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“Innovative financing affects the smooth running of the market and influences its growth.” FALSE

Often drawing on public-private partnerships, innovative financing is based on an awareness of a shared interest to finance development. Economic stakeholders (companies, consumers) who benefit the most from globalization can be interested in making a small contribution to help meet global needs (treating pandemics, tackling climate change, etc.). The funds will end up furthering economic stability and global prosperity. Moreover, it could be economically sound to financially address today’s needs (global public goods) whose cost for the global economy will be much higher if we wait to address them in the future. Lastly, when financing is provided through taxes, they can be designed to be as less distortive as possible from a micro-economic point of view (broad base, low rate, progressive revenue-based structure, possible exemptions).

3 June 2010

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