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The New Development Bank and the ecological transition: Decoupling development finance from core currency hegemony?

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  • Godinho, Enzo
  • Mattos, Beatriz

Abstract

This paper investigates the role of the New Development Bank (NDB) in challenging global financial hierarchies while fostering an ecological transition. The NDB, established by BRICS, has a mechanism of providing development finance in local currency, which could reduce dependency on core currencies like the dollar (USD) and the euro (EUR), offering an alternative for peripheral economies to finance sustainable development. Given the institutionalization of the green economy agenda and the rise of green finance, the paper raises elements to assess the NDB's contribution to the ecological transition through its investment strategy. Our analysis builds on structuralist and dependency theories, identifying three interlinked hierarchies - productive, currency, and environmental - that shape global financial asymmetries. We examine the NDB's project portfolio from 2016 to 2024 and the interplay between the projects' area of operation, currency of funding, and country of implementation. The findings indicate that, while the NDB has made strides in funding sustainable infrastructure, its operations remain largely embedded within dominant currency systems.

Suggested Citation

  • Godinho, Enzo & Mattos, Beatriz, 2025. "The New Development Bank and the ecological transition: Decoupling development finance from core currency hegemony?," IPE Working Papers 260/2025, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    • Handle: RePEc:zbw:ipewps:324644
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    References listed on IDEAS

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    1. Bonizzi, Bruno & Kaltenbrunner, Annina & Powell, Jeffrey, 2019. "Subordinate financialization in emerging capitalist economies," Greenwich Papers in Political Economy 23044, University of Greenwich, Greenwich Political Economy Research Centre.
    2. Bruno Bonizzi & Annina Kaltenbrunner & Jeff Powell, 2022. "Financialised capitalism and the subordination of emerging capitalist economies," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 46(4), pages 651-678.
    3. Jeffrey Althouse & Romain Svartzman, 2022. "Bringing subordinated financialisation down to earth: the political ecology of finance-dominated capitalism," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 46(4), pages 679-702.
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    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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