The Future of National Development Banks

The topic of national development banks was largely neglected in the academic literature for a long period, and was limited to a debate between admirers and detractors of these institutions. Since the 2007/9 financial crisis, interest in and support for these institutions have broadly increased, in developing, emerging, and developed countries alike. The key issues are understanding how such development banks work, what their main aims are, what instruments, incentives, and governance work better in general and in particular contexts, and what are their links with the private financial and corporate sector, as well as with broader government policies. This book aims to provide an in-depth study of several key cases of national development banks (in Brazil, Chile, China, Colombia, Mexico, Germany, and Peru) as well as horizontal issues such as their role in innovation and structural change, infrastructure financing, financial inclusion, environmental sustainability, the countercyclical role of development financing, and the regulatory rules that are best for these institutions. From both a research and a policymaking perspective, this book concludes that development banks can make a significant contribution to development. It analyses their roles, the link with broader economic policies, their governance, and the main instruments they use to perform their functions. The book has important policy implications for countries that have development banks, so they can improve them, but also for countries which do not yet have them, and can learn from best practice should they wish to establish them.