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Financing Development: Private Capital Mobilization and Institutional Investors

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  • Inderst, Georg

Abstract

This report discusses key issues around the mobilization of private capital for development. Investment requirements are huge, especially for infrastructure, climate and other SDG-related investments. External finance for developing countries stagnated in the years before the pandemic, followed by a major setback in 2020/2021. The focus is in particular on institutional investors, whose exposure to less-developed countries is still very low, even more so in unlisted assets and projects. There is a potential for progress as asset owners seek new diversification opportunities in growth markets. The main burden is on governments to create favourable business conditions for investable long-term assets. Policy makers, development finance institutions and investors should utilize the full spectrum of investment vehicles - commercial, impact and blended finance.

Suggested Citation

  • Inderst, Georg, 2021. "Financing Development: Private Capital Mobilization and Institutional Investors," EconStor Preprints 232266, ZBW - Leibniz Information Centre for Economics.
    • Handle: RePEc:zbw:esprep:232266
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    File URL: https://www.econstor.eu/bitstream/10419/232266/1/Inderst-Financing-Development-March2021.pdf
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    References listed on IDEAS

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    1. Chiara Broccolini & Giulia Lotti & Alessandro Maffioli & Andrea F Presbitero & Rodolfo Stucchi, 2021. "Mobilization Effects of Multilateral Development Banks," The World Bank Economic Review, World Bank, vol. 35(2), pages 521-543.
    2. Carter, Patrick & Van de Sijpe, Nicolas & Calel, Raphael, 2021. "The elusive quest for additionality," World Development, Elsevier, vol. 141(C).
    3. Raphaël Jachnik & Randy Caruso & Aman Srivastava, 2015. "Estimating Mobilised Private Climate Finance: Methodological Approaches, Options and Trade-offs," OECD Environment Working Papers 83, OECD Publishing.
    4. Inderst, Georg, 2020. "Social Infrastructure Finance and Institutional Investors. A Global Perspective," MPRA Paper 99239, University Library of Munich, Germany.
    5. Håvard Halland & Adam Dixon & Soh Young In & Ashby Monk & Rajiv Sharma, 2021. "Mobilising institutional investor capital for climate-aligned development," OECD Development Policy Papers 35, OECD Publishing.
    6. Inderst, Georg, 2013. "Private infrastructure finance and investment in Europe," EIB Working Papers 2013/02, European Investment Bank (EIB).
    7. Inderst, Georg & Stewart, Fiona, 2014. "Institutional Investment in Infrastructure in Emerging Markets and Developing Economies," MPRA Paper 62522, University Library of Munich, Germany.
    8. Rabah Arezki & Patrick Bolton & Sanjay Peters & Frédéric Samama & Joseph Stiglitz, 2017. "From global savings glut to financing infrastructure," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 32(90), pages 221-261.
    9. Georg Inderst & Raffaele Della Croce, 2013. "Pension Fund Investment in Infrastructure: A Comparison Between Australia and Canada," OECD Working Papers on Finance, Insurance and Private Pensions 32, OECD Publishing.
    10. Julie Rozenberg & Marianne Fay, 2019. "Beyond the Gap," World Bank Publications - Books, The World Bank Group, number 31291.
    11. Daniel Gurara & Mr. Vladimir Klyuev & Miss Nkunde Mwase & Mr. Andrea F Presbitero & Ms. Xin Cindy Xu & Mr. Geoffrey J Bannister, 2017. "Trends and Challenges in Infrastructure Investment in Low-Income Developing Countries," IMF Working Papers 2017/233, International Monetary Fund.
    12. Irene Basile & Jarrett Dutra, 2019. "Blended Finance Funds and Facilities: 2018 Survey Results," OECD Development Co-operation Working Papers 59, OECD Publishing.
    13. Cordella,Tito, 2018. "Optimizing finance for development," Policy Research Working Paper Series 8320, The World Bank.
    14. Inderst, Georg, 2010. "Infrastructure as an asset class," EIB Papers 3/2010, European Investment Bank, Economics Department.
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    Cited by:

    1. Yi, Zhaoying & Xu, Xiaowei & Wei, Minghai & Lin, Bingxuan, 2023. "Foreign institutional ownership externalities and supplier innovation," Journal of Corporate Finance, Elsevier, vol. 80(C).
    2. Rashmi Umesh Arora & Tapan Sarker, 2023. "Financing for Sustainable Development Goals (SDGs) in the Era of COVID-19 and Beyond," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 35(1), pages 1-19, February.

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    More about this item

    Keywords

    development finance; private capital; institutional investors; SDG investing; emerging markets; multilateral development banks; blended finance; infrastructure investment; development finance institutions; asset owners; impact investment;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F3 - International Economics - - International Finance
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G2 - Financial Economics - - Financial Institutions and Services
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • L9 - Industrial Organization - - Industry Studies: Transportation and Utilities
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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