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What Have We Learned about National Development Banks? Evidence from Brazil

Author

Listed:
  • Ricardo Barboza
  • Samuel Pessoa
  • Fábio Roitman
  • Eduardo Pontual Ribeiro

Abstract

There are 553 development banks in the world: 18% of these institutions haveemerged since the 2008 financial crisis. There is a large theoretical literature on such institutions,but the evidence on their effectiveness is scattered. This paper provides a systematicreview of causal effect studies of one of the largest and most representative developmentbanks in the world, the Brazilian Development Bank (BNDES). We review 48 academic papersthat estimate BNDES loans and credit programs impact in several policy dimensions. Ingeneral, the evidence indicates that development banks can be an effective instrument to increaseinvestment, exports, employment and GDP, particularly when borrowers are micro,small and medium-sized companies. The Brazilian experience also suggests that developmentbanks can be an important tool to fight against climate change, reducing deforestation. Onthe other hand, evidence indicates that the greatest difficulty for these institutions is to generatepositive impacts on productivity, an essential variable for economic growth. Finally, theevidence is inconclusive on political influence on development bank’s loans. JEL Classification: H81; L38; L52.

Suggested Citation

  • Ricardo Barboza & Samuel Pessoa & Fábio Roitman & Eduardo Pontual Ribeiro, 2023. "What Have We Learned about National Development Banks? Evidence from Brazil," Brazilian Journal of Political Economy, Center of Political Economy, vol. 43(3), pages 646-669.
    • Handle: RePEc:ekm:repojs:v:43:y:2023:i:3:p:646-669:id:2422
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    Cited by:

    1. Alejandro Danon & Rafael Tessone & Milena Valens Upegui, 2023. "Financing in times of crisis: lessons from the impact assessment of Banco Provincia's working capital credit line during the pandemic," Ensayos Económicos, Central Bank of Argentina, Economic Research Department, vol. 1(82), pages 77-97, November.

    More about this item

    Keywords

    Development banks; state-owned banks; systematic review; BNDES;
    All these keywords.

    JEL classification:

    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts
    • L38 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Policy
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods

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