agenda.
In the post-Cold War era, more NGOs based in developed countries have pursued international outreach and became involved in local and national level social resistance and become relevant to domestic policy change in the developing world. In for the cases where national governments are highly sensitive to external influences via non-state actors, specialized NGOs have been able to find the right partners (e.g., China), building up solid working networks, locating a policy niche and facilitating domestic changes. As Reza Hasmath has illustrated, in the 21st century NGOs have vastly expanded and diversified their role to influence local and global governance and "[permeate] a multitude of political, economic and socio-cultural contexts." NGOs' relationship with states has accordingly changed, encompassing greater collaboration between state and non-state actors, and due to decentralization and cuts in state budgets, they are capable of delivering a wide range of services.

UGWUANYI CHRISTIAN TOCHUKWU, 2015/202664, ECONOMICS said...

Financial econometrics is the branch of financial economics that uses econometric techniques to parameterize the relationships suggested.
Although they are closely related, the disciplines of economics and finance are distinct. The “economy” is a social institution that organizes a society’s production, distribution, and consumption of goods and services, all of which must be financed.
Government finance is the study of the role of the government in the economy. It is the branch of economics which assesses the government revenue and government expenditure of the public authorities and the adjustment of one or the other to achieve desirable effects and avoid undesirable ones.
The federal government is responsible for collecting taxes on income, profits, and property, as well as import and export taxes and excise duties. It also runs the national transportation system. The petroleum sector provides over 83% of budgetary revenues. A large share of these revenues is redistributed to state governments. The budget is consistently in deficit. In 1998, debt financing amounted to $4.4 billion, but the 1999 budget provided for only $1.7 billion.
Public investment flourished during the oil boom years of the 1970s. When the oil market prices collapsed in the 1980s however, the Nigerian government maintained its high level of spending, thus acquiring substantial foreign debt. Although privatization efforts began in 1986, increased government spending outside the official budget since 1990 has damaged public finance reform. As a result, the federal deficit increased from 2.8% of GDP in 1990 to 9% in 1998. Privatization has picked up considerably in recent years, however; the government sold all state-owned banks, fuel distribution companies, and cement plants in 2000. Nigeria is still looking to unload the troubled Nigerian Airways and the state telephone company NITEL.
Nigeria's official foreign debt is about $32 billion, about three-fourths of which is owed to Paris Club countries. Nigeria reached a one year debt rescheduling agreement in August 2000, but after a year had passed the country was still unable to meet some of the requirements. The IMF agreed to give Nigeria a few more months to meet the conditions, but as of September 2001, it did not appear that even that deadline would be met.
The US Central Intelligence Agency (CIA) estimates that in 2000 Nigeria's central government took in revenues of approximately $3.4 billion and had expenditures of $3.6 billion. Overall, the government registered a deficit of approximately $200 million.

OSHIM THEOPHILUS CHISOM 2015/204047 said...

ROLES OF NON-GOVERNMENTAL ORGANIZATION
1. Development and Operation of Infrastructure: Community-based organizations and cooperatives can acquire, subdivide and develop land, construct housing, provide infrastructure and operate and maintain infrastructure such as wells or public toilets and solid waste collection services. They can also develop building material supply centers and other community-based economic enterprises. In many cases, they will need technical assistance or advice from governmental agencies or higher-level NGOs.
2. Supporting Innovation, Demonstration and Pilot Projects: NGO have the advantage of selecting particular places for innovative projects and specify in advance the length of time which they will be supporting the project - overcoming some of the shortcomings that governments face in this respect. NGOs can also be pilots for larger government projects by virtue of their ability to act more quickly than the government bureaucracy.
3. Facilitating Communication: NGOs use interpersonal methods of communication, and study the right entry points whereby they gain the trust of the community they seek to benefit. They would also have a good idea of the feasibility of the projects they take up. The significance of this role to the government is that NGOs can communicate to the policy-making levels of government, information bout the lives, capabilities, attitudes and cultural characteristics of people at the local level.
NGOs can facilitate communication upward from people to the government and downward from the government to the people. Communication upward involves informing government about what local people are thinking, doing and feeling while communication downward involves informing local people about what the government is planning and doing. NGOs are also in a unique position to share information horizontally, networking between other organizations doing similar work.
4. Technical Assistance and Training: Training institutions and NGOs can develop a technical assistance and training capacity and use this to assist both CBOs and governments.
5. Research, Monitoring and Evaluation: Innovative activities need to be carefully documented and shared - effective participatory monitoring would permit the sharing of results with the people themselves as well as with the project staff.
6. Advocacy for and with the Poor: In some cases, NGOs become spokespersons or ombudsmen for the poor and attempt to influence government policies and programs on their behalf. This may be done through a variety of means ranging from demonstration and pilot projects to participation in public forums and the formulation of government policy and plans, to publicizing research results and case studies of the poor. Thus NGOs play roles from advocates for the poor to implementers of government programs; from agitators and critics to partners and advisors; from sponsors of pilot projects to mediators

OSHIM THEOPHILUS CHISOM 2015/204047 said...

ROLE OF NGO’S IN ECONOMIC DEVELOPMENT
The essence of non-governmental organizations remains the same: to provide basic services to those who need them. Many NGOs have demonstrated an ability to reach poor people, work in inaccessible areas, innovate, or in other ways achieve things better than by official agencies. Many NGOs have close links with poor communities. Some are membership organizations of poor or vulnerable people; others are skilled at participatory approaches. Their resources are largely additional; they complement the development effort of others, and they can help to make the development process more accountable, transparent and participatory. They not only "fill in the gaps" but they also act as a response to failures in the public and private sectors in providing basic services.
Mirroring the support given to northern NGOs, official funding of southern NGOs has taken two forms: the funding of initiatives put forward by southern NGOs, and the utilization of the services of southern NGOs to help donors achieve their own aid objectives.
Donor funding of southern NGOs has received a mixed reception from recipient governments. Clear hostility from many non-democratic regimes has been part of more general opposition to any initiatives to support organizations beyond the control of the state. But even in democratic countries, governments have often resisted moves seen as diverting significant amounts of official aid to non-state controlled initiatives, especially where NGO projects have not been integrated with particular line ministry programs.
The common ground between donors and NGOs can be expected to grow, especially as donors seek to make more explicit their stated objectives of enhancing democratic processes and strengthening marginal groups in civil society. However, and in spite of a likely expansion and deepening of the reverse agenda, NGOs are likely to maintain their wariness of too close and extensive an alignment with donors.

UGWUANYI CHRISTIAN TOCHUKWU, 2015/202664, ECONOMICS said...

Public finance management
Collection of sufficient resources from the economy in an appropriate manner along with allocating and use of these resources efficiently and effectively constitute good financial management. Resource generation, resource allocation and expenditure management (resource utilization) are the essential components of a public financial management system.
The following subdivisions form the subject matter of public finance.
1. Public expenditure
2. Public revenue
3. Public debt
4. Financial administration
5. Federal finance
SOURCES OF GOVERNMENT FINANCING
Public sources of funding include those which are compulsory and pre-paid; meaning paid before the need for care is identified or care is accessed. These are often taxes.
A compulsory source means the government requires some or all people to make the payment, whether they use the health service or not.
Some important distinctions are as follows:
• Direct taxes are those paid by households and companies to the government or other public agencies. This includes income tax, payroll tax (including mandatory social health insurance contributions) and corporate or profit tax.
• Indirect taxes are paid to the government or other public agency via a third party (retailer or supplier). The tax is based on what a household or company spends and includes value-added tax, sales tax, and excise tax on alcohol, tobacco and import duties.
• Non-tax revenues are from state-owned companies, including natural resource revenues such as oil and gas.
• Financing from external (foreign) sources is considered ‘public’ when the funds flow through recipient governments.
Public sources of funding can be managed by private entities, such as private insurers managing a public insurance scheme. This happens in the Netherlands and India currently, and in Georgia prior to 2013.
Financing of government expenditures
Government expenditures are financed primarily in three ways:
• Government revenue
o Taxes
o Non-tax revenue (revenue from government-owned corporations, sovereign wealth funds, sales of assets, or seigniorage)
• Government borrowing
• Money creation
How a government chooses to finance its activities can have important effects on the distribution of income and wealth (income redistribution) and on the efficiency of markets (effect of taxes on market prices and efficiency). The issue of how taxes affect income distribution is closely related to tax incidence, which examines the distribution of tax burdens aftermarket adjustments are taken into account. Public finance research also analyzes effects of the various types of taxes and types of borrowing as well as administrative concerns, such as tax enforcement.
Taxation is the central part of modern public finance. Its significance arises not only from the fact that it is by far the most important of all revenues but also because of the gravity of the problems created by the present day tax burden.[7] The main objective of taxation is raising revenue. A high level of taxation is necessary in a welfare State to fulfill its obligations.

UGWUANYI CHRISTIAN TOCHUKWU, 2015/202664, ECONOMICS said...

Taxation is used as an instrument of attaining certain social objectives i.e. as a means of redistribution of wealth and thereby reducing inequalities. Taxation in a modern Government is thus needed not merely to raise the revenue required to meet its ever-growing expenditure on administration and social services but also to reduce the inequalities of income and wealth. Taxation is also needed to draw away money that would otherwise go into consumption and cause inflation to rise.[8]
A tax is a financial charge or other levy imposed on an individual or a legal entity by a state or a functional equivalent of a state (for example, tribes, secessionist movements or revolutionary movements). Taxes could also be imposed by a subnational entity. Taxes consist of direct tax or indirect tax, and may be paid in money or as corvée labor. A tax may be defined as a "pe cuniary burden laid upon individuals or property to support the government a payment exacted by legislative authority."[9] A tax "is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority" and is "any contribution imposed by government [ . . .] whether under the name of toll, tribute, tallage, gabel, impost, duty, custom, excise, subsidy, aid, supply, or other name."[10]
• There are various types of taxes, broadly divided into two heads – direct (which is proportional) and indirect tax (which is differential in nature):
• Stamp duty, levied on documents
• Excise tax (tax levied on production for sale, or sale, of a certain good)
• Sales tax (tax on business transactions, especially the sale of goods and services)
o Value added tax (VAT) is a type of sales tax
o Services taxes on specific services
• Road tax; Vehicle excise duty (UK), Registration Fee (USA), Regco (Australia), Vehicle Licensing Fee (Brazil) etc.
• Gift tax
• Duties (taxes on importation, levied at customs)
• Corporate income tax on corporations (incorporated entities)
• Wealth tax
• Personal income tax (may be levied on individuals, families such as the Hindu joint family in India, unincorporated associations, etc.)
Debt
Governments, like any other legal entity, can take out loans, issue bonds and make financial investments. Government debt (also known as public debt or national debt) is money (or credit) owed by any level of government; either central or federal government, municipal government or local government. Some local governments issue bonds based on their taxing authority, such as tax increment bonds or revenue bonds.
As the government represents the people, government debt can be seen as an indirect debt of the taxpayers. Government debt can be categorized as internal debt, owed to lenders within the country, and external debt, owed to foreign lenders. Governments usually borrow by issuing securities such as government bonds and bills. Less creditworthy countries sometimes borrow directly from commercial banks or international institutions such as the International Monetary Fund or the World Bank.
Most government budgets are calculated on a cash basis, meaning that revenues are recognized when collected and outlays are recognized when paid. Some consider all government liabilities, including future pension payments and payments for goods and services the government has contracted for but not yet paid, as government debt. This approach is called accrual accounting, meaning that obligations are recognized when they are acquired, or accrued, rather than when they are paid. This constitutes public debt.
Seigniorage
Seigniorage is the net revenue derived from the issuing of currency. It arises from the difference between the face value of a coin or bank note and the cost of producing, distributing and eventually retiring it from circulation. Seigniorage is an important source of revenue for some national banks, although it provides a very small proportion of revenue for advanced industrial countries.[citation needed]
Public finance through state enterprise
Further information: State-owned enterprise

UGWUANYI CHRISTIAN TOCHUKWU, 2015/202664, ECONOMICS said...

Public finance in centrally planned economies has differed in fundamental ways from that in market economies. Some state-owned enterprises generated profits that helped finance government activities. The government entities that operate for profit are usually manufacturing and financial institutions, services such as nationalized healthcare do not operate for a profit to keep costs low for consumers. The Soviet Union relied heavily on turnover taxes on retail sales. Sale of natural resources, and especially petroleum products, were an important source of revenue for the Soviet Union.
In market-oriented economies with substantial state enterprise, such as in Venezuela, the state-run oil company PSDVA provides revenue for the government to fund its operations and programs that would otherwise be profit for private owners. In various mixed economies, the revenue generated by state-run or state-owned enterprises are used for various state endeavors; typically the revenue generated by state and government agencies goes into a sovereign wealth fund. An example of this is the Alaska Permanent Fund and Singapore's Temasek Holdings.
Various market socialist systems or proposals utilize revenue generated by state-run enterprises to fund social dividends, eliminating the need for taxation altogether.
Government finance is the study of the role of the government in the economy. It is the branch of economics which assesses the government revenue and government expenditure of the public authorities and the adjustment of one or the other to achieve desirable effects and avoid undesirable ones.
The federal government is responsible for collecting taxes on income, profits, and property, as well as import and export taxes and excise duties. It also runs the national transportation system. The petroleum sector provides over 83% of budgetary revenues. A large share of these revenues is redistributed to state governments. The budget is consistently in deficit. In 1998, debt financing amounted to $4.4 billion, but the 1999 budget provided for only $1.7 billion.
Public investment flourished during the oil boom years of the 1970s. When the oil market prices collapsed in the 1980s however, the Nigerian government maintained its high level of spending, thus acquiring substantial foreign debt. Although privatization efforts began in 1986, increased government spending outside the official budget since 1990 has damaged public finance reform. As a result, the federal deficit increased from 2.8% of GDP in 1990 to 9% in 1998. Privatization has picked up considerably in recent years, however; the government sold all state-owned banks, fuel distribution companies, and cement plants in 2000. Nigeria is still looking to unload the troubled Nigerian Airways and the state telephone company NITEL.
Nigeria's official foreign debt is about $32 billion, about three-fourths of which is owed to Paris Club countries. Nigeria reached a one year debt rescheduling agreement in August 2000, but after a year had passed the country was still unable to meet some of the requirements. The IMF agreed to give Nigeria a few more months to meet the conditions, but as of September 2001, it did not appear that even that deadline would be met.
The US Central Intelligence Agency (CIA) estimates that in 2000 Nigeria's central government took in revenues of approximately $3.4 billion and had expenditures of $3.6 billion. Overall, the government registered a deficit of approximately $200 million.

UGWUANYI CHRISTIAN TOCHUKWU, 2015/202664, ECONOMICS said...

SOURCES OF GOVERNMENT FINANCING
Public sources of funding include those which are compulsory and pre-paid; meaning paid before the need for care is identified or care is accessed. These are often taxes.
A compulsory source means the government requires some or all people to make the payment, whether they use the health service or not.
Some important distinctions are as follows:
• Direct taxes are those paid by households and companies to the government or other public agencies. This includes income tax, payroll tax (including mandatory social health insurance contributions) and corporate or profit tax.
• Indirect taxes are paid to the government or other public agency via a third party (retailer or supplier). The tax is based on what a household or company spends and includes value-added tax, sales tax, and excise tax on alcohol, tobacco and import duties.
• Non-tax revenues are from state-owned companies, including natural resource revenues such as oil and gas.
• Financing from external (foreign) sources is considered ‘public’ when the funds flow through recipient governments.
Public sources of funding can be managed by private entities, such as private insurers managing a public insurance scheme. This happens in the Netherlands and India currently, and in Georgia prior to 2013.
Financing of government expenditures
Government expenditures are financed primarily in three ways:
• Government revenue
o Taxes
o Non-tax revenue (revenue from government-owned corporations, sovereign wealth funds, sales of assets, or seigniorage)
• Government borrowing
• Money creation
How a government chooses to finance its activities can have important effects on the distribution of income and wealth (income redistribution) and on the efficiency of markets (effect of taxes on market prices and efficiency). The issue of how taxes affect income distribution is closely related to tax incidence, which examines the distribution of tax burdens aftermarket adjustments are taken into account. Public finance research also analyzes effects of the various types of taxes and types of borrowing as well as administrative concerns, such as tax enforcement.
Taxation is the central part of modern public finance. Its significance arises not only from the fact that it is by far the most important of all revenues but also because of the gravity of the problems created by the present day tax burden.[7] The main objective of taxation is raising revenue. A high level of taxation is necessary in a welfare State to fulfill its obligations. Taxation is used as an instrument of attaining certain social objectives i.e. as a means of redistribution of wealth and thereby reducing inequalities.

UGWUANYI CHRISTIAN TOCHUKWU, 2015/202664, ECONOMICS said...

Taxation in a modern Government is thus needed not merely to raise the revenue required to meet its ever-growing expenditure on administration and social services but also to reduce the inequalities of income and wealth. Taxation is also needed to draw away money that woulThere are various types of taxes, broadly divided into two heads – direct (which is proportional) and indirect tax (which is differential in nature):
• Stamp duty, levied on documents
• Excise tax (tax levied on production for sale, or sale, of a certain good)
• Sales tax (tax on business transactions, especially the sale of goods and services)
o Value added tax (VAT) is a type of sales tax
o Services taxes on specific services
• Road tax; Vehicle excise duty (UK), Registration Fee (USA), Regco (Australia), Vehicle Licensing Fee (Brazil) etc.
• Gift tax
• Duties (taxes on importation, levied at customs)
• Corporate income tax on corporations (incorporated entities)
• Wealth tax
• Personal income tax (may be levied on individuals, families such as the Hindu joint family in India, unincorporated associations, etc.)
Debt
Governments, like any other legal entity, can take out loans, issue bonds and make financial investments. Government debt (also known as public debt or national debt) is money (or credit) owed by any level of government; either central or federal government, municipal government or local government. Some local governments issue bonds based on their taxing authority, such as tax increment bonds or revenue bonds.
As the government represents the people, government debt can be seen as an indirect debt of the taxpayers. Government debt can be categorized as internal debt, owed to lenders within the country, and external debt, owed to foreign lenders. Governments usually borrow by issuing securities such as government bonds and bills. Less creditworthy countries sometimes borrow directly from commercial banks or international institutions such as the International Monetary Fund or the World Bank.
Most government budgets are calculated on a cash basis, meaning that revenues are recognized when collected and outlays are recognized when paid. Some consider all government liabilities, including future pension payments and payments for goods and services the government has contracted for but not yet paid, as government debt. This approach is called accrual accounting, meaning that obligations are recognized when they are acquired, or accrued, rather than when they are paid. This constitutes public debt.

UGWUANYI CHRISTIAN TOCHUKWU, 2015/202664, ECONOMICS said...

Seigniorage
Seigniorage is the net revenue derived from the issuing of currency. It arises from the difference between the face value of a coin or bank note and the cost of producing, distributing and eventually retiring it from circulation. Seigniorage is an important source of revenue for some national banks, although it provides a very small proportion of revenue for advanced industrial countries.[citation needed]
Public finance through state enterprise
Further information: State-owned enterprise
Public finance in centrally planned economies has differed in fundamental ways from that in market economies. Some state-owned enterprises generated profits that helped finance government activities. The government entities that operate for profit are usually manufacturing and financial institutions, services such as nationalized healthcare do not operate for a profit to keep costs low for consumers. The Soviet Union relied heavily on turnover taxes on retail sales. Sale of natural resources, and especially petroleum products, were an important source of revenue for the Soviet Union.
In market-oriented economies with substantial state enterprise, such as in Venezuela, the state-run oil company PSDVA provides revenue for the government to fund its operations and programs that would otherwise be profit for private owners. In various mixed economies, the revenue generated by state-run or state-owned enterprises are used for various state endeavors; typically the revenue generated by state and government agencies goes into a sovereign wealth fund. An example of this is the Alaska Permanent Fund and Singapore's Temasek Holdings.
Various market socialist systems or proposals utilize revenue generated by state-run enterprises to fund social dividends, eliminating the need for taxation altogether.









CHAPTER FOUR
DISCUSS OTHER FINANCIAL ASPECTS OF DEVELOPMENT
BORROWING
Governments, like any other legal entity, can take out loans, issue bonds and make financial investments. Government debt (also known as public debt or national debt) is money (or credit) owed by any level of government; either central or federal government, municipal government or local government. Some local governments issue bonds based on their taxing authority, such as tax increment bonds or revenue bonds.
As the government represents the people, government debt can be seen as an indirect debt of the taxpayers. Government debt can be categorized as internal debt, owed to lenders within the country, and external debt, owed to foreign lenders.

UGWUANYI CHRISTIAN TOCHUKWU, 2015/202664, ECONOMICS said...

Governments usually borrow by issuing securities such as government bonds and bills. Less creditworthy countries sometimes borrow directly from commercial banks or international institutions such as the International Monetary Fund or the World Bank.
Most government budgets are calculated on a cash basis, meaning that revenues are recognized when collected and outlays are recognized when paid. Some consider all government liabilities, including future pension payments and payments for goods and services the government has contracted for but not yet paid, as government debt. This approach is called accrual accounting, meaning that obligations are recognized when they are acquired, or accrued, rather than when they are paid. This constitutes public debt.
SEIGNIORAGE
Seigniorage is the net revenue derived from the issuing of currency. It arises from the difference between the face value of a coin or bank note and the cost of producing, distributing and eventually retiring it from circulation. Seigniorage is an important source of revenue for some national banks, although it provides a very small proportion of revenue for advanced industrial countries.
Government expenditures
Economists classify government expenditures into three main types. Government purchases of goods and services for current use are classed as government consumption. Government purchases of goods and services intended to create future benefits – such as infrastructure investment or research spending – are classed as government investment. Government expenditures that are not purchases of goods and services, and instead just represent transfers of money – such as social security payments – are called transfer payments.
Government operations
Government operations are those activities involved in the running of a state or a functional equivalent of a state (for example, tribes, secessionist movements or revolutionary movements) for the purpose of producing value for the citizens. Government operations have the power to make, and the authority to enforce rules and laws within a civil, corporate, religious, academic, or other organization or group.
Income distribution
• Income distribution – Some forms of government expenditure are specifically intended to transfer income from some groups to others. For example, governments sometimes transfer income to people that have suffered a loss due to natural disaster. Likewise, public pension programs transfer wealth from the young to the old. Other forms of government expenditure which represent purchases of goods and services also have the effect of changing the income distribution. For example, engaging in a war may transfer wealth to certain sectors of society. Public education transfers wealth to families with children in these schools. Public road construction transfers wealth from people that do not use the roads to those people that do (and to those that build the roads).

UGWUANYI CHRISTIAN TOCHUKWU, 2015/202664, ECONOMICS said...

Income Security
• Employment insurance
• Health Care
• Public financing of campaigns.

CHAPTER FIVE
CRITICALLY DISCUSS THE CONCEPT OF NON-GOVERNMENTAL ORGANISATION (NGO) AND THEIR IMPACT ON DEVELOPMENT

ABSTRACT
Non-governmental organizations, commonly referred to as NGOs, are usually non-profit and sometimes international organizations independent of governments and international governmental organizations (though often funded by governments) that are active in humanitarian, educational, health care, public policy, social, human rights, environmental, and other areas to effect changes according to their objectives. They are thus a subgroup of all organizations founded by citizens, which include clubs and other associations that provide services, benefits, and premises only to members. Sometimes the term is used as a synonym of "civil society organization" to refer to any association founded by citizens,[11] but this is not how the term is normally used in the media or everyday language, as recorded by major dictionaries. The explanation of the term by NGO.org (the non-governmental organizations associated with the United Nations) is ambivalent. It first says an NGO is any non-profit, voluntary citizens' group which is organized on a local, national or international level, but then goes on to restrict the meaning in the sense used by most English speakers and the media: Task-oriented and driven by people with a common interest, NGOs perform a variety of service and humanitarian functions, bring citizen concerns to Governments, advocate and monitor policies and encourage political participation through provision of information.

HISTORY OF NGOs
International non-governmental organizations have a history dating back to at least the late eighteenth century. It has been estimated that by 1914, there were 1083 NGOs. International NGOs were important in the anti-slavery movement and the movement for women's suffrage, and reached a peak at the time of the World Disarmament Conference. The vital role of NGOs and other "major groups" in sustainable development was recognized in Chapter 27 of Agenda 21, leading to intense arrangements for a consultative relationship between the United Nations and non-governmental organizations. It has been observed that the number of INGO founded or dissolved matches the general "state of the world", rising in periods of growth and declining in periods of crisis.
FUNDS FOR NGOs
NGOs are usually funded by donations, but some avoid formal funding altogether and are run primarily by volunteers. NGOs are highly diverse groups of organizations engaged in a wide range of activities, and take different forms in different parts of the world. Some may have charitable status, while others may be registered for tax exemption based on recognition of social purposes. Others may be fronts for political, religious, or other interests. Since the end of World War II, NGOs have had an increasing role in international development, particularly in the fields of humanitarian assistance and poverty alleviation.

UGWUANYI CHRISTIAN TOCHUKWU, 2015/202664, ECONOMICS said...

ROLE OF NGOs IN DEVELOPMENT COOPERATION
The essence of non-governmental organizations remains the same: to provide basic services to those who need them. Many NGOs have demonstrated an ability to reach poor people, work in inaccessible areas, innovate, or in other ways achieve things better than by official agencies. Many NGOs have close links with poor communities. Some are membership organizations of poor or vulnerable people; others are skilled at participatory approaches. Their resources are largely additional; they complement the development effort of others, and they can help to make the development process more accountable, transparent and participatory. They not only "fill in the gaps" but they also act as a response to failures in the public and private sectors in providing basic services.

1. Development and Operation of Infrastructure: Community-based organizations and cooperatives can acquire, subdivide and develop land, construct housing, provide infrastructure and operate and maintain infrastructure such as wells or public toilets and solid waste collection services. They can also develop building material supply centers and other community-based economic enterprises. In many cases, they will need technical assistance or advice from governmental agencies or higher-level NGOs.
2. Supporting Innovation, Demonstration and Pilot Projects: NGO have the advantage of selecting particular places for innovative projects and specify in advance the length of time which they will be supporting the project - overcoming some of the shortcomings that governments face in this respect. NGOs can also be pilots for larger government projects by virtue of their ability to act more quickly than the government bureaucracy.
3. Facilitating Communication: NGOs use interpersonal methods of communication, and study the right entry points whereby they gain the trust of the community they seek to benefit. They would also have a good idea of the feasibility of the projects they take up. The significance of this role to the government is that NGOs can communicate to the policy-making levels of government, information about the lives, capabilities, attitudes and cultural characteristics of people at the local level.
4. Technical Assistance and Training: Training institutions and NGOs can develop a technical assistance and training capacity and use this to assist both CBOs and governments.
5. Research, Monitoring and Evaluation: Innovative activities need to be carefully documented and shared - effective participatory monitoring would permit the sharing of results with the people themselves as well as with the project staff.
6. Advocacy for and with the Poor: In some cases, NGOs become spokespersons or ombudsmen for the poor and attempt to influence government policies and programs on their behalf. This may be done through a variety of means ranging from demonstration and pilot projects to participation in public forums and the formulation of government policy and plans, to publicizing research results and case studies of the poor. Thus NGOs play roles from advocates for the poor to implementers of government programs; from agitators and critics to partners and advisors; from sponsors of pilot projects to mediators.

UGWUANYI CHRISTIAN TOCHUKWU, 2015/202664, ECONOMICS said...

CONTRIBUTIONS TOWARDS DEVELOPMENT
1. Service-Delivery:
NGOs provide public goods and services that governments from developing countries are unable to provide to society, due to lack of resources. Service-delivery NGOs can serve as contractors or collaborate with democratized government agencies to reduce cost associated with public goods. Capacity-building NGOs influence global affairs differently, in the sense that the incorporation of accountability measures in Southern NGOs affect "culture, structure, projects and daily operations". Advocacy and public education NGOs affect global affairs in its ability to modify behavior through the use of ideas. Communication is the weapon of choice used by advocacy and public-education NGOs in order to change people's actions and behaviors.

2. Interactions With Formal Private Sector:
NGOs vary greatly in the extent to which they ensure beneficiary participation within their own programs. At one extreme are NGOs whose orientation and competence are very similar to the private sector firms with whom they compete for contracts in project implementation or service delivery. The nonprofit sector as a whole competes with the for-profit sector for skilled labor, sales, and reduced cost services provision (Steinberg, 1987). Such NGOs may be very efficient (and in strong demand) as service deliverers but are oriented to meeting the requirements of bureaucratic funding agencies and are unlikely to use participatory processes.
3. Interactions With The State
As it is mentioned already, one of the fundamental reasons that NGOs have received so much attention of late is that they are perceived to be able to do something that national governments cannot or will not do. However, it is important to recognize that relations between NGOs and governments vary drastically from region to region and country to country.
4. Healthy State-NGO Relationship:
A healthy relationship is only conceivable when both parties share common objectives. If the governmental commitment to improving of the provision of urban services is weak, NGOs will find dialogue and collaboration frustrating or even counter-productive. Likewise, repressive governments will be wary of NGOs which represent the poor or victimized.
Where government has a positive social agenda (or even where individual ministries do) and where NGOs are effective, there is the potential for a strong, collaborative relationship. This does not mean the sub-contracting of placid NGOs, but a "genuine partnership between NGOs and the government to work on a problem facing the country or a region... based on mutual respect, acceptance of autonomy, independence, and pluralism of NGO opinions and positions."
5. Fostering an Enabling Environment
The State has various instruments it can use, for good or ill, to influence the health of the NGO sector (Brown 1990). The level of response can be non-interventionist, active encouragement, partnership, co-option or control.



AGU UGOCHUKWU 2015/198881 ECONOMICS said...

CHAPTER ONE
1.0 DISCUSS THE CONCEPT OF FINANCE DEVELOPMENT USING GLOBAL AND DOMESTIC STYLIZZED FACTS
1.1 Concept of Development
Some scholars such as Williamson, Buttrick, Water Crouse, Viner etc. define economic development as the process that brings about permanent increase in per capita income.Other scholars like Meier, Baldwin etc. define economic development as the process leading to long-lasting increase in national income instead of per capita income. Bernard, Okun and W. Richardson define economic development as sustained improvement in wellbeing, which is reflected by increasing flow of goods and services. Simon Kuznets defines economic development as a long term rise in the capacity to supply increasing diverse economic goods to its population, the growing capacity based on advancing technology and the institutional and ideological adjustment that demands. TAYEBWA (1992:261) states that development is a broad term which should not be limited to mean economic development, economic welfare or material wellbeing as per Tayebwa, development in general includes improvements in economic, social and political aspects of whole society like security, culture, social activities and political institutions.According to TODARO (1981:56) refers to development as a multi-dimensional process involving the reorganization and reorientation of the entire economic and social systems. According to PERROUX (1978:65), defines development as "the combination of mental and social changes among the population which decide to increase its real and global products, cumulatively and in sustainable manner." ROGERS (1990:30) adds "development is a long participatory process of social change in the society whose objective is the material and social progress for the majority of population through a better understanding of their environment" Dudley Seers while elaborating on the meanic vng of development suggests that while there can be value judgements on what is development and what is not, it should be a universally acceptable aim of development to make for conditions that lead to a realisation of the potentials of human personality. Seers outlined several conditions that can make for achievement of this aim: The ncapacity to obtain physical necessities, particularly food; A job (not necessarily paid employment) but including studying, working on a family farm or keeping house; Equality, which should be considered an objective in its own right; Participation in government; Belonging to a nation that is truly independent, both economically and politically; and Adequate educational levels. Development means “improvement in country’s economic and social conditions”. More specially, it refers to improvements in way of managing an area’s natural and human resources. In order to create wealth and improve people’s lives.
Amartya Sen has twice changed our thinking about what we mean by development. His ‘capabilities approach’ led to introduction of the UN Human Development Index, and subsequently the Multidimensional Poverty Index, both of which aim to measure development in this broader sense.Then in 1999 Sen moved the goalposts again with his argument that freedoms constitute not only the means but the ends in development. Sen's view is now widely accepted: development must be judged by its impact on people, not only by changes in their income but more generally in terms of their choices, capabilities and freedoms; and we should be concerned about the distribution of these improvements, not just the simple average for a society. Development also carries a connotation of lasting change. But to define development as an improvement in people”s well being does not do justice to what the term means to most of us. Development consists of more than improvements in the well-being of citizens, even broadly

UDEAFOR MARYANN CHISOM, 2014/191757(3/4), ECONOMICS said...

CHAPTER TWO
2.0 SOURCES OF GOVRNMENT FINANCING (Government revenue)
Sources of government revenue include charges, fees and earnings, fines, seignorage and debt, regulatory taxes and general taxes.
Charges, Fees and Earnings
Charges and fees are levied for publicly provided commodities (i.e. goods and services) which are not (pure or nearly pure) public goods. It is efficient – or a least cost social option – for socially desirable commodities to be provided publicly if either the private sector would have underprovided them or if it can provide them only at a greater social resource cost than the government. If this requirement is met then the government should collect charges or fees for commodities it provides from those who benefit from them. However, there should be full recovery of charges and fees from direct beneficiaries only if the good or service in question is a "private good" having, furthermore, no positive or negative spillovers for citizens other than direct beneficiaries. An example of a publicly provided service which has no or minimal spillovers is the provision of adjudication by courts of law in the case of disputes between citizens (or torts). This is not the case for many publicly provided goods like education, curative health services, anti-poverty services or agricultural extension services where positive spillover benefits suggest that less than full cost recovery from direct beneficiaries is desirable.
Since governments and private sectors vary in their capacity in different countries, the socially desirable menu of private commodities that government should provide will vary across countries. There is inadequate country specific research to determine what this menu is. Indeed, no generally accepted method exists of determining whether a given good or service should be provided by the government, and if so at what price. Nevertheless, there is a general belief that this source of finance is underutilised by government in that inadequate charges and fees are recovered for goods that governments do provide, despite the existence of positive spillovers.
A quite distinct type of fee is that charged for citizen's use of assets held by the government acting as a custodian of national assets. The latter includes natural resources such as from forests and mines and national treasures such as wildlife parks and historical monuments. In the case of fees for assets held custodially, it is hard for anyone to argue that sale of these treasures (for example the Taj Mahal or Corbett National Park) is socially desirable. In the case, say, of a nation's mineral wealth it is possible to sell assets (e.g. through mining concessions and leases) and, indeed, many countries do so. For assets which the government does not sell, the marginal cost of maintaining these assets should, where relevant, first be provided for. However, in setting charges, a second consideration is the longevity and exhaustibility of these assets. In principle, future generations also have rights to these assets so prices should be set high enough to ensure that the current generation does not overexploit it. While principles for the pricing of exhaustible resources have been extensively studied, they are seldom applied in practice and both royalties and entry fees at heritage sites are generally reckoned to be below what is socially desirable.

UDEAFOR MARYANN CHISOM, 2014/191757(3/4), ECONOMICS said...

Earnings of the government, other than the sort of charges and fees discussed above typically consist of net revenues from the sale of commodities by public sector undertakings.
Consider, first, manufactured outputs of public sector undertakings. In principle, there should be no net gain to the government from public undertakings, and even a loss in case of increasing returns to scale, if the government prices these commodities at their marginal cost, as is socially desirable. To the extent that price exceeds marginal cost, prices charged are akin to a poll tax on citizens, who are, after all, the ultimate owners of these undertakings. The incidence of this poll tax depends on the importance of the commodities in question in the consumption basket of different groups. While there is largely a consensus on pricing of products of public sector undertakings, there is also a general view that public sector undertakings in most developing countries produce many goods which the private sector could produce more efficiently. Consequently, in many countries an additional temporary source of funds for the government is capital receipts from the privatisation of public enterprises.
Seignorage and Debt:
These are actually very different sources of finance. Seignorage is the purchasing power transferred to the government by the private sector when and if it provides money which serves as a medium of exchange for the economy. In fact, in most modern economies the government is the monopoly provider of "high powered money". To the extent that the purchasing power transferred is equal to the social marginal cost of providing money, this is an economically efficient means of raising revenue. However, in this case the government would have no purchasing power left over to finance other government activity. In fact in the presence of increasing returns, the government would need to finance money creation from other sources. To the extent that seignorage reflects monopoly rents earned by the government, it is similar to a a poll tax as in the case of rents captured by public sector enterprises. The incidence of this "tax" on different social groups is difficult to discern but depends on their direct and indirect demand for money.
The term seignorage often includes a related source of revenue, commonly known as the "inflation tax", which arise when an increase in the price level lowers the real value of the government's debt to the public. Since the value of non-financial assets is largely unaffected by inflation, the incidence of this tax is on the holders of unindexed financial assets (including government bonds) and also on wage earners to the extent that wages are not indexed for inflation. So the inflation tax is commonly believed to be a regressive tax putting a disproportionate burden on the poor whose main source of income is wages. Concommitant effects on labour and capital allocation decisions of individuals and firms suggest that the inflation tax also has efficiency costs apart from distribution costs. The inflation tax may reflect government moral hazard wherein it uses a source of finance more than is socially desirable, simply because it has the power to do so. Research suggests that, in contrast to charges and fees, this source of finance is overutilised by most governments.

UDEAFOR MARYANN CHISOM, 2014/191757(3/4), ECONOMICS said...

The debt of the government, excluding debt from money creation, represents the accumulation of borrowings made by the government. Debt finance has a role when government spending finances the creation of long lived assets. To the extent that these assets benefit future generations of citizens, the benefits principle of taxation suggests that the debt should be paid for out of taxes extracted from members of generations who benefit from the assets. However, this is a risky source of finance. As with seignorage, government moral hazard may lead it to exploit its debt raising power more than it should, for example to finance current expenditure not resulting in asset creation. Furthermore debt finance has an impact on the behaviour of private citizens and possibly on their resource allocation decisions, that may add to the cost of debt finance. For example, the Ricardian Equivalence principle suggests that current debt holders in the private sector consider debt to be the same as taxes to the extent that they care about their descendents and the tax burden that the descendents will have to bear. However, Ricardian Equivalence, in its pure form, which asserts that debt and taxes have identical behavioural impacts, does not have much empirical support.
A type of debt that has a more limited justification socially is external debt, wherein the government borrows from citizens of other countries. While such debt can in principle also be used to redistribute the burden of financing government across generations, external debt is seldom as long dated as internal debt. Short term external debt, like short term internal debt, is possibly only justified to smooth finances in the presence of temporary illiquidity of the government.
Regulatory taxes
Regulatory or "Pigouvian" taxes are taxes the government should levy on privately provided or privately consumed commodities when there are negative externalities or spillovers which lead to the private cost of provision or consumption being below the social cost. Since the government gets revenue from such taxes while, at the same time bringing private costs of provision or consumption in line with social costs by "making the polluter pay", such taxes have a double benefit. The importance of this phenomenon, known as the "double dividend hypothesis", is the subject matter of much ongoing research. It is generally believed that this source of revenue is underexploited by most governments. Some countries, such as Singapore, which do rely heavily on corrective taxes are able to raise as much as five percent of GDP from these sources. Besides environmental taxes and regulatory taxes linked to externalities, a related type of taxes to which Pigouvian principles apply are taxes on demerit goods or "sin taxes". Excises on liquor and tobacco are examples.
Since, by breaking laws citizen's reveal that their private cost of doing so is below the cost to society, fines for breaking the law are a form of Pigouvian tax. However, the amount of the tax in the case of fines is the ex ante, expected value of the fine, in the event that the law breaker is caught and penalised. In designing fines, pure externality considerations must be tempered by taking into account the deterrent and (negative) incentive effect of fines on behaviour and also the principle of natural justice which asserts that "the penalty should not exceed the crime". This is the subject of much ongoing research. There has not been much assessment of whether fines are over or underused by the government, though inadequate enforcement of laws in many developing countries makes it likely that ex ante fines do not sufficiently penalise offenders.

UDEAFOR MARYANN CHISOM, 2014/191757(3/4), ECONOMICS said...

General taxes
To the extent that governments cannot collect adequate revenues via sources of finance discussed above, with the possible exception of earnings from public sector production and the inflation tax, the government must turn to general taxes to finance its activities and the provision of public goods. This is an important point: General taxes are a residual source of finance that should be resorted to only if other sources of finance are socially inadequate for government resource needs. There is one important qualification to this which suggests even further reliance on sources of finance other than general taxes: Since feasible general taxes are inevitably distortionary and have possibly negative consequences on income distribution, distortionary and distribution costs of all sources of finance should be equated at the margin even if this entails over-use of some of the sources of finance discussed above. Indeed, it is the distributional impact of the entire government budget, comprising revenue, subsidies and transfers, and expenditure, that matters rather than the impact of revenue alone. No research appears to exist which examines the extent to which the impact of revenue, taken by itself, on distribution should be taken into account. For example, despite a negative distributional impact it is entirely possible that some (or perhaps much) reliance on the inflation tax is socially desirable.
Despite an enormous amount of research on general taxes, including some outstandingly brilliant and Nobel Prize winning contributions, there is still an inadequate understanding of the socially desirable design of general taxes at different levels of development. For example, "optimal tax theory", which examines the design of least cost taxes when some activities or commodities cannot be taxed and when the government needs to raise a given amount of revenue, yields a prescription for different rates of tax on different commodities. Such differentiated taxes are impossible for the bureaucracy (or tax administration) of any existing country to administer.
There are at least seven sources of inadequacy in existing theoretical research on optimal tax systems.
First, given the great analytical difficulty of the subject, research has tended to look at taxes individually (or at a sub-set of available taxes) rather than looking for an optimal tax system which takes into account all potentially feasible taxes.
Second the assumed structure of economic activity in this research leaves out many real world features. For example, much research is for the case of economies with perfectly competitive markets. Yet, market failures, which loom large in most developing economies, are significant and will inevitably change the structure of socially desirable taxes if they are taken into account.
Third, constraints imposed by the capacity of the bureaucracy on feasible tax structures are largely neglected. As with differentiated taxes, taking account of these constraints will radically alter the structure of optimal taxes.
Fourth, besides bureaucratic capacity, that bureaucratic goals differ from social goals is another major problem which has only begun to be addressed. One key manifestation of lack of consonance of goals is bureaucratic corruption which severely affects the government's ability to raise resources through taxes.
Fifth, optimal tax research largely takes the government's revenue requirement as given. Clearly, if the social cost of revenue collection exceeds social benefits from expenditure financed by it, expenditure should be reduced along with revenue raising.
Sixth, a point related to the previous one, this research assumes away transactions costs including costs to citizens of complying with tax obligations. Seventh, it is almost always politically convenient to use tax policy to promote non-revenue objectives by way of tax concessions.

UDEAFOR MARYANN CHISOM, 2014/191757(3/4), ECONOMICS said...

Real world tax systems are, consequently riddled with tax concessions, reducing their usefulness for raising revenue. In principle, such "tax expenditures" can be socially desirable if social objectives can be achieved at less cost to society than via direct subsidies or government expenditure. However, such non-revenue objectives are not incorporated in optimal tax examinations.
In consequence, practical advice for general tax policy design has had to largely ignore prescriptions derived from theory and uses rules of thumb to try to design tax systems which incorporate, more or less, Adam Smith's cannons of taxation (see the Annex) of certainty, simplicity and convenience, and economy. Besides these, among the most widely accepted rules of thumb is that general taxes should have broad bases and low rates to minimise negative economic effects on prices and minimise incentives of citizens not to comply with tax obligations. A second widely accepted prescription is for few rates of tax, given administrative and legal difficulty with differentiated tax rates. Third, convenience and simplicity for the unsophisticated or poorly educated taxpayer dictates the use of simple taxes such as "presumptive taxes" for such taxpayers. Other than this no widely applicable general rules exist, though as a corollary to the broad base proposition, minimising tax concessions is usually also advocated. For individual taxes, however, additional rules of thumb do exist. For example, paralleling empirical reality, increased reliance on the income tax with economic development is advocated so that general taxes closely reflect the ability to pay of citizens. Taxes on international trade, since they distort allocation of resources in line with comparative advantage, are viewed with disfavour except for the least developed countries, where the relative ease with which they can be collected is important. For domestic taxes, taxing intermediate goods used in production is viewed with disfavour as this distorts domestic resource allocation.

Multi-level Government
The discussion above has neglected an important factor which raises additional issues in the design of revenue raising systems. That is multiple levels of government, nationally and internationally, with differing responsibilities for provision of goods and services. In principle, revenues should be raised by the level of government that is able to do so at least cost and then shared to permit each level of government to finance its expenditures, subsidies and transfer payments. However, problems arise in implementing this prescription, especially in the presence of differing views about the role of government and moral hazard when one level of government collects taxes on behalf of another. For example, while a unified world tax system probably has the least social cost, countries may not agree as to what the appropriate scope of government activity is. Even if they did, it may not be possible to design a revenue sharing system which all countries would find acceptable and reliable. Similar problems arise between levels of government within a country. Consequently, ensuring that most governments have their own revenue raising powers and sources is a problem that needs to be addressed both in theory and in practice.

UDEAFOR MARYANN CHISOM, 2014/191757(3/4), ECONOMICS said...

CHAPTER THREE
3.0 OTHER FINANCIAL ASPECTS OF DEVELOPMENT
Financial sector development in developing countries and emerging markets is part of the private sector development strategy to stimulate economic growth and reduce poverty. The Financial sector is the set of institutions, instruments, and markets. It also includes the legal and regulatory framework that permit transactions to be made through the extension of credit.[1] Fundamentally, financial sector development concerns overcoming “costs” incurred in the financial system. This process of reducing costs of acquiring information, enforcing contracts, and executing transactions results in the emergence of financial contracts, intermediaries, and markets. Different types and combinations of information, transaction, and enforcement costs in conjunction with different regulatory, legal and tax systems have motivated distinct forms of contracts, intermediaries and markets across countries in different times.
The five key functions of a financial system in a country are: (i) information production ex ante about possible investments and capital allocation; (ii) monitoring investments and the exercise of corporate governance after providing financing; (iii) facilitation of the trading, diversification, and management of risk; (iv) mobilization and pooling of savings; and (v) promoting the exchange of goods and services.
Financial sector development takes place when financial instruments, markets, and intermediaries work together to reduce the costs of information, enforcement and transactions. A solid and well-functioning financial sector is a powerful engine behind economic growth. It generates local savings, which in turn lead to productive investments in local business. Furthermore, effective banks can channel international streams of private remittances. The financial sector therefore provides the rudiments for income-growth and job creation.
There are ample evidence suggesting that financial sector development plays a significant role in economic development. It promotes economic growth through capital accumulation and technological advancement by boosting savings rate, delivering information about investment, optimizing the allocation of capital, mobilizing and pooling savings, and facilitating and encouraging foreign capital inflows. A meta-analysis of 67 empirical studies finds that financial development is robustly associated with economic growth.
Countries with better-developed financial systems tend to enjoy a sustained period of growth, and studies confirm the causal link between the two: financial development is not simply a result of economic growth; it is also the driver for growth.
Additionally, it reduces poverty and inequality by enabling and broadening access for the poor and vulnerable groups, facilitating risk management by reducing their vulnerability to shocks, and raising investment and productivity that generates higher income.
Financial sector development also assists the growth of small and medium-sized enterprises (SMEs) by giving them with access to finance. SMEs are typically labor-intensive and create more jobs than large firms, which contributes significantly to economic development in emerging economies.
Additionally, financial sector development also entails establishing robust financial policies and regulatory framework. The absence of adequate financial sector policies could have disastrous outcome, as illustrated by the global financial crisis.

UDEAFOR MARYANN CHISOM, 2014/191757(3/4), ECONOMICS said...

Financial sector development has heavy implication on economic development‐‐both when it functions and malfunctions.
The crisis has challenged conventional thinking in financial sector policies and sparked debate on how best to achieve sustainable development. To effectively reassess and re-implement financial policies, publications such as Global Financial Development Report (GFDR) by the World Bank and Global Financial Stability Report (GFSR) by the IMF can play an important role.
The Global Financial Development Report, a new initiative by the World Bank, highlights issues that have come to the forefront after the crisis and presents policy recommendation to strengthen systems and avoid similar crisis in the future. By gathering data and knowledge on financial development around the world, the GFDR report aims to put into spotlight issues of financial development and hopes to present analysis and expert views on current policy issues.
In Malaysia, the Asian Institute of Finance was established by Bank Negara Malaysia and Securities Commission Malaysia to develop human capital in the financial services industry.
Why are the 4 PIGS called the 4 PIGS, e.g., Portugal, Italy, Spain, and Greece. In Italy, they have 20,000 tree specialists for Sicily. Tell me how many trees are on Socily? Probably not enough for one tree socialist let alone 20,000. This is a form of socialism. The Italian Government is the 2nd largest in the EU but but a small percentage pay income taxes which puts the government budget in the negative and they.can't deficit spend. The tax collectors were waiting at the Swiss border and searching Ferraris for huge amounts of money the Italians were putting in the Swiss Banks to hide money from taxes. So, how can the convergent afford infrastructure development if no one pays taxes. They all plead poverty. So, all theses PIGS are spending more for pensions and job padding they cannot afford. They go to the EU pleading poverty, when in reality they are systemically bankrupt. The economy has changed but their spending habits have remained the same and they keep talking out IMF, WORLD BANK, and EU Loans. I would kick theses PIGS out of the EU. The EU is not just a currency union, but a government that controls every facet of EU life. I am so happy for the BEXIT. All the PIGS wanted to emigrate to England and live on their nice welfare system. I believe you cannot combine socialist countries with.capitalist countries under a so called currency union. I believe the EU has gone beyond a currency union. Those Syrians, I would put them in planes, put a parachute on their backs, kick them out the door over Australia, and have them make a life in Australia. Where did England send their criminals? To Australia to let the Lord deal with them and.now they are blokes and birds. I was in Sidney, it was like San Francisco but they drive on the opposite side, so when you are cruising the street, you have to look left instead of right. I am.not an EU, RUSSIA, China, North Korea, Pakistan, Iran, or Assad Syria lover. I think Assad should be taken to The Hague and handed for gassing his own people. It's like failed nations like Cuba, South Sudan, Venezuela, even Egypt have military governments and let their people starve. Castro used to live like a king on an island off Cuba, and let his people live in poverty. The same thing it's happening with Maduro in Venezuela with a military form of government. They have the highest inflation in South America and gas subsidies. The Russian underground economy is taking over the above ground economy. Their courts are corrupt. They have cronie capitalism where certain business and business people are favored and government businesses are favored over private capitalis. businesses. Certain business men have been run out of Russia over trumped up court charges.

Daniel Onyeka 2015/200715 said...

CHAPTER ONE
INTRODUCTION
An efficient financial system provides an enabling environment for economic growth and development. Financial system is comprised of financial institutions and markets that play major role in promoting economic growth through various channels. This very aim is realized through the intermediary roles of both banking and non-banking financial institutions, which underlie strict policies that regulate and guide the operations of such institutions. Financial innovation and intermediation enhance financial development mechanism. Financial intermediaries acquire fund in the form of deposits, premiums, financial claims etc., and transform the funds so acquired into assets that are attractive and preferred by the public. This way, financial intermediaries perform the economic functions of:
(i) Providing maturity transformation,
(ii) reduction of risk through diversification,
(iii) cutting of cost of contracting as well as information processing, and
(iv) provision of payment mechanism.
The above economic functions propel financial development as funds are effectively transferred from net savers to the investors. In a competitive banking sector, as explained by Carbo et al. (2003), borrowing rates are higher while lending rates are lower, thus the transformation of household savings into productive capital investment is faster .Availability of investible funds thus stimulates economic growth by increasing the level of economic activities hence real output. Schumpeter (1911) argues that financial services provided by financial institutions are critical drivers of innovation and growth.
For better or worse, the financial sector plays a critical role in modern market economies. While it can be a force for development by providing basic payment and transaction services, intermediating society’s savings to its best uses, offering households, enterprises and governments risk management tools, it can also be a source of fragility, as we were reminded during the recent Global Financial Crisis, the ongoing Eurozone crisis, and by numerous banking crises in emerging and developing markets. Theoretical and empirical research on the role of the financial sector in the real economy has made significant progress over the past two decades. Progress in empirical research has been driven by the increasing availability of new data sources at the cross-country level, but also within-country, by the exploitation of policy experiments and by the use of randomised control trials (RCT) gauging specific interventions at the local level. The initial focus on financial depth and stability has been broadened towards efficiency and, most importantly, outreach of the financial system, while the original supply-side focus has been complemented by more and more studies on demand-side constraints. Notwithstanding this progress, there are many open questions; the dynamic nature of financial systems, with new players and products and therefore new opportunities and risks, reinforces a continuously full and open research agenda in this area. While there is wide-ranging agreement that financial sector deepening is an important part of the overall development agenda, less is known about the exact channels and mechanisms. Similarly, our knowledge on which policies, institutions and interventions can help financial sector deepening at which stage of economic and financial development, and how to avoid overshooting and financial fragility,is still limited.

financing as a supplement. Sweden is

Daniel Onyeka 2015/200715 Department of economics said...

FINANCING FOR DEVELOPMENT – UN APPROACH
Financing for development is focused on new stakeholders in the financing of development cooperation. This is one of the most important UN approaches to supporting poor countries' financing of development and poverty reduction ­- a necessity when official development assistance is no longer sufficient.The world is moving forward in many different areas, but to achieve the Global Goals for Sustainable Development, which define a sustainable world free from extreme poverty, we must mobilize resources from many different sources other than traditional state aid.
The concept of "Financing for Development" was first adopted at a UN conference in Mexico in 2002. Today's development financing is primarily concerned with the financing of the Global Goals for Sustainable Development in low-income countries. When working with these goals, development financing plays a far more important role than in the previous work on the Millennium Development Goals.
Financing for development is one of the most important UN approaches to support poor countries' financing of their development and the fight against poverty. The idea is to identify and coordinate new actors that can contribute to development both financially and with their expertise and competence. In order to reach the enormous sums that are required for a truly sustainable development, both private and public capital flows, other than official development assistance, must be involved. We need to engage actors such as banks, insurance companies and private donors while also working to develop tax systems in developing countries, which in many ways represent a huge potential resource.
Official development assistance (ODA) remains the basis for the financing of development cooperation with development financing as a supplement. Sweden is working for all rich countries to live up to the agreement to designate at least 0.7 per cent of their gross national income (GNI) to development cooperation. At present, only a few countries meet this goal, among them Sweden. When traditional aid is combined with development financing there is an increase in total resources and also the probability of eradicating poverty.
In several countries, including Germany, the UK and the Netherlands, financing for development is gradually being integrated into development cooperation. The supranational organization OECD as well as private and philanthropic actors have also begun working with development financing. Sida has been working with a series of projects in this area since 2014.

Daniel Onyeka 2015/200715 Department of economics Danie said...

CHAPTER TWO
LINKAGES BETWEEN FINANCE AND DEVELOPMENT
They shall be discoursed umder the following headings-
How have economists’ views evolved over time regarding the relationship between the financial system and growth?
Historically, economists have held strikingly different views about the importance of the financial system for economic growth (Levine, 1997). On the one hand, John Hicks argued that it played a critical role in England’s industrialization, while Joseph Schumpeter reasoned that well-functioning banks spurred technological innovation by identifying and funding the most innovative entrepreneurs. On the other hand, Joan Robinson felt that where enterprise led, then finance would follow. Levine observed that the pioneers of development economics often did not even mention finance in their work. He notes that Stern’s (1989) review of development economics does not discuss financial systems, not even in the section of omitted topics. Gurley and Shaw (1960) identified contributions that finance makes to the economy and Patrick (1966) observed that some countries pursued supply-leading policies which were intended to accelerate growth by expanding the financial system. Goldsmith (1969) is credited with being the first to document the growth in financial activities that occurs with overall growth in the economy, but he hesitated to conclude the direction of causality: Were financial factors responsible for accelerating economic development or did financial development reflect economic growth? Shaw (1973) and McKinnon (1973) were the first to describe how controls and regulations contributed to financial repression, which negatively affects economic growth. Their models were narrowly focused on money, although their descriptive narratives were broader. For example, McKinnon noted the importance of finance by using the example of technology adoption by farmers. He thought economic growth would be slowed without efficient finance because it would be virtually impossible for farmers to self-finance the needed investment to speedily adopt new technologies. Wachtel (2001) noted that McKinnon forcefully argued for financial liberalization and, by 1990, concluded that “there is widespread agreement that flows of saving and investment should be voluntary and significantly decentralized in an open capital market at close to equilibriuminterest rates” (p. 336). Moving beyond money, Levine (1997) developed a comprehensive theoretical framework to explain how finance broadly defined can be conceptually linked to growth. This framework was used to organize his discussion regarding the explosion of research that emerged in the 1990s. The starting point is that financial markets and institutions may arise to ameliorate problems created by information and transaction frictions. Financial systems serve the primary function of facilitating the allocation of resources across space and time in an uncertain environment. This primary function was broken into five basic functions
• facilitate the trading, hedging, diversifying, and pooling of risk,
• allocate resources,
• monitor managers and exert corporate control,
• mobilize savings, and
• facilitate the exchange of good and services.
These financial functions are expected to affect economic growth through capital accumulation and technological innovation. Levine’s framework helped guide subsequent empirical research that tested the relationship between finance and growth. Defined in this way, these functions help to justify the view that the financial sector operates like the “brain of the economy” (World Bank, 2001).

Daniel Onyeka 2015/200715 Department of economics said...

What doWesome other studies. They hoped this measurewould better capture the ability of intermediaries to research and identify profitable ventures, monitor and control managers, ease risk management, and facilitate resource mobilization. They concluded that financial intermediary development produced faster rates of economic growth and total factor productivity growth, but the results were ambiguous for physical capital accumulation or private savings rates. Thus they interpreted their results as being consistent with the Schumpeterian view that financial intermediaries affect economic development primarily by influencing total factor productivity growth rather than through increased savings or growth in the capital stock.

Does

Daniel Onyeka 2015/200715 Department of economics said...

CHAPTER THREE
GOVERNMENT FINANCING
Government expenditures are financed primarily in three ways:
Government revenue
Taxes
Non-tax revenue (revenue from government-owned corporations, sovereign wealth funds, sales of assets, or seigniorage)
How a government chooses to finance its activities can have important effects on the distribution of income and wealth (income redistribution) and on the efficiency of markets (effect of taxes on market prices and efficiency). The issue of how taxes affect income distribution is closely related to tax incidence, which examines the distribution of tax burdens after market adjustments are taken into account. Public finance research also analyzes effects of the various types of taxes and types of borrowing as well as administrative concerns, such as tax enforcement.
GOVERNMENT REVENUE
Government revenue is money received by a government. It is an important tool of the fiscal policy of the government and is the opposite factor of government spending. Revenues earned by the government are received from sources such as taxes levied on the incomes and wealth accumulation of individuals and corporations and on the goods and services produced, exports and imports, non-taxable sources such as government-owned corporations' incomes, central bank revenue and capital receipts in the form of external loans and debts from international financial institutions. It is used to benefit the country. Governments use revenue to better develop the country, to fix roads, build homes, fix schools etc. The money that government collects pays for the services that is provided for the people. The sources of finance used by the central government are mainly taxes paid by the public.
TAXES
Taxation is the central part of modern public finance. Its significance arises not only from the fact that it is by far the most important of all revenues but also because of the gravity of the problems created by the present day tax burden. The main objective of taxation is raising revenue. A high level of taxation is necessary in a welfare State to fulfill its obligations. Taxation is used as an instrument of attaining certain social objectives i.e. as a means of redistribution of wealth and thereby reducing inequalities. Taxation in a modern Government is thus needed not merely to raise the revenue required to meet its ever-growing expenditure on administration and social services but also to reduce the inequalities of income and wealth. Taxation is also needed to draw away money that would otherwise go into consumption and cause inflation to rise.
There are various types of taxes, broadly divided into two heads – direct (which is proportional) and indirect tax (which is differential in nature):
Stamp duty, levied on documents
Excise tax (tax levied on production for sale, or sale, of a certain good)
Sales tax (tax on business transactions, especially the sale of goods and services)
Value added tax (VAT) is a type of sales tax

SEIGNIORAGE
Seigniorage is the net revenue derived from the issuing of currency. It arises from the difference between the face value of a coin or bank note and the cost of producing, distributing and eventually retiring it from circulation. Seigniorage is an important source of revenue for some national banks, although it provides a very small proportion of revenue for advanced industrial countries.[

NGWU CHIDIMMA said...

CHAPTER ONE
DISCUSSING THE CONCEPT OF FINANCE AND DEVELOPMENT USING GLOBAL AND DOMESTIC STYLIZED FACT
FINANCE:
Finance is the process of raising funds or capital for any kind of expenditure. Consumers, business firms, and governments often do not have the funds available to make expenditures, pay their debts, or complete other transactions and must borrow or sell equity to obtain the money they need to conduct their operations. Savers and investors, on the other hand, accumulate funds which could earn interest or dividends if put to productive use. These savings may accumulate in the form of savings deposits, savings and loan shares, or pension and insurance claims; when loaned out at interest or invested in equity shares, they provide a source of investment funds. Finance is the process of channeling these funds in the form of credit, loans, or invested capital to those economic entities that most need them or can put them to the most productive use. The institutions that channel funds from savers to users are called financial intermediaries. They include commercial banks, savings banks, savings and loan associations, and such nonbank institutions as credit unions, insurance companies, pension funds, investment companies, and finance companies.
Three broad areas in finance have developed specialized institutions, procedures, standards, and goals: business finance, personal finance, and public finance. In developed nations, an elaborate structure of financial markets and institutions exists to serve the needs of these areas jointly and separately.
Business finance is a form of applied economics that uses the quantitative data provided by accounting, the tools of statistics, and economic theory in an effort to optimize the goals of a corporation or other business entity. The basic financial decisions involved include an estimate of future asset requirements and the optimum combination of funds needed to obtain those assets. Business financing makes use of short-term credit in the form of trade credit, bank loans, and commercial paper. Long-term funds are obtained by the sale of securities (stocks and bonds) to a variety of financial institutions and individuals through the operations of national and international capital markets.
Personal finance deals primarily with family budgets, the investment of personal savings, and the use of consumer credit. Individuals typically obtain mortgages from commercial banks and savings and loan associations to purchase their homes, while financing for the purchase of consumer durable goods (automobiles, appliances) can be obtained from banks and finance companies. Charge accounts and credit cards are other important means by which banks and businesses extend short-term credit to consumers. If individuals need to consolidate their debts or borrow cash in an emergency, small cash loans can be obtained at banks, credit unions, or finance companies.

Daniel Onyeka 2015/200715 Department of economics said...

DEVELOPMENT FINANCING IN NIGERIA
One of the cardinal economic objectives of the developing countries, including Nigeria is to achieve high economic growth that will lead to rapid economic development and reduce poverty. From whatever theoretical angle that one may look at it, economic growth indicates the ability of an economy to increase production of goods and services with the stock of capital and other factors of accumulation, with the right combination of other factors of production will bring about their higher output growth. Economic growth is theoretically and empirically established to be dependent on capital accumulation or investment.
Attaining a sustainable economic balance has been a major goal pursued by the government of Nigeria and other countries. This is because the economy is the hub of every nation. The process of growth and development of an economy hinges on the availability of certain infrastructural facilities required to accelerate various economic activities. This plausibly offers an explanation to why government of every country exert her authority towards maintaining a medium or multiple streams of revenue through which adequate funds are made available towards achieving set goals for the nation. Consequently, the government of every country (developed, developing, and underdeveloped) depends on these funds in order to execute its social and economic obligations to the public and these obligations include provision of infrastructures such as roads, hospitals schools and the rest of them. As such, these funds generated by the government to provide goods and services to the general public are termed “public funds.

Domestic Sources of Finance
The Nigerian economy, like any other, comprises the public and private sectors and both engage in investment expenditures. Both sectors have to save and/or borrow in order to meet their investment requirements. The immediate source of funds for requirement is own savings. As mentioned earlier, the government, which represent the public sector, collects revenue from both tax and non-tax sources.
After meeting its expenditure requirements on purchases of goods and services, the government uses whatever surplus to increase its stock of capital i.e. investment. This is also true of economic agents in the private sector. When investment expenditure exceeds the level of savings, the private and the public sectors mainly borrow from financial institutions. The financial institutions that actively engage in providing funds or credit for investment in Nigeria include deposit money banks (DMBs), mortgage institutions, and development finance institutions. Other sources include the non-bank financial institutions like the insurance companies, the capital market, mutual trust funds, pension funds, equipment leasing companies, cooperatives and thrift societies, etc. all these are regarded as formal sources of investment finance in Nigeria because they are well organized with appropriate records and, their operations are relatively open and regulated. Altogether, they provide the largest portion of the domestic funds for investment.
The emergence of

Daniel Onyeka 2015/200715 Department of economics said...

CHAPTER FOUR
NON GOVERNMENTAL ORGANISATIONS
Non-governmental organizations commonly referred to as NGOs, are usually non-profit and sometimes international organizations independent of governments and international governmental organizations (though often funded by governments) that are active in humanitarian, educational, health care, public policy, social, human rights, environmental, and other areas to effect changes according to their objectives.They are thus a subgroup of all organizations founded by citizens, which include clubs and other associations that provide services, benefits, and premises only to members. Sometimes the term is used as a synonym of "civil society organization" to refer to any association founded by citizens, but this is not how the term is normally used in the media or everyday language, as recorded by major dictionaries. The explanation of the term by NGO.org (the non-governmental organizations associated with the United Nations) is ambivalent. It first says an NGO is any non-profit, voluntary citizens' group which is organized on a local, national or international level, but then goes on to restrict the meaning in the sense used by most English speakers and the media: Task-oriented and driven by people with a common interest, NGOs perform a variety of service and humanitarian functions, bring citizen concerns to Governments, advocate and monitor policies and encourage political participation through provision of information.
NGOs are usually funded by donations, but some avoid formal funding altogether and are run primarily by volunteers. NGOs are highly diverse groups of organizations engaged in a wide range of activities, and take different forms in different parts of the world. Some may have charitable status, while others may be registered for tax exemption based on recognition of social purposes. Others may be fronts for political, religious, or other interests. Since the end of World War II, NGOs have had an increasing role in international development, particularly in the fields of humanitarian assistance and poverty alleviation

IMPACTS OF NGOS ON DEVELOPMENT
Development NGOs are committed to working towards economic, social or political development in developing countries. The Norwegian bilateral aid agency Norwegian Agency for Development Cooperation (NORAD) (2004: 6) defines development-oriented NGOs as organisations that “attempt to improve social, economic and productive conditions and are found both as small community-based organisations at village and district levels, and as large professional development agencies at state or national level”. One can distinguish between Northern and Southern NGOs within the diverse group of non-state actors. Additional distinctions are often made between advocacy and rights-based NGOs; relief, welfare and charity NGOs; network NGOs and professional support NGOs. However, it is important to bear in mind that in practice the boundaries between these categories rapidly become blurred. Potentially, NGOs can participate in all phases of the policy cycle and on all levels of the public sector; as contributors to policy discussion and formulation, advocates and lobbyists, service deliverers (operators), monitors (watchdogs) of rights and of particular interests, and as innovators introducing new concepts and initiatives. Some NGOs combine two or more of these activities, whereas others choose to focus on one. However, in this paper the primary focus will be the traditional NGO role of filling gaps in state-provided public education. We will trace the evolution of NGO activities on the supply side of capacity development, making occasional references to advocacy and watchdog activities on the demand side of service provision.

Daniel Onyeka 2015/200715 Department of economics said...

CONCLUSION
Financial system has always played a major role in supporting economic activity. Obviously, all developed countries have one thing in common and that is a developed financial system. The central bank of Nigeria over the years has continued to put in place action plans geared towards promoting sustainable economic growth. Since 1986, the monetary authorities have adopted various measures with the aim of deepening the financial system and reducing the level of financial repression embedded in the system. This effort stems from monetary policies to adequate regulation and supervision of the Nigerian financial system. But, mastering the key drivers of growth is critical to understanding the mechanism and interrelationship between finance and growth. This is very important since such knowledge will have significant regulatory and policy implications. Nigeria has a long history of financial reforms which were at different staged introduced with the aim of fostering economic development.
From our findings we conclude that an efficient financial system provides an enabling environment for growth and development.








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Armendariz de Aghion, Beatriz, “Development Banking,” Journal of Development Economics, Vol. 58, No. l, February 1999, pp. 83-100
Beck, Thorsten, Asli Demirguc-Kunt, Ross Levine, and Vojislav Maksimovic, “Financial Structure and Economic Development: Firm, Industry and Country Evidence,” in Asli Demirguc-Kunt and Ross Levine, editors, Financial Structure and Economic Growth: A Cross-Country Comparison of Banks, Markets, and Development. Cambridge: The MIT Press, 2001.
Demirguc-Kunt, Asli, and Ross Levine, editors. Financial Structure and Economic Growth: A Cross-Country Comparison of Banks, Markets, and Development. Cambridge: The MIT Press, 2001.
Gruber, Jonathan (2005). Public Finance and Public Policy. New York: Worth Publications. p. 2. ISBN 0-7167-8655-9.
Goldsmith, Raymond W. Financial Structure and Development. New Haven, Conn.: Yale University Press, 1969.
Ibembe, J.D.B. 2007. “NGOs, Millennium Development Goals and Universal Primary Education in Uganda: a theoretical explanation”. In: Human Services Today,
https://www.businessplannigeria.com.ng/financing-investment-growth-nigeria-experience/
https://www.omicsonline.org/open-access/sources-of-public-funds-and-economic-prosperity-the-nigerian
http://www.nigeriavillagesquare.com/articles/the-role-of-non-governmental-organizations-ngos-in-development.
Jain, P C (1974). The Economics of Public Finance
Levine, Ross, “Financial Development and Economic Growth: Views and Agenda,” Journal of
Economic Literature, Vol. 35, No. 2, June 1997, pp. 688-726. Shaw, Edward S. Financial Deepening in Economic Development. New York: Oxford UniversityPress, 1973.

Nguena, C.L., Abimbola, T.M., (2013), Financial Deepening Dynamics and Implication for Financial Policy Coordination in a Monetary Union: The Case of WAEMU. Ican Economic Conference 2013 “Regional Integration in Africa” Johannesburg, South Africa; From 28 to 30/10/2013, 1-22.
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Eze Juliet Oluchi . Reg no. 2015/202418. Eco/edu said...

development, because it has an influence over saving decisions and investment (Levine, 2005; Ang, 2008). In consequence, it is relevant to know what determines financial development. It is worth noticing that financial system is a channel through which financial globalization can influence growth and economic development, therefore, that relationship deserves direct theoretical, empirical and analytical attention.
Financial globalization favors risk diversification. This is obvious on a global scale, because domestic economic agents can share risks with foreign agents in domestic and foreign financial markets. This way, in a peak time a country can lend to the foreigner, and in a recession, it can borrow, which helps to mitigate the impacts up and down on the income level, and in consequence, also in consumption and investment. Obstfeld (1994) argues that international risk diversification allows the world economy to move from a portfolio with low risk and low returns to one with higher risk and higher returns. In addition, financial contracts that favor risk diversification will spread in all countries. On the contrary, if agents prefer domestic assets, nontradable goods and international trade has high transaction costs, the incentives to international diversification of risk could decrease. Also, if international financial markets are incomplete, with the risk of a unstable exchange rate and expropriations, there is not any insurance against all future contingencies (Kose, Prasad and Terrones, 2007).

Eze Juliet Oluchi . Reg no. 2015/202418. Eco/eduEze said...

If capitals flow freely around the world, it will favor mobilization and pooling of savings on a global scale. Domestic savings will be able to seek foreign financial markets, looking for better returns, and the domestic financial market will have to improve methods to pool savings, as a result of international competition. Furthermore, it is supposed that external saving does not substitute domestic saving. On the contrary, if financial globalization offers better protection against uncertainty, this may in fact lower the needs to save for the future, which might lead to a better stock market without an increase in savings (Devereux and Smith, 1994, as cited in Naceur Ghazouani and Omran 2008: 677).
Financial globalization reduces international transaction costs and it favors a global relationship between financial and real sector. In others words, globalization facilitates exchanges in the real economy on a global scale.
Chapter two
Linkages And interlinkages between finance and development.
Inter-linkages is a strategic approach to managing sustainable development that seeks to promote greater connectivity between ecosystems and societal actions. On a practical level, this involves a greater level of cohesiveness among institutional, environmental issue-based, and development-focused responses to the challenges of sustainable development, and among the range of international, regional, and national mechanisms that share this challenge. The key to developing a strong integrated approach to development is the identification of the inherent synergies that exist between different aspects of the environment and an exploration of the potential for more effective coordination between development issues and our responses to them. In our global effort to establish and maintain development there is perhaps no more immediate and urgent challenge than that which relates to the question of financing.
This brief provides an outline of the key processes and trends that serve to shape the current financing environment. These include the continuing decrease in official development assistance (ODA) levels and the steady increase of private financial and capital flows into the developing world. Also highlighted, is the urgent need to clearly define and delineate an appropriate role for ODA within the broader development

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challenge.
Another key factor shaping the challenge to provide adequate financing for development is simply the increasing complexity and urgency of the task at hand. There are, for example, an increasing number of private and public actors and stakeholders who are required to play a useful role in governance at all levels of governance, international, regional, national, and local. And while the natural environment is beginning to show even greater signs of stress at all four levels, the gap between the richest and poorest peoples of the world continues to widen. This policy brief provides concrete, practical, examples of how the inter-linkages approach can, or has been, applied to the issue of financing in order to use the above trends to the advantage of development goals.
There are several aspects to this task. First, is to identify new and innovative, public and private, sources of financing at the international, regional, and national levels. Second, is to identify, at the project level, ways in which limited funds can be used to the best advantage. Third, is to examine ways in which the mechanisms that finance sustainable development can be made to be more efficient and effective. Within this brief, each of these aspects is explored in detail and discussed within the specific context provided by selected case studies.
chapter three
government financing and development financing
Government finance is the role of the government in the economy. It is the branch of economics which assesses the government revenue and government expenditure of the public authorities and the adjustment of one or the other to achieve desirable effects and avoid undesirable ones.
The proper role of government provides a starting point for the analysis of public finance. In theory, under certain circumstances, private markets will allocate goods and services among individuals efficiently (in the sense that no waste occurs and that individual tastes are matching with the economy's productive abilities). If private markets were able to provide efficient outcomes and if the distribution of income were socially acceptable, then there would be little or no scope for government. In many cases, however, conditions for private market efficiency are violated. Some of the sources of this finance includes
Tax:
A tax is a compulsory levy imposed by a public authority against which tax payers cannot claim anything. It is not imposed as a penalty for only legal offence. The essence of a tax, as distinguished from other charges by the government, is the absence of a direct quid pro quo (i.e., exchange of favour) between the tax payer and the public authority.
There two type of tax;

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General taxes
To the extent that governments cannot collect adequate revenues via sources of finance discussed above, with the possible exception of earnings from public sector production and the inflation tax, the government must turn to general taxes to finance its activities and the provision of public goods. This is an important point: General taxes are a residual source of finance that should be resorted to only if other sources of finance are socially inadequate for government resource needs. There is one important qualification to this which suggests even further reliance on sources of finance other than general taxes: Since feasible general taxes are inevitably distortionary and have possibly negative consequences on income distribution, distortionary and distribution costs of all sources of finance should be equated at the margin even if this entails over-use of some of the sources of finance discussed above. Indeed, it is the distributional impact of the entire government budget, comprising revenue, subsidies and transfers, and expenditure, that matters rather than the impact of revenue alone. No research appears to exist which examines the extent to which the impact of revenue, taken by itself, on distribution should be taken into account. For example, despite a negative distributional impact it is entirely possible that some (or perhaps much) reliance on the inflation tax is socially desirable.
Despite an enormous amount of research on general taxes, including some outstandingly brilliant and Nobel Prize winning contributions, there is still an inadequate understanding of the socially desirable design of general taxes at different levels of development. For example, "optimal tax theory", which examines the design of least cost taxes when some activities or commodities cannot be taxed and when the government needs to raise a given amount of revenue, yields a prescription for different rates of tax on different commodities. Such differentiated taxes are impossible for the bureaucracy (or tax administration) of any existing country to administer.
Charges and fees are levied for publicly provided commodities (i.e. goods and services) which are not (pure or nearly pure) public goods. It is efficient or a least cost social option for socially desirable commodities to be provided publicly if either the private sector would have underprovided them or if it can provide them only at a greater social resource cost than the government. If this requirement is met then the government should collect charges or fees for commodities it provides from those who benefit from them. However, there should be full recovery of charges and fees from direct beneficiaries only if the good or service in question is a "private good" having, furthermore, no positive or negative spillovers for citizens other than direct beneficiaries. An example of a publicly provided service which has no or minimal spillovers is the provision of adjudication by courts of law in the case of disputes between citizens (or torts). This is not the case for many publicly provided goods like education, curative health services,

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anti-poverty services or agricultural extension services where positive spillover benefits suggest that less than full cost recovery from direct beneficiaries is desirable.
Since governments and private sectors vary in their capacity in different countries, the socially desirable menu of private commodities that government should provide will vary across countries. There is inadequate country specific research to determine what this menu is. Indeed, no generally accepted method exists of determining whether a given good or service should be provided by the government, and if so at what price. Nevertheless, there is a general belief that this source of finance is underutilised by government in that inadequate charges and fees are recovered for goods that governments do provide, despite the existence of positive spillovers.
A quite distinct type of fee is that charged for citizen's use of assets held by the government acting as a custodian of national assets. The latter includes natural resources such as from forests and mines and national treasures such as wildlife parks and historical monuments. In the case of fees for assets held custodially, it is hard for anyone to argue that sale of these treasures (for example the Taj Mahal or Corbett National Park) is socially desirable. In the case, say, of a nation's mineral wealth it is possible to sell assets (e.g. through mining concessions and leases) and, indeed, many countries do so. For assets which the government does not sell, the marginal cost of maintaining these assets should, where relevant, first be provided for. However, in setting charges, a second consideration is the longevity and exhaustibility of these assets. In principle, future generations also have rights to these assets so prices should be set high enough to ensure that the current generation does not overexploit it. While principles for the pricing of exhaustible resources have been extensively studied, they are seldom applied in practice and both royalties and entry fees at heritage sites are generally reckoned to be below what is socially desirable.
Earnings of the government, other than the sort of charges and fees discussed above typically consist of net revenues from the sale of commodities by public sector undertakings.
Consider, first, manufactured outputs of public sector undertakings. In principle, there should be no net gain to the government from public undertakings, and even a loss in case of increasing returns to scale, if the government prices these commodities at their marginal cost, as is socially desirable. To the extent that price exceeds marginal cost, prices charged are akin to a poll tax on citizens, who are, after all, the ultimate owners of these undertakings. The incidence of this poll tax depends on the importance of the commodities in question in the consumption basket of different groups. While there is largely a consensus on pricing of products of public sector undertakings, there is also a general view that public sector

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1.2 Concept of Finance
The term finance comes from the latin word finis which means end or finish .Its implication affect both individuals and businesses ,organisation and states .It has to do with obtaining and using money management .
Therefore and regardless of occupation that we have, it is necessary to know what it is , what it means or just what is the definition of finance because all one way or another we perceive money we spend , and some also invest and take risks .
Simon Andrade , defines finance as area of economic activity in which money is the basis of the various embodiment ,whether stock market investment ,real estate ,industral construction , agricultural development , so on and area of the economy which we study the performance of capital market and supply and price of financial assets .By O.Ferrel C. and Geoffrey Hirt refer to the term finance as all activities related to obtaining money and effective use. Bodie and Merton refer to finance as the study of how scarce resources are allocated overtime . Wikipedia refer finance as a branch of economics that studies the acquisition and management by a company , individual or government ,funds necessary to meet its objective and criteria that has its asset and it is generally refered as the art and science of managing money At this point and taking into account the above proposals, I propose the following definitions of finance . Finance is a branch of economics that studies the acquisition and effective use of money over time by an individual, corporation, organisation or state . From Gaurav Akrani , in general sense :finance is the management of money and other valuables, which can be easily converted to cash .To him according to experts :finance is a simple task of providing the necessary funds (money) required by the business of entities of companies ,firm and others on the terms that there are the most favourable to achieve their economic objectives . To him according to entrepreneurs finance is concerned about cash. To him according to academicians finance is the procurement (to get obtain) of funds and effective (properly defined ) utilization of fund . Finance is concerned with the process institutions, markets and instruments involved in the transfer of money among individuals, business and governments by Gitman “Finance is concerned with a decision about money or more appropriately cash flows.”–Scott and Brigham .Financial management is concerned with acquisition, financing and management of assets with some overall goal in mind,–James C Van Horne.Business finance is concerned with the sources of funds available to enterprises of all sizes and the proper use of money or credit obtained from such sources.”–Professor Gloss and Baker. Business finance is to planning, coordinating, controlling and implementing financial activities of the business institution.”–E.W Walker

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CHAPTER ONE
1.0 DISCUSS THE CONCEPT OF FINANCE DEVELOPMENT USING GLOBAL AND DOMESTIC STYLIZZED FACTS
1.1 Concept of Development
Some scholars such as Williamson, Buttrick, Water Crouse, Viner etc. define economic development as the process that brings about permanent increase in per capita income.Other scholars like Meier, Baldwin etc. define economic development as the process leading to long-lasting increase in national income instead of per capita income. Bernard, Okun and W. Richardson define economic development as sustained improvement in wellbeing, which is reflected by increasing flow of goods and services. Simon Kuznets defines economic development as a long term rise in the capacity to supply increasing diverse economic goods to its population, the growing capacity based on advancing technology and the institutional and ideological adjustment that demands. TAYEBWA (1992:261) states that development is a broad term which should not be limited to mean economic development, economic welfare or material wellbeing as per Tayebwa, development in general includes improvements in economic, social and political aspects of whole society like security, culture, social activities and political institutions.According to TODARO (1981:56) refers to development as a multi-dimensional process involving the reorganization and reorientation of the entire economic and social systems. According to PERROUX (1978:65), defines development as "the combination of mental and social changes among the population which decide to increase its real and global products, cumulatively and in sustainable manner." ROGERS (1990:30) adds "development is a long participatory process of social change in the society whose objective is the material and social progress for the majority of population through a better understanding of their environment" Dudley Seers while elaborating on the meanic vng of development suggests that while there can be value judgements on what is development and what is not, it should be a universally acceptable aim of development to make for conditions that lead to a realisation of the potentials of human personality. Seers outlined several conditions that can make for achievement of this aim: The ncapacity to obtain physical necessities, particularly food; A job (not necessarily paid employment) but including studying, working on a family farm or keeping house; Equality, which should be considered an objective in its own right; Participation in government; Belonging to a nation that is truly independent, both economically and politically; and Adequate educational levels. Development means “improvement in country’s economic and social conditions”. More specially, it refers to improvements in way of managing an area’s natural and human resources. In order to create wealth and improve people’s lives.
Amartya Sen has twice changed our thinking about what we mean by development. His ‘capabilities approach’ led to introduction of the UN Human Development Index, and subsequently the Multidimensional Poverty Index, both of which aim to measure development in this broader sense.Then in 1999 Sen moved the goalposts again with his argument that freedoms constitute not only the means but the ends in development. Sen's view is now widely accepted: development must be judged by its impact on people, not only by changes in their income but more generally in terms of their choices, capabilities and freedoms; and we should be concerned about the distribution of these improvements, not just the simple average for a society. Development also carries a connotation of lasting change. But to define development as an improvement in people”s well being does not do justice to what the term means to most of us. Development consists of more than improvements in the well-being of citizens, even broadly

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CHAPTER TWO
2.0 DO A CRICTICAL ANALYSIS OF THE LINKAGES AND INTER-LINKAGES BETWEEN FINANCE AND DEVELOPMENT
2.1 LINKAGES AND INTER LINKAGES OF FINANCE AND DEVELOPMENT
Finance is nothing but an exchange of available resources. For development to occur goods which commodities such as tomatoes which can be easily produced in an economy which has import duties to encourage tomato production and ensures export promotion to encourage export of tomatoes to earn more foreign currencies to encourage economic growth which in the long run will see to economic development this also pertains to its services such as insurance, transportation For development to occur with these services which insurance , transportation which can be easily produced in an economy which has import duties instead of acquiring insurance services from the external sector if it is possible will lead to underdevelopment to a country economy which discourages economic development from occurring in the future to ensure this does not happen import duties on these services has to be raised and thereby ensuring an increase on export promotion to encourage export of insurance and transportation with the countries resourses which are insurance and transport these services has to be produced by the domestic economy not foreign economy although there may be some form of technology transfer to earn more foreign currencies to encourage economic growth which in the long run will see to economic development
The linkages of development include level of savings and technology advancement and other which will be explained succinctly .Level of savings increases economic development .One question that should be of interest ,people should ask is How does level of savings lead to economic development ? Now this will be explained as elaborately as possible . A decrease in savings of an economy in a country could lead to recession ,possible depression when the economy of a country is in debt crisis that is a reduction in savings is one of the effects of causing debt crisis .Remember we are trying to elaborate on how increase in savings leads to economic development as a linkage but this will be explained further that is (increase in savings) .Remember decrease in savings could cause debt crisis in a depressed economy before we had already digressed a little .Now ,How does decrease in savings leads debt crisis in a depressed economy ? First a depressed economy will be explained then secondly how it causes debt crisis will be explained later on ,immediately after our elaboration on depressed economy .A depressed economy is the lowest of all the economic fluctuations of an economy and assumes a negative rate of economic growth rate which could be in minuses such as -1,-21.-111,-1 billion(this is totally devastating which suggest an economy is no more ) After from a depressed economy will have a recovery economy then a boom economy, Recession comes before depression which Nigeria has severely experienced over its economic history .Then it causes debt crisis ,it does not necessary mean decreased savings rate is the only macroeconomic variables that causes debt crisis others include a fall in value of money(this entails little money chasing over large goods ), over rise in prices , increase in unemployment , increase in inflationary levels .Decrease in savings rate leads to debt crisis when its savings rate cannot back its importation . Remember an decrease in savings rate of an economy leads to decrease in reserves of a country .When an economy does not save it makes the reserve to depreciate .Also decrease in savings rete could also be explained as follows when there is an increase in imports its savings rate depreciate and if import is more than export ,reserves which consist of its savings rate

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from increase in exports depreciates this is as a result of decrease in savings rate which causes the reduction in reserves
Now increase in savings rate as a factor causing the linkages in development .An increase in savings rate encourages an increase in production and an increase in industrial base of an economy. Increase in savings rate leads to a prevention of the vicious circle of poverty in an economy. Increase in savings creates an export based economy preventing an import specialized economy encouraging balance of payment surplus .When an increase in savings ensures a productivity increase and increase in industrial base of an economy leads to an increase in employment. An increase in savings is a favourable linkage in development. An increase in savings can inter link development and finance. Finance is the soul of our economic activities
2.2 HOW DOES INCREASE IN SAVINGS INTER LINK FINANCE AND DEVELOPMENT
An increase in savings increases finance of an economy through more currencies which could be used for investment purposes and interlinks development since there is increase in economic growth ensured by increased savings which increase economic growth in the long run there by ensuring development .
2.3 TECHNOLOGY
An environmental sound technology in an economy leads an increase in production ,increase in savings, reduction in inflationary levels ,money having more values e.t.c

2.4 SOME OF THE RULES OF DEVELOPMENT THAT CAUSES LINKAGE
DO NOT DICHOTOMIZE THE NATIONS OF THE WORLD
Almost all writers have classified the nations of the world (sometimes only the noncommunist world) as either rich or poor, developed or developing, more developed or less developed. This dichotomization is both false and misleading: false because the nations do not fall into two neat camps; misleading because such a division encourages the search for explanations of poverty that, with more or less sophistication, blame it on the rich. In fact, by any measure one cares to use (e.g., income per capita, literacy rate, expectation of life), the nations of the world occupy a continuum, not a dichotomy. The richest and the poorest countries differ starkly, to be sure, but between them lies an enormous variety of intermediate conditions. As one descends from the United States and Sweden through Greece, Mexico, and Turkey, to reach India and Ethiopia, where can a line be drawn to separate rich from poor?
DO NOT ASSUME THAT POORER NATIONS ARE NOT DEVELOPING
Writers who set out to explain "economic stagnation" or "low level equilibrium traps" are addressing themselves to rare circumstances. By any accepted measure (e.g., income per capita, literacy rate, expectation of life), most of the poorer nations are currently developing. Moreover, their rates of development compare favorably with those experienced either historically or currently by the richer countries. This rapid change is not an artifact of social accounting. Close observers of such countries as India, Egypt, and Peru (supposedly slowly developing countries) report sweeping changes in the mode of economic life. In such places as Thailand, Greece, and Mexico the rapid pace of change is even more obvious. To picture the poorer economies as

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tradition-bound, stagnant, and resistant to change is to accept a false description of current reality. Only a few backwaters remain to fit this long-accepted characterization.
DO NOT PROJECT YOUR TASTE AND VALUES ONTO OTHERS
To assume that everyone wants what I want, and will bear the same cost to get it, is certain to mislead. Tastes and values differ enormously among the people of the world. If the poor Indians would only eat their sacred cows, they could avert the threat of starvation—advice that is easy for me to give, but rather difficult to take for people deeply committed to the inviolability of all animal life. A long and laudable list of human values (e.g., loyalty to family members in Latin America, devotion to a contemplative style of life in Asia, adherence to tribal customs and traditions in Africa) has been held up by development enthusiasts as "barriers to progress." How narrow our vision; how insensitive our appreciation of the values of others.



CHAPTER THREE
3.0 DISCUSS GOVERNMENT FINANCING ,ITS SOURCES AND DISCUSS DEVELOPMENT FINANCING OF NIGERIA AND THEIR SOURCES
3.1 GOVERNMENT FINANCING
Government financing is the study of the role of the government in the economy.It is the branch of economics which assesses the government revenue and government expenditure of the public authorities and the adjustment of one or the other to achieve desirable effects and avoid undesirable ones. The purview of government financing is considered to be threefold: governmental effects on (1) efficient allocation of resources,(2) distribution of income,and (3) macroeconomic stabilization
Government can pay for spending by borrowing (for example, with government bonds), although borrowing is a method of distributing tax burdens through time rather than a replacement for taxes. A deficit is the difference between government spending and revenues. The accumulation of deficits over time is the total public debt. Government financing is closely connected to issues of income distribution and social equity. Governments can reallocate income through transfer payments or by designing tax systems that treat high-income and low-income households differently .
3.2 FINANCING OF GOVERNMENT EXPENDITURE
Government expenditures are financed primarily in three ways:
1.0 Government revenue : Taxes andNon-tax revenue (revenue from governmentowned corporations, sovereign wealth funds , sales of assets, or seigniorage).

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2.0 Government borrowing. And 3.0 Money creation.
TAX
Taxation is the central part of modern public finance. The main objective of taxation is raising revenue. A high level of taxation is necessary in a welfare State to fulfill its obligations. Taxation is used as an instrument of attaining certain social objectives i.e. as a means of redistribution of wealth and thereby reducing inequalities. Taxation in a modern Government is thus needed not merely to raise the revenue required to meet its ever-growing expenditure on administration and social services but also to reduce the inequalities of income and wealth. Taxation is also needed to draw away money that would otherwise go into consumption and cause inflation to rise.
Seigniorage
Seigniorage is the net revenue derived from the issuing of currency. It arises from the difference between the face value of a coin or bank note and the cost of producing, distributing and eventually retiring it from circulation. Seigniorage is an important source of revenue for some national banks, although it provides a very small proportion of revenue for advanced industrial countries
3.3 SOURCES OF DEVELOPMENT FINANCING
AGRICULTURE
As of 2010, about 30% of Nigerians are employed in agriculture. Agriculture used to be the principal foreign exchange earner of Nigeria. Major crops include beans, sesame, cashew nuts, cassava, cocoa beans, groundnuts, gum arabic, kolanut, maize (corn), melon, millet, palm kernels, palm oil, plantains, rice, rubber, sorghum, soybeans and yams. Cocoa is the leading non-oil foreign exchange earner. Rubber is the second-largest non-oil foreign exchange earner. Prior to the Nigerian civil war, Nigeria was self-sufficient in food. Agriculture has failed to keep pace with Nigeria's rapid population growth, and Nigeria now relies upon food imports to sustain itself.[113] The Nigerian government promoted the use of inorganic fertilizers in the 1970s.
OIL
Nigeria is the 12th largest producer of petroleum in the world and the 8th largest exporter, and has the 10th largest proven reserves. (The country joined OPEC in 1971). Petroleum plays a large role in the Nigerian economy, accounting for 40% of GDP and 80% of Government earnings. However, agitation for better resource control in the Niger Delta, its main oil producing region, has led to disruptions in oil production and prevents the country from exporting at 100% capacity.The Niger Delta Nembe Creek Oil field was discovered in 1973 and produces from middle Miocene deltaic sandstone-shale in an anticline structural trap at a depth of 2 to 4 kilometres (1.2 to 2.5 miles). In June 2013, Shell announced a strategic review of its operations in Nigeria, hinting that assets could be divested. While many international oil companies have operated there for decades, by 2014 most were making moves to divest their interests, citing a range of issues including oil theft. In August 2014, Shell Oil Company said it was finalising its interests in four Nigerian oil fields.
OVERSEAS REMITTANCES
Next to petrodollars, the second biggest source of foreign exchange earnings for Nigeria are remittances sent home by Nigerians living abroad.In 2014, 17.5 million Nigerians resided in foreign countries, with the UK and the USA having more than 2 million Nigerians each.

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According to the International Organization for Migration, Nigeria witnessed a dramatic increase in remittances sent home from overseas Nigerians, going from USD 2.3 billion in 2004 to 17.9 billion in 2007. The United States accounts for the largest portion of official remittances, followed by the United Kingdom, Italy, Canada, Spain and France. On the African continent, Egypt, Equatorial Guinea, Chad, Libya and South Africa are important source countries of remittance flows to Nigeria, while China is the biggest remittance-sending country in Asia.
MINING
Nigeria also has a wide array of underexploited mineral resources which include natural gas, coal, bauxite, tantalite, gold, tin, iron ore, limestone, niobium, lead and zinc.[121] Despite huge deposits of these natural resources, the mining industry in Nigeria is still in its infancy.
SERVICES
Nigeria has one of the fastest growing telecommunications markets in the world, major emerging market operators (like MTN, 9mobile, Airtel and Globacom) basing their largest and most profitable centres in the country. The government has recently begun expanding this infrastructure to space based communications. Nigeria has a space satellite that is monitored at the Nigerian National Space Research and Development Agency Headquarters in Abuja. Nigeria has a highly developed financial services sector, with a mix of local and international banks, asset management companies, brokerage houses, insurance companies and brokers, private equity funds and investment banks.

CHAPTER FOUR
4.0 FINANCIAL ASPECT OF DEVELOPMENT
4.1 FINANCING DEVELOPMENT AFTER ECONOMIC CRISES
Private capital flows collapsed, leaving the global South with an overall deficit in financing. Greater official financing flows have not yet been able to compensate for the shortfalls and the slow increase in private capital flows since the end of 2009 has not been able to do so either. Overall, according to the UN, more capital flows from the South to the North than vice versa. The South thus continues to finance the North.
Discussions regarding a reform of the global financial and economic order are ongoing but to date have had little impact on developing countries. The international financing institutions do have more funds at their disposal, but developing countries are still under-represented. The IMF and the World Bank have begun to question some of their previous dogmas. Opinions are divided on whether one can already speak of a new policy.
The debate on the role of taxation in the mobilisation of local resources for development financing has intensified. Insight favouring comprehensive reforms of the taxation systems in developing countries has sharpened, but technical aid provided by industrialised countries to realise these reforms is still insufficient. Taxation is acquiring growing recognition as an instrument of State-building, democratisation and governance. The campaign to deal with international tax evasion and illicit capital flows is gaining momentum and the exchange of information on tax issues has improved. However, it is difficult to establish newer and more

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trenchant instruments for improved transparency, given the predominant interests of shady centres of finance.
4.2 FINANCIAL SECTOR DEVELOPMENT AND ITS MEASUREMENT
Financial sector development takes place when financial instruments, markets, and intermediaries work together to reduce the costs of information, enforcement and transactions. A solid and well-functioning financial sector is a powerful engine behind economic growth. It generates local savings, which in turn lead to productive investments in local business. Furthermore, effective banks can channel international streams of private remittances. The financial sector therefore provides the rudiments for income-growth and job creation. There are ample evidence suggesting that financial sector development plays a significant role in economic development. It promotes economic growth through capital accumulation and technological advancement by boosting savings rate, delivering information about investment, optimizing the allocation of capital, mobilizing and pooling savings, and facilitating and encouraging foreign capital inflows. financial development is not simply a result of economic growth; it is also the driver for growth. Financial sector development also assists the growth of small and medium-sized enterprises (SMEs) by giving them with access to finance. Financial sector development has heavy implication on economic development‐‐both when it functions and malfunctions.
ITS MEASUREMENT
Empirical work done so far is usually based on standard quantitative indicators available for a longer time period for a broad range of countries. For instance, ratio of financial institutions’ assets to GDP, ratio of liquid liabilities to GDP, and ratio of deposits to GDP.

4.3 IMPACT OF FINANCIAL SECTOR ON ECONOMIC DEVELOPMENT
Until fairly recently, the role of the financial sector in economic development was either neglected or relegated to a secondary or accommodating position, while primary emphasis was placed on the role of real factors, such as physical and human capital. Savings and investment are the critical component of the economy that increases financing on development. The financial sector was believed to play a primarily passive or permissive role in development; to the extent that the ability to provide financial services is limited, the growth of real output would be hindered or restrained. This limited ability is viewed simply as a reflection of the lack of demand for financial services. From this perspective, the role of the financial sector in the development process may be termed "demand-following". however, increasing evidence suggests that the fi- nancial sector may play a more direct or active role in the development process. The view that the financial sector's expansion is itself growth-inducing began to emerge. Based on this assumption, the role of the financial sector in the development process may be termed "supply-leading”. Empirical evidence of the relationship betwen financial growth and economic development has been mixed. The findings of some recent studies employing time-series data for several developing countries show supply-leading to be an important factor in development.Here a mixture of financial and real growth are a mixture finances and development.

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CHAPTER FIVE
5.0 CRITICALLY DISCUSS THE CONCEPT OF N0N-GOVERNMENTAL ORGANISATION AND THEIR IMPACT ON DEVELOPMENT
5.1 CONCEPT OF NON-GOVERNMENTAL ORGANISATION
Non-governmental organizations, nongovernmental organizations, or nongovernment organizations , commonly referred to as NGOs, are usually non-profit and sometimes international organizations independent of governments and international governmental organizations (though often funded by governments) that are active in humanitarian, educational, health care, public policy, social, human rights, environmental, and other areas to effect changes according to their objectives. NGOs are usually funded by donations, but some avoid formal funding altogether and are run primarily by volunteers. NGOs are highly diverse groups of organizations engaged in a wide range of activities, and take different forms in different parts of the world. Some may have charitable status, while others may be registered for tax exemption based on recognition of social purposes. Others may be fronts for political, religious, or other interests. Since the end of World War II, NGOs have had an increasing role in international development , particularly in the fields of humanitarian assistance and poverty alleviation. The term "non-governmental organization" was first coined in 1945, when the United Nations (UN) was created. The UN, itself an intergovernmental organization, made it possible for certain approved specialized international non-state agencies — i.e., nongovernmental organizations — to be awarded observer status at its assemblies and some of its meetings. Later the term became used more widely. Today, according to the UN, any kind of private organization that is independent from government control can be termed an "NGO", provided it is not-fo-rprofit, non-prevention, but not simply an opposition political party. One characteristic these diverse organizations share is that their non-profit status means they are not hindered by short-term financial objectives. Accordingly, they are able to devote themselves to issues which occur across longer time horizons, such as climate change, malaria prevention, or a global ban on landmines. Public surveys reveal that NGOs often enjoy a high degree of public trust, which can make them a useful - but not always sufficient - proxy for the concerns of society and stakeholders.
5.2 THEIR IMPACT ON DEVELOPMENT
Conventional wisdom asserts that NGOs are particularly good at reaching the poorest: the assertion that they are better at reaching the poorest than govemment and official aid agencies suggests both that they may be better at involving poorer or the poorest groups, and that they may be better at improving their lives. another—and larger—sub-group of the poorest include landless labourers, marginal farmers, those with few durable assets and little to no education, and a high proportion of households headed by women. Almost by definition the poorest tend to be scattered, disorganised, and livmg in resource-poor areas, or are heavily dependent on these groups for employment and credit requirements. When NGOs attempt to design projects exclusively for tiiese people they form functional groups to encourage their participation. it is no easy task to devise programmes aimed at raising the incomes of individuals without land or other assets: unskilled woikers with little capital tend to produce products that sophisticated consumers do not want to buy, while the poorest have no money to buy such goods. Aided by advances in information and communications technology, NGOs have helped to focus attention on the social and environmental externalities of business activity. Multinational brands have been acutely

AGU UGOCHUKWU 2015/198881 ECONOMICS said...

susceptible to pressure from activists and from NGOs eager to challenge a company's labour, environmental or human rights record. Even those businesses that do not specialize in highly visible branded goods are feeling the pressure, as campaigners develop techniques to target downstream customers and shareholders. A key development has been the erosion of the apparent North–South divide among development NGOs, with NGOs that originated in donor countries reforming their structures to give a greater voice to their affiliates in recipient countries, and organisations that originated in developing countries forming affiliates in developed countries. The reorientation of NGO advocacy from states toward intergovernmental and corporate actors is also explored, as is the creation of new forms of partnerships with both governmental and private actors. The chapter addresses how development NGOs have attempted to respond to critiques of their accountability and legitimacy through reforms such as the International NGO Charter on Accountability, while the conclusion explores the limitations of the transformations of development NGOs, and the challenges that these new configurations pose. It is now estimated that over 15 percent of total overseas development aid is channelled through NGOs (World Bank) Total NGO numbers are hard to pin down for good reason; • Current estimates put the number of NGOs around; • 6,000 and 30,000 national NGOs in developing countries • 29,000 approximate international NGOs • Community based organizations across the developing and developed world that number in the hundreds of thousands (World Bank, Economist). • Over the past several decades, NGOs have become major players in the field of international development • Since the mid-1970s, the NGO sector in both developed and developing countries has experienced exponential growth • According to the World Bank, from 1970 to 1985 total development aid disbursed by international NGOs increased ten-fold • This trend peaked in 1992 with $7.6 billion dollars being distributed by NGOs to developing countries. Until the late 1970s, NGOs were little-recognised in the implementation of development projects or in policy influence. Those few existing were perceived as bit players in service provision, short-term relief, and emergency work. A remarkable change in their scale and significance was triggered in the late 1970s, when NGOs became the new sweethearts of the development sector. The ideological ascendency of neoliberalism at this time was accompanied by the rise of structural adjustment in aid policies, reductions in public expenditure, and the withdrawal of state-provided services. Within this radical reform, the market replaced the state at the centre of development strategies, and poverty lost its position as an explicit concern, given beliefs in the trickle-down effects of economic growth (Murray and Overton 2011). Continued donor distrust and frustrations with states generated and fuelled interest in NGOs as desirable alternatives, viewing them favourably for their representation of beneficiaries and their role as innovators of new technologies and ways of working with the poor. Two distinct roles for NGOs are highlighted, both as service providers and advocates for the poor.

Anonymous said...

CHAPTER ONE
DISCUSSING THE CONCEPT OF FINANCE AND DEVELOPMENT USING GLOBAL AND DOMESTIC STYLIZED FACT
FINANCE:
Finance is the process of raising funds or capital for any kind of expenditure. Consumers, business firms, and governments often do not have the funds available to make expenditures, pay their debts, or complete other transactions and must borrow or sell equity to obtain the money they need to conduct their operations. Savers and investors, on the other hand, accumulate funds which could earn interest or dividends if put to productive use. These savings may accumulate in the form of savings deposits, savings and loan shares, or pension and insurance claims; when loaned out at interest or invested in equity shares, they provide a source of investment funds. Finance is the process of channeling these funds in the form of credit, loans, or invested capital to those economic entities that most need them or can put them to the most productive use. The institutions that channel funds from savers to users are called financial intermediaries. They include commercial banks, savings banks, savings and loan associations, and such nonbank institutions as credit unions, insurance companies, pension funds, investment companies, and finance companies.
Three broad areas in finance have developed specialized institutions, procedures, standards, and goals: business finance, personal finance, and public finance. In developed nations, an elaborate structure of financial markets and institutions exists to serve the needs of these areas jointly and separately.
Business finance is a form of applied economics that uses the quantitative data provided by accounting, the tools of statistics, and economic theory in an effort to optimize the goals of a corporation or other business entity. The basic financial decisions involved include an estimate of future asset requirements and the optimum combination of funds needed to obtain those assets. Business financing makes use of short-term credit in the form of trade credit, bank loans, and commercial paper. Long-term funds are obtained by the sale of securities (stocks and bonds) to a variety of financial institutions and individuals through the operations of national and international capital markets.
Personal finance deals primarily with family budgets, the investment of personal savings, and the use of consumer credit. Individuals typically obtain mortgages from commercial banks and savings and loan associations to purchase their homes, while financing for the purchase of consumer durable goods (automobiles, appliances) can be obtained from banks and finance companies. Charge accounts and credit cards are other important means by which banks and businesses extend short-term credit to consumers. If individuals need to consolidate their debts or borrow cash in an emergency, small cash loans can be obtained at banks, credit unions, or finance companies.

Opara stephine chinwendu. 2015/199290education economics said...

OTHER FINANCIAL ASPECT OF DEVELOPMENT
Government
1. Agricultural Credit Guarantee Scheme (ACGSF)
2. Commodity Surveillance
3. Microfinance
4. SME Finance
5. Small and Medium Enterprises Equity Investment Scheme (SMEEIS)
6. Refinancing and Rediscounting Scheme (RRF)



CHAPTER 2
Development Financing
Development financing is one of the requirements for sustainable economic growth in any economy. The supply of finance to various sectors of the economy will promote the growth of the economy in a holistic manner and this, will make development, welfare improvement to proceed at a faster rate.
The Central Bank of Nigeria development finance initiatives involve the formulation and implementation of various policies, innovation of appropriate products and creation of enabling environment for financial institutions to deliver services in an effective, efficient and sustainable manner. The initiatives are mainly targeted at agricultural sector, rural development and micro, small and medium enterprises.

SOURCES OF DEVELOPMENT FINANCING
Long-Term Sources of Finance
Long-term financing means capital requirements for a period of more than 5 years to 10, 15, and 20 years or maybe more depending on other factors. Capital expenditures in fixed assets like plant and machinery, land and building etc. of a business are funded using long-term sources of finance. Part of working capital which permanently stays with the business is also financed with long-term sources of funds. Long-term financing sources can be in form of any of them:
Share Capital or Equity Shares
Preference Capital or Preference Shares
Retained Earnings or Internal Accruals
Debenture / Bonds
Term Loans from Financial Institutes, Government, and Commercial Banks
Venture Funding
Asset Securitization
International Financing by way of Euro Issue, Foreign Currency Loans, ADR, GDR etc.

Medium Term Sources of Finance
Medium term financing means financing for a period of 3 to 5 years and is used generally for two reasons. One, when long-term capital is not available for the time being and second when deferred revenue expenditures like advertisements are made which are to be written off over a period of 3 to 5 years. Medium term financing sources can in the form of one of them:
Preference Capital or Preference Shares
Debenture / Bonds
Medium Term Loans from
Financial Institutes
Government, and
Commercial Banks
Lease Finance
Hire Purchase Finance

Opara stephine chinwendu. 2015/199290education economics said...

Short Term Sources of Finance
Short term financing means financing for a period of less than 1 year. The need for short-term finance arises to finance the current assets of a business like an inventory of raw material and finished goods, debtors, minimum cash and bank balance etc. Short-term financing is also named as working capital financing. Short term finances are available in the form of:
Trade Credit
Short Term Loans like Working Capital Loans from Commercial Banks
Fixed Deposits for a period of 1 year or less
Advances received from customers
Creditors
Payables
Factoring Services
Bill Discounting etc.
3B GOVERNMENT FINANCING:
Public finance is the study of the role of the government in the economy. It is the branch of economics which assesses the government revenue and government expenditure of the public authorities and the adjustment of one or the other to achieve desirable effects and avoid undesirable ones.
The purview of public finance is considered to be threefold: governmental effects on (1) efficient allocation of resources
(2) Distribution of income, and
(3) Macroeconomic stabilization.
The proper role of government provides a starting point for the analysis of public finance. In theory, under certain circumstances, private markets will allocate goods and services among individuals efficiently (in the sense that no waste occurs and that individual tastes are matching with the economy's productive abilities). If private markets were able to provide efficient outcomes and if the distribution of income were socially acceptable, then there would be little or no scope for government. In many cases, however, conditions for private market efficiency are violated. For example, if many people can enjoy the same good at the same time (non-rival, non-excludable consumption), then private markets may supply too little of that good. National defence is one example of non-rival consumption, or of a public good.

SOURCES OF GOVERNMENT FINANCING
Government financing comes through the following means
Tax
Taxation is the central part of modern public finance. Its significance arises not only from the fact that it is by far the most important of all revenues but also because of the gravity of the problems created by the present day tax burden. The main objective of taxation is raising revenue. A high level of taxation is necessary in a welfare State to fulfil its obligations. Taxation is used as an instrument of attaining certain social objectives i.e. as a means of redistribution of wealth and thereby reducing inequalities. Taxation in a modern Government is thus needed not merely to raise the revenue required to meet its ever-growing expenditure on administration and social services but also to reduce the inequalities of income and wealth. Taxation is also needed to draw away money that would otherwise go into consumption and cause inflation to rise.A tax is a financial charge or other levy imposed on an individual or a legal entity by a state or a functional equivalent of a state (for example, tribes, secessionist movements or revolutionary movements).

Opara stephine chinwendu. 2015/199290education economics said...

Taxes could also be imposed by a subnational entity. Taxes consist of direct tax or indirect tax, and may be paid in money or as labour. A tax may be defined as a "pecuniary burden laid upon individuals or property to support the government a payment exacted by legislative authority." A tax "is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority" and is "any contribution imposed by government whether under the name of toll, tribute, gable, impost, duty, custom, excise, subsidy, aid, supply, or other name.
There are various types of taxes, broadly divided into two heads – direct (which is proportional) and indirect tax (which is differential in nature):
Stamp duty, levied on documents
Excise tax (tax levied on production for sale, or sale, of a certain good)
Sales tax (tax on business transactions, especially the sale of goods and services)
Value added tax (VAT) is a type of sales tax
Services taxes on specific services
Road tax; Vehicle excise duty (UK), Registration Fee (USA), Regco (Australia), Vehicle Licensing Fee (Brazil) etc.
Gift tax
Duties (taxes on importation, levied at customs)
Corporate income tax on corporations (incorporated entities)
Wealth tax
Personal income tax (may be levied on individuals, families such as the Hindu joint family in India, unincorporated associations, etc.)

Seignorage and Debt
These are actually very different sources of finance. Seignorage is the purchasing power transferred to the government by the private sector when and if it provides money which serves as a medium of exchange for the economy. In fact, in most modern economies the government is the monopoly provider of "high powered money". To the extent that the purchasing power transferred is equal to the social marginal cost of providing money, this is an economically efficient means of raising revenue. However, in this case the government would have no purchasing power left over to finance other government activity. In fact in the presence of increasing returns, the government would need to finance money creation from other sources. To the extent that seignorage reflects monopoly rents earned by the government, it is similar to a poll tax as in the case of rents captured by public sector enterprises. The incidence of this "tax" on different social groups is difficult to discern but depends on their direct and indirect demand for money.

Opara stephine chinwendu. 2015/199290education economics said...

The term seignorage often includes a related source of revenue, commonly known as the "inflation tax", which arise when an increase in the price level lowers the real value of the government's debt to the public. Since the value of non-financial assets is largely unaffected by inflation, the incidence of this tax is on the holders of unindexed financial assets (including government bonds) and also on wage earners to the extent that wages are not indexed for inflation. So the inflation tax is commonly believed to be a regressive tax putting a disproportionate burden on the poor whose main source of income is wages. Concomitant effects on labour and capital allocation decisions of individuals and firms suggest that the inflation tax also has efficiency costs apart from distribution costs. The inflation tax may reflect government moral hazard wherein it uses a source of finance more than is socially desirable, simply because it has the power to do so.
Research suggests that, in contrast to charges and fees, this source of finance is over utilised by most governments.
The debt of the government, excluding debt from money creation, represents the accumulation of borrowings made by the government. Debt finance has a role when government spending finances the creation of long lived assets. To the extent that these assets benefit future generations of citizens, the benefits principle of taxation suggests that the debt should be paid for out of taxes extracted from members of generations who benefit from the assets. However, this is a risky source of finance. As with seignorage, government moral hazard may lead it to exploit its debt raising power more than it should, for example to finance current expenditure not resulting in asset creation. Furthermore debt finance has an impact on the behaviour of private citizens and possibly on their resource allocation decisions, that may add to the cost of debt finance. For example, the Ricardian Equivalence principle suggests that current debt holders in the private sector consider debt to be the same as taxes to the extent that they care about their descendents and the tax burden that the descendents will have to bear. However, Ricardian Equivalence, in its pure form, which asserts that debt and taxes have identical behavioural impacts, does not have much empirical support.
A type of debt that has a more limited justification socially is external debt, wherein the government borrows from citizens of other countries. While such debt can in principle also be used to redistribute the burden of financing government across generations, external debt is seldom as long dated as internal debt. Short term external debt, like short term internal debt, is possibly only justified to smooth finances in the presence of temporary illiquidity of the government.

Opara stephine chinwendu. 2015/199290education economics said...

xes are taxes the government should levy on privately provided or privately consumed commodities when there are negative externalities or spill overs which lead to the private cost of provision or consumption being below the social cost. Since the government gets revenue from such taxes while, at the same time bringing private costs of provision or consumption in line with social costs by "making the polluter pay", such taxes have a double benefit. The importance of this phenomenon, known as the "double dividend hypothesis", is the subject matter of much ongoing research. It is generally believed that this source of revenue is underexploited by most governments. Some countries, such as Singapore, which do rely heavily on corrective taxes are able to raise as much as five percent of GDP from these sources. Besides environmental taxes and regulatory taxes linked to externalities, a related type of taxes to which Pigouvian principles apply are taxes on demerit goods or "sin taxes". Excises on liquor and tobacco are examples.
Since, by breaking laws citizen's reveal that their private cost of doing so is below the cost to society, fines for breaking the law are a form of Pigouvian tax. However, the amount of the tax in the case of fines is the ex-ante, expected value of the fine, in the event that the law breaker is caught and penalised. In designing fines, pure externality considerations must be tempered by taking into account the deterrent and (negative) incentive effect of fines on behaviour and also the principle of natural justice which asserts that "the penalty should not exceed the crime". This is the subject of much ongoing research. There has not been much assessment of whether fines are over or underused by the government, though inadequate enforcement of laws in many developing countries makes it likely that ex ante fines do not sufficiently penalise offenders.

Opara stephine chinwendu. 2015/199290education economics said...


Multi-level Government
The discussion above has neglected an important factor which raises additional issues in the design of revenue raising systems. That is multiple levels of government, nationally and internationally, with differing responsibilities for provision of goods and services. In principle, revenues should be raised by the level of government that is able to do so at least cost and then shared to permit each level of government to finance its expenditures, subsidies and transfer payments. However, problems arise in implementing this prescription, especially in the presence of differing views about the role of government and moral hazard when one level of government collects taxes on behalf of another. For example, while a unified world tax system probably has the least social cost, countries may not agree as to what the appropriate scope of government activity is. Even if they did, it may not be possible to design a revenue sharing system which all countries would find acceptable and reliable. Similar problems arise between levels of government within a country. Consequently, ensuring that most governments have their own revenue raising powers and sources is a problem that needs to be addressed both in theory and in practice.

CHAPTER 4
CONCEPT OF NON GOVERNMENTAL ORGANIZATION (NGO)
The term NGO has no definite /unique definition but we will be looking at its definition from different perspective:
.
World Bank definition of an NGO:
The diversity of NGOs strains any simple definition. They include many groups and institutions that are entirely or largely independent of government and that have primarily humanitarian or cooperative rather than commercial objectives. They are private agencies in industrial countries that support international development; indigenous groups organized regionally or nationally; and member-groups in villages. NGOs include charitable and religious associations that mobilize private funds for development, distribute food and family planning services and promote community organization. They also include independent cooperatives, community associations, water-user societies, women, groups and pastoral associations. Citizen Groups that raise awareness and influence policy are also NGOs·
A non-profit making, voluntary, service-oriented/development oriented organization, either for the benefit of members (a grassroots organization) or of other members of the population (an agency).
It is an organization of private individuals who believe in certain basic social principles and who structure their activities to bring about development to communities that they are servicing.
Social development organization assisting in empowerment of people.
An organization or group of people working independent of any external control with specific objectives and aims to fulfil tasks that are oriented to bring about desirable change in a given community or area or situation.
An organization not affiliated to political parties, generally engaged in working for aid, development and welfare of the community.
Organization committed to the root causes of the problems trying to better the quality of life especially for the poor, the oppressed, the marginalized in urban and rural areas
Organizations established by and for the community without or with little intervention from the government; they are not only a charity organization, but work on socio-economic-cultural activities.
An organization that is flexible and democratic in its organization and attempts to serve the people without profit for itself

Opara stephine chinwendu. 2015/199290education economics said...

TYPES OF NGO
(a)NGO by orientation:
Charitable Orientation often involves a top-down paternalistic effort with little participation by the "beneficiaries". It includes NGOs with activities directed toward meeting the needs of the poor -distribution of food, clothing or medicine; provision of housing, transport, schools etc. Such NGOs may also undertake relief activities during a natural or man-made disaster.
Service Orientation includes NGOs with activities such as the provision of health, family planning or education services in which the program is designed by the NGO and people are expected to participate in its implementation and in receiving the service.
Participatory Orientation is characterized by self-help projects where local people are involved particularly in the implementation of a project by contributing cash, tools, land, materials, labour etc. In the classical community development project, participation begins with the need definition and continues into the planning and implementation stages. Cooperatives often have a participatory orientation.
Empowering Orientation is where the aim is to help poor people develop a clearer understanding of the social, political and economic factors affecting their lives, and to strengthen their awareness of their own potential power to control their lives. Sometimes, these groups develop spontaneously around a problem or an issue, at other times outside workers from NGOs play a facilitating role in their development. In any case, there is maximum involvement of the people with NGOs acting as facilitators.
(b) NGO Types by level of operation:
Community-based Organizations (CBOs) arise out of peoples own initiatives. These can include sports clubs, women organizations, and neighbourhood organizations, religious or educational organizations. There are a large variety of these, some supported by NGOs, national or international NGOs, or bilateral or international agencies, and others independent of outside help. Some are devoted to rising the consciousness of the urban poor or helping them to understand their rights in gaining access to needed services while others are involved in providing such services.
Citywide Organizations include organizations such as chambers of commerce and industry, coalitions of business, ethnic or educational groups and associations of community organizations. Some exist for other purposes, and become involved in helping the poor as one of many activities, while others are created for the specific purpose of helping the poor.
National NGOs include organizations such as the Red Cross, professional organizations etc. Some of these have state and city branches and assist local NGOs.
International NGOs range from secular agencies such as Redda BArna and Save the Children organizations, OXFAM, CARE, Ford and Rockefeller Foundations to religiously motivated groups. Their activities vary from mainly funding local NGOs, institutions and projects, to implementing the projects themselves.
IMPACT OF NGO ON DEVELOPMENT
1. Development and Operation of Infrastructure: Community-based organizations and cooperatives can acquire, subdivide and develop land, construct housing, provide infrastructure and operate and maintain infrastructure such as wells or public toilets and solid waste collection services. They can also develop building material supply centres and other community-based economic enterprises. In many cases, they will need technical assistance or advice from governmental agencies or higher-level NGOs.
2. Supporting Innovation, Demonstration and Pilot Projects: NGO have the advantage of selecting particular places for innovative projects and specify in advance the length of time which they will be supporting the project - overcoming some of the shortcomings that governments face in this respect. NGOs can also be pilots for larger government projects by virtue of their ability to act more quickly than the government bureaucracy.

Opara stephine chinwendu. 2015/199290education economics said...

3. Facilitating Communication: NGOs use interpersonal methods of communication, and study the right entry points whereby they gain the trust of the community they seek to benefit. They would also have a good idea of the feasibility of the projects they take up. The significance of this role to the government is that NGOs can communicate to the policy-making levels of government, information about the lives, capabilities, attitudes and cultural characteristics of people at the local level. NGOs can facilitate communication upward from people to the government and downward from the government to the people. Communication upward involves informing government about what local people are thinking, doing and feeling while communication downward involves informing local people about what the government is planning and doing. NGOs are also in a unique position to share information horizontally, networking between other organizations doing similar work.
4. Technical Assistance and Training: Training institutions and NGOs can develop a technical assistance and training capacity and use this to assist both CBOs and governments.
Research, Monitoring and Evaluation: Innovative activities need to be carefully documented and shared - effective participatory monitoring would permit the sharing of results with the people themselves as well as with the project staff.
Advocacy for and with the Poor: In some cases, NGOs become spokespersons or ombudsmen for the poor and attempt to influence government policies and programs on their behalf. This may be done through a variety of means ranging from demonstration and pilot projects to participation in public forums and the formulation of government policy and plans, to publicizing research results and case studies of the poor. Thus NGOs play roles from advocates for the poor to implementers of government programs; from agitators and critics to partners and advisors; from sponsors of pilot projects to mediators.


REFRENCES
. Role of Nongovernmental Organizations in Development Cooperation Research Paper, UNDP/Yale Collaborative Programme, 1999 Research Clinic, New Haven 1999: . Olena P. Maslyukivska
NGO Funding & Policy: INTERAC-NGO Research Programme, 2001
Aid, NGO and Civil Society: Eldis, 2003
http://efinance management .com/sources of finance
http://www.cddev.org/blog/what.dev
http://www.jstor.org/stable/pdf/1811632

NGWU CHIDIMMA SUCCESS, REG NO:2015/202674,DEPARTMENT:ECONOMICS said...

CHAPTER ONE
DISCUSSING THE CONCEPT OF FINANCE AND DEVELOPMENT USING GLOBAL AND DOMESTIC STYLIZED FACT
FINANCE:
Finance is the process of raising funds or capital for any kind of expenditure. Consumers, business firms, and governments often do not have the funds available to make expenditures, pay their debts, or complete other transactions and must borrow or sell equity to obtain the money they need to conduct their operations. Savers and investors, on the other hand, accumulate funds which could earn interest or dividends if put to productive use. These savings may accumulate in the form of savings deposits, savings and loan shares, or pension and insurance claims; when loaned out at interest or invested in equity shares, they provide a source of investment funds. Finance is the process of channeling these funds in the form of credit, loans, or invested capital to those economic entities that most need them or can put them to the most productive use. The institutions that channel funds from savers to users are called financial intermediaries. They include commercial banks, savings banks, savings and loan associations, and such nonbank institutions as credit unions, insurance companies, pension funds, investment companies, and finance companies.
Three broad areas in finance have developed specialized institutions, procedures, standards, and goals: business finance, personal finance, and public finance. In developed nations, an elaborate structure of financial markets and institutions exists to serve the needs of these areas jointly and separately.
Business finance is a form of applied economics that uses the quantitative data provided by accounting, the tools of statistics, and economic theory in an effort to optimize the goals of a corporation or other business entity. The basic financial decisions involved include an estimate of future asset requirements and the optimum combination of funds needed to obtain those assets. Business financing makes use of short-term credit in the form of trade credit, bank loans, and commercial paper. Long-term funds are obtained by the sale of securities (stocks and bonds) to a variety of financial institutions and individuals through the operations of national and international capital markets.

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