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Financing utilities: How the role of the European Investment Bank shifted from regional development to making markets

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  • Clifton, Judith
  • Díaz-Fuentes, Daniel
  • Revuelta, Julio

Abstract

In the face of continuing financial and economic crises, the European Investment Bank (EIB) has been criticized for being overly-conservative in its loans to Europe. Critics in particular have called on the EIB to vastly increase its investment in utilities as a counter-cyclical measure. To take stock and, in order to evaluate the role of the EIB in financing utilities over time, we compile and analyze an original database of all EIB utilities project loans from 1958 to 2004. We find the EIB started out by functioning as a regional development bank, prioritizing utilities finance in its members' poorer zones; however, energy crises in the 1970s marked a shift whereby the logic of EIB finance to utilities became more politically-oriented. By the 1980s, utilities projects supported by the EIB were intimately related to those required for the Single Market. The origins of the EIB's current conservative approach to utilities loans was born in the 1970s and fully consolidated by the 1990s.

Suggested Citation

  • Clifton, Judith & Díaz-Fuentes, Daniel & Revuelta, Julio, 2014. "Financing utilities: How the role of the European Investment Bank shifted from regional development to making markets," Utilities Policy, Elsevier, vol. 29(C), pages 63-71.
  • Handle: RePEc:eee:juipol:v:29:y:2014:i:c:p:63-71
    DOI: 10.1016/j.jup.2013.10.004
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Marco FRIGERIO & Daniela VANDONE, 2018. "Virtuous or Vicious? Development Banks in Europe," Departmental Working Papers 2018-07, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    2. Zeilbeck, Severin, 2015. "An investment initiative for fiscally constrained EU member states: The role of synergetic financial instruments," IPE Working Papers 58/2015, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    3. repec:spr:anresc:v:60:y:2018:i:3:d:10.1007_s00168-016-0784-3 is not listed on IDEAS
    4. Lanthier, Pierre, 2014. "From the Raj to Independence: British investment in the Indian electricity sector," Utilities Policy, Elsevier, vol. 29(C), pages 44-53.
    5. repec:eee:juipol:v:52:y:2018:i:c:p:88-94 is not listed on IDEAS
    6. repec:eee:juipol:v:48:y:2017:i:c:p:147-156 is not listed on IDEAS
    7. Hausman, William J. & Neufeld, John L. & Schreiber, Till, 2014. "Multilateral and bilateral aid policies and trends in the allocation of electrification aid, 1970–2001," Utilities Policy, Elsevier, vol. 29(C), pages 54-62.
    8. Del Bo, Chiara D. & Ferraris, Matteo & Florio, Massimo, 2017. "Governments in the market for corporate control: Evidence from M&A deals involving state-owned enterprises," Journal of Comparative Economics, Elsevier, vol. 45(1), pages 89-109.

    More about this item

    Keywords

    Utilities; Finance; European Investment Bank; Development; Globalization;

    JEL classification:

    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • N24 - Economic History - - Financial Markets and Institutions - - - Europe: 1913-
    • N74 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Europe: 1913-
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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