The Israeli government is in the midst of developing a strategy for international development, drawing on opportunities emerging from key trends in the field, such as increasing private sector involvement in finance and increasing use of advanced technologies.

This research is a preliminary step in the process of formulating the international development strategy. Accordingly, its main purpose is to expand and deepen the knowledge on barriers to expanding the private sector’s activities in the field of international development as well as the opportunities, tools and channels of action that will overcome them.

We review the economics of international development and the key barriers facing private companies in international development. The key barriers identified are the difficulty of finding partners in developing countries as well as lack of financing types appropriate to the development stages of companies. Given the barriers that companies encounter as they grow, the tools that overcome these barriers are mapped out through a combination of public and private financing, and the ways to integrate financing tools with complementary tools are described. Also presented are four channels for managing the tools described.

The research can serve as a basis for an informative discussion of possible avenues for promoting private sector activity in the field of international development.