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Catalytic Power Europe: Blended Finance in European External Action

Author

Listed:
  • Andrea Prontera
  • Rainer Quitzow

Abstract

The global influence of the European Union (EU) has been debated in overlapping strands of literature as ‘normative’, ‘regulatory’ and ‘market power’. They identify the diffusion of its rules and standards as a vehicle of European power. We argue that European power extends beyond its regulatory capacities and includes new ‘catalytic’ capacities in the realm of financing and network building. We analyse blended finance as an instrument of ‘catalytic power’, defined as the mobilisation of partners and their resources to pursue external objectives. The analysis reveals that financial leverage, the original motivation behind the tool's creation, has declined in importance. Instead, blended finance is designed to facilitate and structure cooperation with other European and multilateral financial institutions, positioning the European Commission as a central node in international cooperation and increasing its influence in this sphere. The article closes with a discussion of blended finance as a tool of catalytic power and related trade‐offs.

Suggested Citation

  • Andrea Prontera & Rainer Quitzow, 2023. "Catalytic Power Europe: Blended Finance in European External Action," Journal of Common Market Studies, Wiley Blackwell, vol. 61(4), pages 988-1006, July.
    • Handle: RePEc:bla:jcmkts:v:61:y:2023:i:4:p:988-1006
    DOI: 10.1111/jcms.13442
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    References listed on IDEAS

    as
    1. Bradford, Anu, 2015. "Exporting standards: The externalization of the EU's regulatory power via markets," International Review of Law and Economics, Elsevier, vol. 42(C), pages 158-173.
    2. Ole Winckler Andersen & Irene Basile & Antonie de Kemp & Gunnar Gotz & Erik Lundsgaarde & Magdalena Orth, 2019. "Blended Finance Evaluation: Governance and Methodological Challenges," OECD Development Co-operation Working Papers 51, OECD Publishing.
    3. Andrea Prontera & Rainer Quitzow, 2022. "The EU as catalytic state? Rethinking European climate and energy governance," New Political Economy, Taylor & Francis Journals, vol. 27(3), pages 517-531, May.
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    Cited by:

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    3. Daniel Preston, 2026. "The Long Rise of Private Finance in Development and the Implications for Policymakers," Journal of Developing Societies, , vol. 42(1), pages 57-94, March.
    4. Zhang, Xueyi & Xue, Zhongyi & Huang, Yiqing, 2024. "Does capital market liberalization enhance overseas market power of investment firms? An empirical study based on Chinese multinational corporations," Finance Research Letters, Elsevier, vol. 69(PA).

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