Multilateral development banks, new developmentalism and local currency financing

Vol. 39 No. 4 (2019)

Oct-Dec / 2019
Published October 1, 2019
PDF-English
PDF-English

How to Cite

Bresser-Pereira, Luiz Carlos, and Cinthia Bechelaine. 2019. “Multilateral Development Banks, New Developmentalism and Local Currency Financing”. Brazilian Journal of Political Economy 39 (4), 755-67. https://doi.org/10.1590/0101-31572019-2980.

Multilateral development banks, new developmentalism and local currency financing

Luiz Carlos Bresser-Pereira
Professor emérito da Fundação Getúlio Vargas, São Paulo/SP, Brasil.
Cinthia Bechelaine
Doutoranda de Administração Pública e Governo, Escola de Administração de Empresas de São Paulo – Fundação Getúlio Vargas – EAESP-FGV, São Paulo, SP, Brasil.
Brazilian Journal of Political Economy, Vol. 39 No. 4 (2019), Oct-Dec / 2019, Pages 755-767

Abstract

Multilateral Development Banks (MDBs) are designed to finance investments that promote global economic and social development. The objective of this paper is to discuss a key component in meeting the demand for investment in developing countries, namely the ability of MDBs to provide loans in local rather than foreign currency. To explain how these institutions fulfill this purpose, we distinguish "traditional" from "new" MDBs, discuss the problems generated from foreign currency indebtedness, and explore a way out, or an alternative explanation, based on New Developmentalism theory and the challenge of local currency financing.

JEL Classification: F3; F4; G2; O2.


Keywords: Multilateral development banks, new developmentalism, financing; currency policies