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This case explores the International Finance Corporation's (IFC) creative and effective use of the private equity business model as a tool to mobilize financing for economic development around the world. In its bid to provide more capital for private sector investment in developing countries, IFC played a key role in the emergence of the private equity industry in these markets through its funds' investments and, later, created its own third-party fund management platform-IFC Asset Management Company (AMC). Through the experience of AMC, the case considers broader issues typically faced by a private equity business in setting its strategy. These include: how can a fund manager decide the optimal size of assets under management? Given its resources and capabilities, what new funds could a firm raise, and what sectors should it target? The case further delves into the working mechanisms of AMC and thereby explains how AMC, as a special type of fund manager, handles different phases of private equity business. Finally, the case considers the key challenges IFC and AMC face today and assesses what the future might hold for each. As the largest global development institution focusing on the private sector, IFC had been an important player in developing countries. However, IFC's target markets continue to rapidly evolve and attract more capital and players, both local and international. How could IFC stay relevant and continue to play a differentiated leadership role in emerging markets under these circumstances? What other products and services could it offer to support the private sector in these countries in a distinct and impactful way?

Business Liability and Economic Damages is a five-chapter book published by Business Expert Press in 2016 and written by Scott D. Gilbert, associate professor of economics at Southern Illinois University, Carbondale. This book considers potential liability in business and provides insight into estimating the damages associated with liability. The author reviews the roles of insurance, the legal system, and the economist in evaluating liability and compensation for loss. He also provides basic mathematical formulas involved in determining economic loss, illustrating concepts with examples where relevant. Each chapter begins with learning objectives and ends with a short list of exercises to reinforce key concepts. In Chapter 1, Business Liability (17 pages), the author begins by defining the scope of liability possible in the social contract between business and society. He explains that the range of potential liability in a social contract is wide and shows how to analyze potential liability in a six-part model of relationships: customers, employees, owners, the public, government, and others. He explains the role that insurance plays in the social contract and the relationship of insurance to business. He also explores how the legal system provides a framework for liability considerations. He reviews the main types of harm, torts and breach of contract, as well as the system for resolving liability claims, and illustrates simple business liability through an example of unpaid rent.

Business Liability and Economic Damages is a five-chapter book published by Business Expert Press in 2016 and written by Scott D. Gilbert, associate professor of economics at Southern Illinois University, Carbondale. This book considers potential liability in business and provides insight into estimating the damages associated with liability. The author reviews the roles of insurance, the legal system, and the economist in evaluating liability and compensation for loss. He also provides basic mathematical formulas involved in determining economic loss, illustrating concepts with examples where relevant. Each chapter begins with learning objectives and ends with a short list of exercises to reinforce key concepts. Chapter 2, Economic Loss (21 pages), characterizes the kinds of loss possible in business liability. The author defines loss as the prevention or limitation of economic opportunity and lists ten categories of opportunity, including competitive markets, employment and pensions, and intellectual property. He explains the relationship between economic opportunities and the consumption of goods, and the concept of utility of goods, showing how business liability reduces the utility of goods. He demonstrates how to model loss using the economic concepts of utility and consumption, and provides insight to the underlying principles of the mathematical formula. He explores the six properties of markets and how these impact the evaluation of economic loss. He also reviews how economic loss is handled in the legal system.

Business Liability and Economic Damages is a five-chapter book published by Business Expert Press in 2016 and written by Scott D. Gilbert, associate professor of economics at Southern Illinois University, Carbondale. This book considers potential liability in business and provides insight into estimating the damages associated with liability. The author reviews the roles of insurance, the legal system, and the economist in evaluating liability and compensation for loss. He also provides basic mathematical formulas involved in determining economic loss, illustrating concepts with examples where relevant. Each chapter begins with learning objectives and ends with a short list of exercises to reinforce key concepts. In Chapter 3, Compensation for Loss (35 pages), the author considers different perspectives on the transfer of economic opportunity from one party to another. First, he looks at the principles behind how a court awards an appropriate compensation amount. Second, he looks at how markets impact compensation estimates and reviews basic pricing formulas. He explains how to estimate compensation due to the wrongful loss of earnings streams and explains the asset pricing formula. He provides examples of other useful mathematical formulas, including how to treat uncertainty. He also reviews loss related to the option to pursue economic opportunity, both as real options and financial options, and uses examples to illustrate the relevant formulas. The chapter includes an appendix on risk-averse asset pricing with additional explanation of the follow-up formulas to the law of one price.

Business Liability and Economic Damages is a five-chapter book published by Business Expert Press in 2016 and written by Scott D. Gilbert, associate professor of economics at Southern Illinois University, Carbondale. This book considers potential liability in business and provides insight into estimating the damages associated with liability. The author reviews the roles of insurance, the legal system, and the economist in evaluating liability and compensation for loss. He also provides basic mathematical formulas involved in determining economic loss, illustrating concepts with examples where relevant. Each chapter begins with learning objectives and ends with a short list of exercises to reinforce key concepts. Chapter 4, Evidence of Loss (34 pages), provides insight into how evidence affects a liability claim. The author explores the insurance company's perspective and need for reliable evidence. He also looks at the court's perspective and standards of evidence, which create the framework used by society to assess economic harm. He considers how the court uses evidence to determine the monetary value of loss and the impact of different criteria on that value. He explains how an economist can add value in a court trial and reviews how the court treats statistical data. He examines the issues inherent in estimating utility of consumption in cases where the utility includes pleasure or enjoyment of life. The chapter includes an appendix about the role an economist can play in determining business liability in personal injury trials.

Business Liability and Economic Damages is a five-chapter book published by Business Expert Press in 2016 and written by Scott D. Gilbert, associate professor of economics at Southern Illinois University, Carbondale. This book considers potential liability in business and provides insight into estimating the damages associated with liability. The author reviews the roles of insurance, the legal system, and the economist in evaluating liability and compensation for loss. He also provides basic mathematical formulas involved in determining economic loss, illustrating concepts with examples where relevant. Each chapter begins with learning objectives and ends with a short list of exercises to reinforce key concepts. In Chapter 5, Loss to Workers and Families (23 pages), the author expands on specific factors that impact economic damages when a business liability claim involves wrongful injury or death. He reviews the calculation of work life expectancy in determining economic loss. He also reviews the role of household services and how they factor into economic loss. He considers economic loss that includes life care for long-term physical disability and how this value is determined.

The Libra Foundation is exploring how to grow the food sector in Maine using the strategy of creating a food cluster initiative. Maine is one of the poorest states in the United States and the food sector is one of the largest employers. Multiple efforts in agriculture, aquaculture, and food processing exist but are not coordinated. The Foundation owns three food companies. Its CEO needs to decide what action if any the Foundation should take given the data from the Cluster Tool-a nation data set and other research on successful food cluster initiatives in other states.

A principal objective of economic thinking is to inform key decisions made by firms and their managers. One of the most important topics for managers concerns the basic choices about labor: How many people should I hire, and what should I pay them? Using the context of football (soccer) in Brazil, this case can be used to explore players' current and future worth to a team. Analysis could include marginal product of labor, marginal revenue product, team profitability, and how managers might fund player acquisitions while still generating consistent profits.

Balance of payments (BOP) accounting conventions, never straightforward, have been complicated recently by the introduction of new standards. This note presents a short description of BOP and international investment position (IIP) data. It refers to data for the United States, Brazil, and South Africa, but given that there are worldwide standards for countries that report BOP and IIP, it should provide guidance for understanding the data of just about any country. It is meant to be a resource that students can refer to time and time again as they gain a deeper understanding of BOP data.

Valued at $80 billion annually, state and local tax incentives are an important source of capital for expanding or relocating businesses. Using Tesla's recent $1.4 billion megadeal in Nevada as an example, we outline best practices for negotiating incentive packages. This installment of Accounting Matters discusses the evolution of incentives and provides insights regarding the regulatory and oversight changes that business owners and executives should anticipate. We conclude with recommendations for navigating increased compliance and reporting burdens.

The Yasuní-ITT (Ishpingo-Tambococha-Tiputini) Trust Fund was established to receive contributions from donors supporting Ecuador's historical decision to permanently relinquish the extraction of crude from the ITT oil block, a field located at the Ecuadorean Amazonia's Yasuní National Park (YNP) that was estimated to hold a reserve of 846 million barrels of oil. Contributions would be used to fund renewable energy projects and sustainable development investments, such as deforestation reduction and ecosystem preservation in Ecuador's Amazon region. Thus, appealing to a global spirit of shared responsibility, President Rafael Correa's government requested that the international community compensated Ecuador with US$ 3.6 billion (paid over a 13-year period) to cover half of the revenues the country would fail to receive as a result of its decision to relinquish oil extraction at ITT. International contributions would be viewed as a compensation for Ecuadoreans' sacrifice, which would bring significant public benefits for the entire planet, including a less contaminated atmosphere. This case consists of three parts and has been designed for a two-session discussion. Sections A and B may be discussed during a first 90-minute class and require no previous preparation from students. These sections focus on encouraging class participants to make a critical analysis of the type and amount of information necessary to make a decision. Section C will be discussed in a second 90-minute session and requires students to prepare this case beforehand, making the necessary financial calculations for this analysis. Part A explores the period before November 24, 2009, when President Correa and UNDP announce the terms for the draft agreement for Yasuní-ITT's Trust Fund.

Supplement to case AN0017. The Yasuní-ITT (Ishpingo-Tambococha-Tiputini) Trust Fund was established to receive contributions from donors supporting Ecuador's historical decision to permanently relinquish the extraction of crude from the ITT oil block, a field located at the Ecuadorean Amazonia's Yasuní National Park (YNP) that was estimated to hold a reserve of 846 million barrels of oil. Contributions would be used to fund renewable energy projects and sustainable development investments, such as deforestation reduction and ecosystem preservation in Ecuador's Amazon region. Thus, appealing to a global spirit of shared responsibility, President Rafael Correa's government requested that the international community compensated Ecuador with US$ 3.6 billion (paid over a 13-year period) to cover half of the revenues the country would fail to receive as a result of its decision to relinquish oil extraction at ITT. International contributions would be viewed as a compensation for Ecuadoreans' sacrifice, which would bring significant public benefits for the entire planet, including a less contaminated atmosphere. This case consists of three parts and has been designed for a two-session discussion. Sections A and B may be discussed during a first 90-minute class and require no previous preparation from students. These sections focus on encouraging class participants to make a critical analysis of the type and amount of information necessary to make a decision. Section C will be discussed in a second 90-minute session and requires students to prepare this case beforehand, making the necessary financial calculations for this analysis. Part B focus on the analysis of processes used to request relevant information about a project.

Supplement to case AN0017. The Yasuní-ITT (Ishpingo-Tambococha-Tiputini) Trust Fund was established to receive contributions from donors supporting Ecuador's historical decision to permanently relinquish the extraction of crude from the ITT oil block, a field located at the Ecuadorean Amazonia's Yasuní National Park (YNP) that was estimated to hold a reserve of 846 million barrels of oil. Contributions would be used to fund renewable energy projects and sustainable development investments, such as deforestation reduction and ecosystem preservation in Ecuador's Amazon region. Thus, appealing to a global spirit of shared responsibility, President Rafael Correa's government requested that the international community compensated Ecuador with US$ 3.6 billion (paid over a 13-year period) to cover half of the revenues the country would fail to receive as a result of its decision to relinquish oil extraction at ITT. International contributions would be viewed as a compensation for Ecuadoreans' sacrifice, which would bring significant public benefits for the entire planet, including a less contaminated atmosphere. This case consists of three parts and has been designed for a two-session discussion. Sections A and B may be discussed during a first 90-minute class and require no previous preparation from students. These sections focus on encouraging class participants to make a critical analysis of the type and amount of information necessary to make a decision. Section C will be discussed in a second 90-minute session and requires students to prepare this case beforehand, making the necessary financial calculations for this analysis. Part C delves into the following areas: 1. Financial valuation of oil exploitation projects; 2. Examining agreements and their compatibility with signing agents, and 3. Analyzing the social and political threats that may jeopardize a project.

This technical note explores one of the most important topics for firms and their managers: labor. In particular, how many people should a firm hire, and how much should they be paid? The note uses the example of Wail Al-Hayani, the owner of a kitchen that provides fresh prepared food to quick-service restaurants, to explore hiring decisions and setting wages and salaries-and the marginal values that matter. If Al-Hayani hires more workers, it would mean extra output and revenue, so long as the value of the marginal product of labor exceeds the wage. To maximize profits, a competitive firm should hire workers up to the point where the value of the marginal product of labor equals the wage.

This case assesses Actis' optimal exit route for Umeme, a Ugandan electricity distribution company in their investment portfolio. Actis, a private equity firm that invests exclusively in Africa, Asia, and Latin America, had spent seven years substantially transforming Umeme. In their search for a suitable exit, the partners at Actis weighed their ability to leave Umeme well positioned to continue the operational and financial improvements that Actis had made during their investment period, while also ensuring a robust return for Actis' investors. By exploring the various routes available to Actis, this case demonstrates the factors at play in the creation of social and economic gains through private equity investment.

For over half a century, most of the world's economies have enjoyed steady growth and prosperity. However, beginning in the 1980s, and continuing essentially unabated to the present, the gap between the "haves" and the "have-nots" in developed countries has widened, with a small proportion of the population reaping an increasingly larger share of a country's economic rewards. This growing economic inequality has been particularly pronounced in the United States, but the phenomenon has also occurred in many nations, among them Germany, Japan and Sweden. This note provides background on aspects of economic inequality. It begins by describing both income inequality and wealth inequality, providing an explanation of two widely used metrics and data that show increasing inequalities over time. It then moves to the factors that might contribute to this inequality, as well to propositions of economic and social consequences that might result from the widening gap. Finally, it addresses the issue of "equality of opportunity" or social mobility.

As Asia's population and per capita incomes rise, four key components of its natural resource base are set to decline substantially. The authors group the environmental problems that confront Asia into four categories-water management, deforestation and land degradation, air pollution, and climate change. They then provide seven policy objectives that can serve as a platform from which to address these problems, at both regional and local levels. Embracing these objectives, they believe, will facilitate the management of Asia's environmental problems to 2030 and beyond.

This is an MIT Sloan Management Review article. How do consumers access, buy and use their favorite products and services? While individuals traditionally have seen ownership as the most desirable way, increasing numbers of consumers are paying to temporarily access or share products and services rather than buy or own them. This so-called "sharing economy"is growing rapidly, although estimates for the current size of the nascent market vary substantially. Well-known examples of successful startups built on collaborative consumption systems include Airbnb Inc. Growth in sharing systems has been particularly fueled by the Internet with its rise of social media systems, which facilitate connections between peers eager to share their possessions. The central conceit of collaborative consumption is simple: obtain value from untapped potential residing in goods that are not entirely exploited by their owners. The sharing economy might represent a serious threat to established industries. However, the authors' research suggests six ways in which companies can respond: (1) by selling use of a product rather than ownership, (2) by supporting customers in their desire to resell goods, (3) by exploiting unused resources and capacities, (4) by providing repair and maintenance services, (5) by using collaborative consumption to target new customers, and (6) by developing entirely new business models enabled by collaborative consumption.

The purpose of this note is to characterize the challenges entrepreneurs may face in creating a well-functioning ecosystem of users, and to equip entrepreneurs with tools to overcome these obstacles. The note is meant to accompany the final module of the "The Online Economy: Strategy and Entrepreneurship," an elective course taught at Harvard Business School. This is an abridgment of HBP 911066.

Simon Caufield and Bob Phillips had just put the finishing touches on the business plan for Nomis Solutions, a start-up company that planned to offer price-optimization solutions to financial service firms. Nomis aimed to use advanced analytic techniques to help its clients to set prices for consumer loans and deposits. Was there a market for the products and services that Nomis planned to offer? If so, how large was the market? What would persuade potential clients that Nomis's product and services would add value?