Leveraging Financial Markets for Development
Description
This book investigates how development institutions created and promoted marketized development financial instruments to increase the speed and scope of assistance by leveraging private financial markets for development objectives. To attract private investors, donor governments agreed to bear the risk in these new instruments in order to mobilize investment during times of political crisis. In particular, this book contends that Germany's KfW played an outsized role in the development of these new financial instruments, particularly in microfinance banks and structured funds, as KfW's unique institutional attributes and strong political support from the German government at critical junctures fostered financial innovation. Using over 70 interviews and a cache of newly released archival materials, this books documents how KfW and other development institutions created and promoted these marketized development financial instruments, and how they have become a pillar of modern development policy.
Reviews / Votes
"This is an excellent book on an increasingly important topic. Peter Volberding carefully analyzes how development institutions spearheaded the creation, development, and expansion of marketized development financial instruments to attract private funds, and how German KfW was central in this evolution. He studies how development banks did this task, and evaluates rigorously the advantages, but also the many limitations and challenges of these marketized development financial instruments. A very valuable book for academics, students, and policy-makers."
- Stephany Griffith-Jones , Professor, Columbia University, USA
"Peter Volberding addresses a long-standing issue of delivering effective financing for sustainable economic development. He does not simply provide the origin, evolution and challenges of marketized development financial instruments, he goes beyond! He has a vision of the kind of development finance many institutions should follow and gratefullyacknowledges that the maturation of marketized development financial instruments follow a learning process in which some interventions failed while others succeeded."- Désiré Kanga , Centre for Global Finance, SOAS University of London, UK
"Peter Volberding's Leveraging Financial Markets for Development explains how development finance shifted from and aid approach to the discipline of the market. His engaging account documents the actors and institutions-notably, the German state-owned KfW-that made this revolutionary change possible."
- Beth Simmons , Professor, University of Pennsylvania, USA
"In this book, Dr. Volberding provides a historical genealogy of the spread of developmental financial instruments, focusing on a surprising key actor: the German KfW and its first successful engagements with these funds. Rather than private actors or the World Bank, he shows based on extensive interviews and careful archival research that this national financing department was one of the crucial actors in the rise and diffusion of these instruments, complicating simple stories of capture."
- Matthias Thiemann , Sciences Po-Paris, France
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Person
Peter Volberding received his PhD from the Government Department at Harvard University, USA. His research focuses on the intersection between public institutions and private financial markets, and is co-author of a forthcoming edited volume on European development banking. He currently lives and works as a consultant in New York City.
Content
Chapter 1. The Marketization of Development Finance.- Chapter 2. 1950-1970: The World Bank, DFCs, and the Foundations of Private Investment Mobilization.- Chapter 3. 1970 to 1990: Development Finance in Crisis and the Search for a New Paradigm.- Chapter 4. KfW and the Early Stages of Marketized Development Financial Instruments. Chapter 5. Chapter 5: The Maturation of Marketized Development Financial Instruments: Microfinance and Structured Funds.- Chapter 6. The Scaling-Up of Marketized Development Financial Instruments from 2005 to 2017.- Chapter 7. Conclusion and Future Directions.