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‘Minilateral’ Development Banks: What the Rise of Africa's Trade and Development Bank says about Multilateral Governance

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  • Chris Humphrey

Abstract

Multilateral development banks (MDBs) are one of the most popular forms of international organization, with at least 27 operating in the world today. Although most academics and policy makers focus on the World Bank and major regional MDBs, the majority of MDBs are in fact relatively small, and controlled by developing as opposed to industrialized countries. How do the differing governance arrangements of these ‘minilateral’ development banks (MnDBs) impact their operations? This article takes the Trade and Development Bank (TDB), an MDB in Africa with 22 regional member countries, as a case study to consider this question. Based on an analysis of TDB's track record since 2005 and interviews with management and shareholders, the author finds that borrower‐led governance leads to substantial disadvantages in terms of access to finance. Borrower‐led governance permits TDB and other MnDBs greater operational flexibility, which partially compensates for this financial disadvantage, but these operational strategies come with trade‐offs in terms of developmental effectiveness. The findings suggest that MnDBs have substantial latent potential and, in an increasingly multipolar world, they are likely to grow in coming years. However, MnDBs need to ensure that their developmental value added is strengthened in step with their financial power.

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  • Chris Humphrey, 2019. "‘Minilateral’ Development Banks: What the Rise of Africa's Trade and Development Bank says about Multilateral Governance," Development and Change, International Institute of Social Studies, vol. 50(1), pages 164-190, January.
    • Handle: RePEc:bla:devchg:v:50:y:2019:i:1:p:164-190
    DOI: 10.1111/dech.12467
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    References listed on IDEAS

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    1. Stephany Griffith-Joneswith & David Griffith-Jo & Dagmar Hertova, 2008. "Enhancing the Role of Regional Development Banks," G-24 Discussion Papers 50, United Nations Conference on Trade and Development.
    2. Chris Humphrey, 2014. "The politics of loan pricing in multilateral development banks," Review of International Political Economy, Taylor & Francis Journals, vol. 21(3), pages 611-639, June.
    3. Chris Humphrey, 2017. "He who pays the piper calls the tune: Credit rating agencies and multilateral development banks," The Review of International Organizations, Springer, vol. 12(2), pages 281-306, June.
    4. Chris Humphrey, 2016. "The Invisible Hand: Financial Pressures and Organisational Convergence in Multilateral Development Banks," Journal of Development Studies, Taylor & Francis Journals, vol. 52(1), pages 92-112, January.
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    6. Krasner, Stephen D., 1981. "Power structures and regional development banks," International Organization, Cambridge University Press, vol. 35(2), pages 303-328, April.
    7. Vreeland,James Raymond & Dreher,Axel, 2014. "The Political Economy of the United Nations Security Council," Cambridge Books, Cambridge University Press, number 9780521518413, September.
    8. Babb, Sarah, 2009. "Behind the Development Banks," University of Chicago Press Economics Books, University of Chicago Press, number 9780226033648, December.
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    Cited by:

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    2. McHugh, Christopher A., 2023. "Competitive conditions in development finance," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 83(C).

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