Chapter

A Global Lottery and a Global Premium Bond

Tony Addison and Abdur R. Chowdhury

in New Sources of Development Finance

Published in print November 2004 | ISBN: 9780199278558
Published online January 2005 | e-ISBN: 9780191601590 | DOI: http://dx.doi.org/10.1093/0199278555.003.0008

Series: WIDER Studies in Development Economics

A Global Lottery and a Global Premium Bond

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Proposals are evaluated, from both an economic and an ethical viewpoint, for development funding through a global lottery, along with a complement to this: a global premium bond (a loan instrument in which the interest takes the form of a lottery prize, the capital being repayable on request, so that it has the characteristics of a savings product, which makes it potentially attractive to ethical investors). The chapter starts by looking at how a global lottery might work, evaluating the issue by discussing lottery operators and their regulation, the market for lotteries, competition between the global lottery and national lotteries, the challenge posed by Internet gambling, revenue‐raising potential, cross‐county equity, distributional and welfare effects, ethical issues, and development education. The potential for a global premium bond is then analysed, summarising the UK premium bond scheme as a model for a global version, setting out the modalities of a global premium bond and highlighting the differences from a global lottery. It is concluded that global versions of both a lottery and a premium bond are viable and complementary in mobilizing more development finance.

Keywords: competition between global lottery and national lotteries; cross‐county equity; development education; development funding; distributional effects; ethical issues; global lottery; global premium bond; Internet gambling; lottery operators; market for lotteries; regulation; revenue potential; welfare effects

Chapter.  10070 words. 

Subjects: Economic Development and Growth

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