The Dual Nature of Multilateral Development Banks: Balancing Development and Financial Logics

This Element provides a novel perspective on Multilateral Development Banks (MDBs) by examining the complex trade-offs between financial and development pressures faced by these organizations. It argues that lending to the private sector and being predominantly owned by borrowing members increase MDBs' emphasis on the financial at the expense of the development nature. An original dataset is used to test the argument, and the analysis shows that these factors contribute to variation in response patterns across MDBs. This Element offers unique insights into MDBs' responses to their dual nature and advances our understanding of MDB lending operations, highlighting the complexities involved in the unique MDB business model.

Format: Paperback / softback
Length: 75 pages
Publication date: 06 April 2023
Publisher: Cambridge University Press

This Element presents a novel and highly relevant perspective on Multilateral Development Banks (MDBs), which are development and financial organizations simultaneously. Drawing from the elaborate institutional logics perspective borrowed from organizational sociology, it delves into the intricate trade-offs between financial and development pressures faced by MDBs and elucidates the diverse organizational responses to these pressures across different types of MDBs. The argument is empirically tested using an original dataset, employing Data Envelopment Analysis (DEA) to explain variation in response patterns across MDBs. The analysis reveals that lending to the private sector, as well as being predominantly owned by borrowing members, significantly enhances MDBs' emphasis on financial considerations at the expense of their development-oriented nature. Consequently, this Element offers unique insights into MDBs' responses to their dual nature, significantly advancing our understanding of MDB lending operations. It also draws attention to the complexities inherent in the unique business model of MDBs, highlighting the need for further exploration and analysis in this field.

ISBN-13: 9781009392303