IDEAS home Printed from https://ideas.repec.org/p/mil/wpdepa/2013-06.html
   My bibliography  Save this paper

Explaining Infrastructure Investment Decisions at the European Investment Bank 1958-2004

Author

Listed:
  • Judith CLIFTON
  • Daniel DÍAZ-FUENTES
  • JULIO REVUELTA

Abstract

From its origins in 1958, the European Investment Bank (EIB) was characterized by internal tensions as regards its mission in helping finance infrastructure projects around Europe. On the one hand, Italy had pushed for a social fund that would support less developed regions, whilst Germany promoted a not-for-profit bank that would borrow on international capital markets to lend to viable projects. This paper uses primary data on EIB loans to infrastructure across 1958 to 2004 to reveal how these different interests were played out in practice. Examining EIB infrastructure finance at the country level reveals the bank lent more to those countries most needing finance, thus fulfilling its social role. On the other hand, an analysis of its finance by sector and country shows how the bank changed its priorities, particularly from the 1980s, towards a closer alignment with market interests, as finance becomes increasingly linked to those key services that were being liberalized by the European Commission. Finally, an “enlargement” logic behind EIB finance can be detected, whereby finance prioritized newly acceding member states during the first few years of their membership of the union.

Suggested Citation

  • Judith CLIFTON & Daniel DÍAZ-FUENTES & JULIO REVUELTA, 2013. "Explaining Infrastructure Investment Decisions at the European Investment Bank 1958-2004," Departmental Working Papers 2013-06, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    • Handle: RePEc:mil:wpdepa:2013-06
    as

    Download full text from publisher

    File URL: http://wp.demm.unimi.it/files/wp/2013/DEMM-2013_06wp.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Debra Johnson & Colin Turner, 2007. "Strategy and Policy for Trans-European Networks," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-21066-0.
    2. Graham Bird & Dane Rowlands, 2001. "IMF lending: how is it affected by economic, political and institutional factors?," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 4(3), pages 243-270.
    3. Patrick Honohan, 1995. "The Public Policy Role of the European Investment Bank within the EU," Journal of Common Market Studies, Wiley Blackwell, vol. 33(3), pages 315-330, September.
    4. Harrigan, Jane & Wang, Chengang & El-Said, Hamed, 2006. "The economic and political determinants of IMF and world bank lending in the Middle East and North Africa," World Development, Elsevier, vol. 34(2), pages 247-270, February.
    5. Morrison, Kevin M., 2011. "As the World Bank Turns: Determinants of IDA Lending in the Cold War and After," Business and Politics, Cambridge University Press, vol. 13(2), pages 1-27, August.
    6. Carlo Fiorio & Massimo Florio, 2009. "The reform of network industries, privatisation and consumers’ welfare: evidence from the EU15," UNIMI - Research Papers in Economics, Business, and Statistics unimi-1088, Universitá degli Studi di Milano.
    7. José A. Carrasco‐Gallego, 2012. "The Marshall Plan and the Spanish postwar economy: a welfare loss analysis," Economic History Review, Economic History Society, vol. 65(1), pages 91-119, February.
    8. Morrison Kevin M, 2011. "As the World Bank Turns: Determinants of IDA Lending in the Cold War and After," Business and Politics, De Gruyter, vol. 13(2), pages 1-29, August.
    9. Millward,Robert, 2005. "Private and Public Enterprise in Europe," Cambridge Books, Cambridge University Press, number 9780521835244.
    10. Michael D. Bordo & Barry Eichengreen, 1993. "A Retrospective on the Bretton Woods System: Lessons for International Monetary Reform," NBER Books, National Bureau of Economic Research, Inc, number bord93-1, March.
    11. Nick Robinson, 2009. "The European Investment Bank: The EU's Neglected Institution," Journal of Common Market Studies, Wiley Blackwell, vol. 47, pages 651-673, June.
    12. A. Fedele & A. Mantovani & F. Liucci, 2010. "Credit availability in the crisis: which role for the European Investment Bank Group?," Working Papers 699, Dipartimento Scienze Economiche, Universita' di Bologna.
    13. Griffith-Jones, Stephany & Tyson, Judith & Calice, Pietro, 2011. "The European Investment Bank and SMEs: key lessons for Latin America and the Caribbean," Financiamiento para el Desarrollo 5216, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    14. Clifton, Judith & Díaz-Fuentes, Daniel, 2011. "La Nueva Política Económica de la OCDE ante el cambio en la Economía Mundial [The New Political Economy of the OECD in a context of Shifting World Wealth]," MPRA Paper 33010, University Library of Munich, Germany.
    15. William J. Hausman & Mira Wilkins & John L. Neufeld, 2007. "Global Electrification. Multinational Enterprise and International Finance in the History of Light and Power, 1880s-1914," Revue économique, Presses de Sciences-Po, vol. 58(1), pages 173-190.
    16. D. A. Pinder, 1986. "Small Firms, Regional Development and The European Investment Bank," Journal of Common Market Studies, Wiley Blackwell, vol. 24(3), pages 171-186, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. Andrea F. Presbitero & Alberto Zazzaro, 2010. "IMF Lending in Low- and Middle-Income Countries in the Wake of the Global Crisis," Development Working Papers 305, Centro Studi Luca d'Agliano, University of Milano.
    3. Presbitero, Andrea F. & Zazzaro, Alberto, 2012. "IMF Lending in Times of Crisis: Political Influences and Crisis Prevention," World Development, Elsevier, vol. 40(10), pages 1944-1969.
    4. Strand, Jonathan R. & Zappile, Tina M., 2015. "Always Vote for Principle, Though You May Vote Alone: Explaining United States Political Support for Multilateral Development Loans," World Development, Elsevier, vol. 72(C), pages 224-239.
    5. Onischenko, Volodimyr & Romanova, Tatyana, 2016. "The Study Of Realities And Prospects Of Interaction Of Ukraine With European Financial Organizations In The Conditions Of Integration Processes," EUREKA: Social and Humanities, Scientific Route OÜ, issue 4, pages 9-15.
    6. 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).
    7. Krishna Chaitanya Vadlamannati & Yuanxin Li & Samuel Brazys & Alexander Dukalskis, 2019. "Building Bridges or Breaking Bonds? The Belt and Road Initiative and Foreign Aid Competition," Working Papers 201906, Geary Institute, University College Dublin.
    8. Robert K. Fleck & Christopher Kilby, 2006. "World Bank Independence: A Model and Statistical Analysis of US Influence," Review of Development Economics, Wiley Blackwell, vol. 10(2), pages 224-240, May.
    9. Dennis Essers & Stefaan Ide, 2017. "The IMF and precautionary lending : An empirical evaluation of the selectivity and effectiveness of the flexible credit line," Working Paper Research 323, National Bank of Belgium.
    10. Diego Saravia, 2010. "Vulnerability, Crisis and Debt Maturity: do IMF Interventions Shorten the Length of Borrowing?," Working Papers Central Bank of Chile 600, Central Bank of Chile.
    11. Anwar, Mumtaz, 2005. "The Political Economy of International Financial Institutions? Lending to Pakistan," HWWA Discussion Papers 338, Hamburg Institute of International Economics (HWWA).
    12. Judith Clifton & Pierre Lanthier & Harm Schröter, 2011. "Regulating and deregulating the public utilities 1830--2010," Business History, Taylor & Francis Journals, vol. 53(5), pages 659-672, August.
    13. Hugh Goldsmith, 2014. "The Long-Run Evolution of Infrastructure Services," CESifo Working Paper Series 5073, CESifo.
    14. Marin Ferry & Marc Raffinot & Baptiste Venet, 2016. "Low Income Countries and External Public Financing : Does Debt Relief Change Anything?," Working Papers DT/2016/16, DIAL (Développement, Institutions et Mondialisation).
    15. Andrea Filippo Presbitero & Alberto Zazzaro, 2010. "The Global Crisis in Low- and Middle-Income Countries: How the IMF Responded," Mo.Fi.R. Working Papers 35, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    16. Arthur Foch, 2013. "Explaining the G7 and G10's influence on World Bank decisions: The role of formal and informal rules of governance," Documents de travail du Centre d'Economie de la Sorbonne 13035, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    17. Oberdabernig, Doris A., 2013. "Revisiting the Effects of IMF Programs on Poverty and Inequality," World Development, Elsevier, vol. 46(C), pages 113-142.
    18. Essers, Dennis & Ide, Stefaan, 2019. "The IMF and precautionary lending: An empirical evaluation of the selectivity and effectiveness of the Flexible Credit Line," Journal of International Money and Finance, Elsevier, vol. 92(C), pages 25-61.
    19. Dreher, Axel & Sturm, Jan-Egbert & Vreeland, James Raymond, 2009. "Global horse trading: IMF loans for votes in the United Nations Security Council," European Economic Review, Elsevier, vol. 53(7), pages 742-757, October.
    20. Erforth, Benedikt, 2020. "The future of European development banking: What role and place for the European Investment Bank?," IDOS Discussion Papers 11/2020, German Institute of Development and Sustainability (IDOS).

    More about this item

    Keywords

    European Investment Bank; Infrastructure investment; International Finance; Economic Development; European Integration;
    All these keywords.

    JEL classification:

    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • N24 - Economic History - - Financial Markets and Institutions - - - Europe: 1913-
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mil:wpdepa:2013-06. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: DEMM Working Papers (email available below). General contact details of provider: https://edirc.repec.org/data/damilit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.