What should the World Bank optimally do with the US$10 to $20 billion it can loan each year? Has it, in fact, done what is optimal? These two questions, one theoretical and one empirical, have been around for a long time and remain controversial in both academic and policy circles. This study seeks to contribute to the debate by suggesting a simple framework within which to measure the World Bank against an optimal international public financier for development. It goes on to argue that a careful treatment of the empirical evidence on Bank lending strongly contradicts optimal behavior under different assumptions. The evidence, in fact, rejects any notion that the Bank has substituted for private capital or that it has successfully catalyzed private development finance. These questions of fact are separate from the normative issues of whether to “mend” or “end” the current system of multilateral development finance.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Center for Global Development in its series Working Papers with number
20.
Find related papers by JEL classification: F35 - International Economics - - International Finance - - - Foreign Aid F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions O19 - Economic Development, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements