This publication is the revised version of a study and report commissioned by the Secretariat entitled Lowering The Threshold: Changing Private Investors´Perceptions by Reducing the Cost and Risk of Investment in least Developed, Small and Vulnerable Economies. The main premise of the study was that much effort by fovernments, aid donors and international financial institutions and regional development banks has been expended to improve the climate for private investment. However, the reality is that the least developed, small and vulnerable economies face particular problems in attracting private investmen. The report considers the practicalities of developing market-friendly financial instruments as a way of providing an incentive to investors in these economies. Lowering the Threshold has been the subject of intense consultation with both governments and IFIs. It will be of great interest to both policy-makers and professionals in the investment fields.