The Managerial Elite of Development Banks

Cornel Ban, Shanuki Tillekeratne

Research output: Working paperResearch

Abstract

A rich recent literature highlights the importance of development banks for capitalist diversity in rich and developing countries alike (Ban 2013; Hochstetler and Montero 2013; Griffith-Jones and Ocampo 2018; Merstens and Thiemann 2019). This literature merges the structuralist tradition in development studies (Wade 1990; Woo-Cummings 1998; Chibber 2002; Wong 2004; Wylde 2016) and the political economy of development (Thurbon 2016; Kim and Thurbon 2015; Ban 2013; Hochstetler and Montero 2013; Lazzarini et al 2015; Mazzucato 2015; Griffith-Jones and Ocampo 2018) to look for analytical leverage outside the realm of conventional public financial institutions and a long-overlooked twin role of the banker state: investor in socially cohesive industrial competitiveness and provider of countercyclical finance (Trabacchi et al 2015; Mazzucato and Penna 2016; Gallagher and Yuan 2017; Brei and Schclarek 2017).
Indeed, it is a fact that the world’s most powerful industrial exporters have development banks (government-sponsored financial institutions concerned primarily with the provision of long-term
capital to industry) owning between a fourth and a third of the total liabilities of national financial systems (Griffith-Jones and Ocampo 2018). These banks’ countercyclical lending also works as the
quasi-fiscal arm of the bogie state by running off balance sheet stimulus programs in the form of increased lending volumes in times of recession (Griffith Jones et al 2008; and Cozzi 2016; Ocampo
2011; Ban 2013), when private banks typically tighten their purses. Along with regional monetary funds and regional multilateral development banks, national development banks are critical players in the global governance of economic cycles (Kring and Gallagher 2015).
Since Peter Evans (1995) foundational work, much of the existing research on development banks in East Asia and Latin America specifies how the embedded autonomy of these institutions into the market works, as well as the mindsets that support them (most recently Thurbon 2016). However, missing from this research is a systematic appraisal of the embedded autonomy of all significant development banks in the world. Are there revolving doors between the private sector and international bureaucracies such as the top management of national development banks? Are these elites predominantly national in terms of their professional background, or are they cosmopolitan?
By answering these simple descriptive questions, we hope to enable future scholarship to launch structured comparisons across cases and generate hypotheses about what explains variation across these cases. In terms of policy importance, the research note is of relevance for those exploring the organizational opportunities and constraints of the investment state through well-designed, large-scale and properly governed public investment regimes.
Original languageEnglish
Place of PublicationBoston
PublisherThe Frederick S. Pardee School of Global Studies, Boston University
Number of pages12
Publication statusPublished - Apr 2019
SeriesGEGI Working Paper
Number28

Cite this

Ban, C., & Tillekeratne, S. (2019). The Managerial Elite of Development Banks. Boston: The Frederick S. Pardee School of Global Studies, Boston University. GEGI Working Paper, No. 28