Right-financing
Encyclopedia
The concept of right-financing was coined by English political economist Dr. Peter Middlebrook
to highlight the importance of adopting the appropriate policy
, institutional and financial support mechanisms to maximize sustainable returns on both public and private investments over time. The term goes beyond the public sector
restructuring concept
of right-sizing in that it looks to assess the policy mandate and size of an institutional entity, its functions and their discharge, as well as the staffing structure and establishment with regard meeting investment and development objectives. Whilst originally applied to the security sector, its application as a conceptual framework brings governance, public and private investment finance principles to work towards an optimal financing framework for a given investment.
While originally used to refer to the fiscal vulnerabilities faced by fragile and post conflict states in establishing sustainable national security
systems, the concept of right-financing is premised on the importance of adopting sound public finance
management and public and private investment principles in support of overall economic effectiveness, efficiency and fiscal sustainability. Right-financing is therefore essentially about determining an acceptable supply of financing for government and private sector entities as they look to deliver higher-quality and more equitable services over time. Establishing the right policy, institutional, financing, debt
and loan
, revenue
, fiscal
, monetary and security
decisions early on in the investment phase is therefore essential to establishing an effective economic growth
policy, institutional and risk management
framework.
of change and its implication for the investment climate; the processes of production, the acts of buying and selling, and their relationships to law
, markets, customs and government.
For more on right-financing follow the external links to the OECD and World Bank.
Peter Middlebrook
Dr. Peter J. Middlebrook is the Managing Director of Geopolicity Inc., and an English political economist/Political Scientist and Emerging Markets expert specializing in fragile states, international relations and the development of Transition economies...
to highlight the importance of adopting the appropriate policy
Policy
A policy is typically described as a principle or rule to guide decisions and achieve rational outcome. The term is not normally used to denote what is actually done, this is normally referred to as either procedure or protocol...
, institutional and financial support mechanisms to maximize sustainable returns on both public and private investments over time. The term goes beyond the public sector
Public sector
The public sector, sometimes referred to as the state sector, is a part of the state that deals with either the production, delivery and allocation of goods and services by and for the government or its citizens, whether national, regional or local/municipal.Examples of public sector activity range...
restructuring concept
Concept
The word concept is used in ordinary language as well as in almost all academic disciplines. Particularly in philosophy, psychology and cognitive sciences the term is much used and much discussed. WordNet defines concept: "conception, construct ". However, the meaning of the term concept is much...
of right-sizing in that it looks to assess the policy mandate and size of an institutional entity, its functions and their discharge, as well as the staffing structure and establishment with regard meeting investment and development objectives. Whilst originally applied to the security sector, its application as a conceptual framework brings governance, public and private investment finance principles to work towards an optimal financing framework for a given investment.
While originally used to refer to the fiscal vulnerabilities faced by fragile and post conflict states in establishing sustainable national security
Security
Security is the degree of protection against danger, damage, loss, and crime. Security as a form of protection are structures and processes that provide or improve security as a condition. The Institute for Security and Open Methodologies in the OSSTMM 3 defines security as "a form of protection...
systems, the concept of right-financing is premised on the importance of adopting sound public finance
Public finance
Public finance is the revenue and expenditure of public authoritiesThe purview of public finance is considered to be threefold: governmental effects on efficient allocation of resources, distribution of income, and macroeconomic stabilization.-Overview:The proper role of government provides a...
management and public and private investment principles in support of overall economic effectiveness, efficiency and fiscal sustainability. Right-financing is therefore essentially about determining an acceptable supply of financing for government and private sector entities as they look to deliver higher-quality and more equitable services over time. Establishing the right policy, institutional, financing, debt
Debt
A debt is an obligation owed by one party to a second party, the creditor; usually this refers to assets granted by the creditor to the debtor, but the term can also be used metaphorically to cover moral obligations and other interactions not based on economic value.A debt is created when a...
and loan
Loan
A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower....
, revenue
Revenue
In business, revenue is income that a company receives from its normal business activities, usually from the sale of goods and services to customers. In many countries, such as the United Kingdom, revenue is referred to as turnover....
, fiscal
Fiscal policy
In economics and political science, fiscal policy is the use of government expenditure and revenue collection to influence the economy....
, monetary and security
Security
Security is the degree of protection against danger, damage, loss, and crime. Security as a form of protection are structures and processes that provide or improve security as a condition. The Institute for Security and Open Methodologies in the OSSTMM 3 defines security as "a form of protection...
decisions early on in the investment phase is therefore essential to establishing an effective economic growth
Economic growth
In economics, economic growth is defined as the increasing capacity of the economy to satisfy the wants of goods and services of the members of society. Economic growth is enabled by increases in productivity, which lowers the inputs for a given amount of output. Lowered costs increase demand...
policy, institutional and risk management
Risk management
Risk management is the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities...
framework.
Use in private and public investment financing
The right-financing can be extended to guide public and private corporations in raising funds in capital markets (both equity and debt) and in strengthening strategic investment advice with regard to mergers, acquisitions and other types of financial transactions. To this end, the concept of right-financing “ supports the determination of sustainable economic policies, strategies, financial institutions and market delivery capacities that balance governance and accountability, service quality and fiscal sustainability concerns with regard to both public and private investments”. The right-financing approach takes into consideration the political economyPolitical economy
Political economy originally was the term for studying production, buying, and selling, and their relations with law, custom, and government, as well as with the distribution of national income and wealth, including through the budget process. Political economy originated in moral philosophy...
of change and its implication for the investment climate; the processes of production, the acts of buying and selling, and their relationships to law
Law
Law is a system of rules and guidelines which are enforced through social institutions to govern behavior, wherever possible. It shapes politics, economics and society in numerous ways and serves as a social mediator of relations between people. Contract law regulates everything from buying a bus...
, markets, customs and government.
For more on right-financing follow the external links to the OECD and World Bank.
