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A macro-framework for successful development banks


  • Janine Thorne
  • Charlotte du Toit


The large-scale failures of development banks in the 1970s and 1980s meant that they all but disappeared from the development agenda. However, there are still a large number of development banks worldwide that operate with various degrees of success. Some governments are also looking to re-establish such banks to address the shortage of finance for higher-risk market segments. To avoid a repeat of the earlier failures, government policy needs to be informed by an objective framework for the success of these banks. This article, based on economic theory and informed by case studies, outlines such a framework. It addresses the following six dimensions of these banks: enabling environment, mandate, regulation and supervision, governance and management, financial sustainability and performance assessment. Development banking remains a risky initiative but, managed appropriately, and using this framework, it can help achieve development objectives.

Suggested Citation

  • Janine Thorne & Charlotte du Toit, 2009. "A macro-framework for successful development banks," Development Southern Africa, Taylor & Francis Journals, vol. 26(5), pages 677-694.
  • Handle: RePEc:taf:deveza:v:26:y:2009:i:5:p:677-694 DOI: 10.1080/03768350903303183

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    References listed on IDEAS

    1. Johan Fourie, 2006. "Economic Infrastructure: A Review Of Definitions, Theory And Empirics," South African Journal of Economics, Economic Society of South Africa, vol. 74(3), pages 530-556, September.
    2. Fink, Carsten & Mattoo, Aaditya & Neagu, Ileana Cristina, 2005. "Assessing the impact of communication costs on international trade," Journal of International Economics, Elsevier, vol. 67(2), pages 428-445, December.
    3. Robinson, James A. & Torvik, Ragnar, 2005. "White elephants," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 197-210, February.
    4. Limao, Nuno & Venables, Anthony J., 1999. "Infrastructure, geographical disadvantage, and transport costs," Policy Research Working Paper Series 2257, The World Bank.
    5. Peter Perkins & Johann Fedderke & John Luiz, 2005. "An Analysis Of Economic Infrastructure Investment In South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 73(2), pages 211-228, June.
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    Cited by:

    1. Thorsten Beck & Samuel Munzele Maimbo & Issa Faye & Thouraya Triki, 2011. "Financing Africa : Through the Crisis and Beyond," World Bank Publications, The World Bank, number 2355, June.
    2. Riham Shendy & Zachary Kaplan & Peter Mousley, 2011. "Toward Better Infrastructure : Conditions, Constraints, and Opportunities in Financing Public-Private Partnerships in Select African Countries," World Bank Publications, The World Bank, number 2331.
    3. World Bank, 2013. "Mongolia : Improving Public Investments to Meet the Challenge of Scaling Up Infrastructure," World Bank Other Operational Studies 13256, The World Bank.


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