The Evolution of the Multilateral Development Banks

Abstract

This paper traces the evolution of the MDB ‘system’ over the past half-century. It highlights the importance of the original model — the World Bank — whose success, and weaknesses, led to the replication of the model through the creation of the Regional Development Banks (RDBs). The RDBs initially sought to differentiate their lending policy from that of the World Bank, but a broad convergence has occurred over the decades. While the World Bank’s pre-eminence in this system has remained mostly unchanged, the model itself has seen major changes, partly the consequence of the introduction of concessional funds and partly as a reaction to changes in the global economy.