Grant Announcement: FDL & Rockefeller Foundation Join Forces

Published on : 28.02.24

By: Mai-Linh Florentin, 

FDL and Rockefeller Foundation Join Forces to Build a Fairer, More Equitable Global Debt Architecture


Bank Phrom via Unsplash
Bank Phrom via Unsplash

Paris, 28th February 2024

The Finance for Development Lab is pleased to announce the receipt of a significant grant from The Rockefeller Foundation, underscoring the commitment of both organisations to address the need for significant reform in the international financial architecture through cutting-edge economic research and innovative policy proposals.

This collaboration with The Rockefeller Foundation was initiated by FDL’s former Chair and founder, the late Daniel Cohen, who was one of the most esteemed macroeconomists of his generation and a leading figure on sovereign debt. The programme is a tribute to his legacy of fighting extreme poverty and advancing economic progress in the developing world.  It will enable FDL to expand its impact and address pressing economic challenges, working towards creating a more equitable financial architecture that prioritises the borrower's perspective.

Empowering Innovation in Economic Research

Eric Pelofsky, Vice President, Global Economic Recovery, Innovative Finance, The Rockefeller Foundation,  expressed enthusiasm about the collaboration, stating: “The Rockefeller Foundation is proud to continue our collaboration with the Finance for Development Lab and we honor the towering work and leadership of its founder, Daniel Cohen.”

“Their important research will contribute to making debt instruments more balanced and inform the International Monetary Fund’s review of its Debt Sustainability Framework, which we hope will lead to better outcomes and brighter futures for developing countries. This work aligns with and will contribute significantly to our work to support the Bridgetown Initiative and the V20 Agenda.”

FDL’s Research Director, Ishac Diwan, expressed appreciation: “This generous grant from The Rockefeller Foundation is a testament to their commitment to advancing economic research, focusing on data,  and finding practical solutions to global challenges. With this support, we look forward to making significant strides in revising the global debt architecture and creating innovative financial tools that can adapt to the evolving dynamics of the global economy, providing more effective and sustainable solutions for countries facing debt-related challenges.”

In today’s challenging international context of repeated shocks, translating into rising debt and expensive finance, the absence of clear systems and frameworks regarding sovereign debt restructuring is causing unnecessary distress and suffering in developing countries and impeding progress on vital social, economic, and environmental challenges.

Pioneering New Debt Instruments

Spanning over two years, the programme will aim to provide a public access database of Debt Sustainability Analyses for researchers and a template for contingent contracts. It will focus on two key pillars. Firstly, it will aim to shape the urgent reform of the Debt Sustainability Framework for Low Income Country, a key tool to allocate financing to developing countries and determine debt relief. Secondly, it will explore ways to make debt instruments more balanced, including the option to create simple debt instruments that can provide debt service relief in hard economic times and pay creditors in more prosperous times.

This research is of utmost importance and will contribute to advancing the global agenda on international development finance, providing valuable insights for key upcoming meetings such as the IMF's review of the Debt Sustainability Framework, the reform of Multilateral Development Banks (MDBs) under the Capital Adequacy Frameworks (CAF) report, and the broader Bridgetown Initiative. These are critical issues and the stakes are high. The success of these reforms will not only determine the socio-economic future of indebted developing countries but also their ability to finance the $1-2 trillion required for the climate transition.