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Mission-oriented development banks: the case of KfW and BNDES

Mazzucato, Mariana; Macfarlane, Laurie; (2023) Mission-oriented development banks: the case of KfW and BNDES. (Working Paper Series: IIPP WP 2023-13 13). UCL Institute for Innovation and Public Purpose (IIPP): London, UK. Green open access

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Abstract

There is an urgent need for channelling long-term finance towards addressing major social, environmental, and economic challenges. The paper argues that state investment banks (SIBs) can play a crucial role in mobilizing the needed capital, and that they can most effectively do so when structured and governed to play a ‘mission-oriented’ role. We provide an empirical account of two SIBs that have played an active mission-oriented role in their respective economies: Germany’s KfW and Brazil’s BNDES. We reflect on these empirical findings and identify key institutional characteristics that have enabled them to play this role, including challenge-led mandates, use of progressive conditionalities, stable sources of finance, diverse in-house expertise, and robust governance structures. The paper concludes with a discussion on how mission-oriented SIBs can be complemented by wider reforms to the global financial system.

Type: Working / discussion paper
Title: Mission-oriented development banks: the case of KfW and BNDES
Open access status: An open access version is available from UCL Discovery
Publisher version: https://www.ucl.ac.uk/bartlett/public-purpose/wp20...
Language: English
Additional information: This version is the version of record. For information on re-use, please refer to the publisher's terms and conditions.
Keywords: State investment banks, green finance, patient finance, mission-oriented policy, innovation
UCL classification: UCL
UCL > Provost and Vice Provost Offices > UCL BEAMS
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment > Inst for Innovation and Public Purpose
URI: https://discovery-pp.ucl.ac.uk/id/eprint/10196217
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