This briefing is based on a literature review conducted as part of a
research project funded by DFID. It reviews the range of policy
responses to the global financial crisis. It sets out some useful
frameworks and concepts to deepen our understanding of the issues, and
to inform more effective assistance for countries affected by similar
external shocks in the future.
The key points are:
- The effects of the global financial crisis vary between countries,
depending on the structure of their economies, historical legacies and
government policy responses
- The governance and institutional set up of a country is likely to
influence its ability to respond effectively to economic shocks
- Understanding how politics and state capacity shape the response to
shocks should inform donor support to affected countries
Foresti, M.; Massa, I.; Wild, L.; Harris, D. Responding to external economic shocks: why state capacity and political incentives matter. ODI Project Briefings (2010) No. 54, 4 pp.
Responding to external economic shocks: why state capacity and political incentives matter. Project Briefing No. 54