This paper touches upon three distinct yet interrelated areas, namely: (1) External borrowing and the development process; (2) Current developments in international finance and implications for Nigeria; and (3) Multilateral sources of funding and the role of the major International Financial Organisations: the example of the World Bank. Each of these areas will be treated one by one below.
The process of indebtedness is supposed to be undertaken primarily in favour of development of the borrowing country. So what exactly is development? I shall not try to compare various theoretical definition and at the same time emphasize two major aspects of the development process.
Database Management Systems (DBMSs) are complex, mission-critical software systems. Today’s DBMSs embody decades of academic and industrial research and intense corporate software development. Database systems were among the earliest widely deployed online server systems and, as such, have pioneered design solutions spanning not only data management, but also applications, operating systems, and net worked services. The early DBMSs are among the most influential soft ware systems in computer science, and the ideas and implementation issues pioneered for DBMSs are widely copied and reinvented.
For a number of reasons, the lessons of database systems architecture are not as broadly known as they should be. First, the applied database systems community is fairly small. Since market forces only support a few competitors at the high end, only a handful of successful DBMS implementations exist. The community of people involved in designing and implementing database systems is tight: many attended the same schools, worked on the same influential research projects, and collaborated on the same commercial products. Second, academic treatment of database systems often ignores architectural issues. Textbook presentations of database systems traditionally focus on algorithmic and theoretical issues — which are natural to teach, study, and test without a holistic discussion of system architecture in full implementations. In sum, much conventional wisdom about how to build database systems is available, but little of it has been written down or communicated broadly.
Financing constraints are an important research subject in the economic literature, which attempts to explain why firms do not undertake profit maximizing investment, i.e. why they do not expand their capital stock if return to capital is above the market interest rate (Hubbard, 1998). Credit constraints now figure prominently in macroeconomic analysis, and there is strong evidence from cross country regressions that underdeveloped financial systems are associated with poor investment and growth. The microeconomic evidence, especially from the developing country data, remains limited. Establishing evidence of credit constraints from microeconomic data is difficult, because measuring the return to capital is complicated by unobserved factors such as entrepreneurial ability and demand shocks, which are likely to be correlated with capital stock.
This paper identifies a natural experiment based on a firms decision to invest in a private electric generator. Reinikka and Svensson (2002) demonstrated that firms tend to invest in own electric power generators in countries with unreliable public power supply. Supply shocks to public power supplies are generally uncorrelated with an individual firms market conditions and entrepreneurial ability. This study exploits these exogenous public power supply shocks to identify the effect of financing constraints on firms investment.
