This week the Center for Global Development will convene a high level panel to consider the future of multilateral development banking. Co-chaired by Montek Ahluwalia, Arminio Fraga, and Lawrence Summers, the panel is comprised of members from Africa, Asia, Europe, Latin America, and the United States, all of them distinguished by their experience and leadership on international development and finance issues in the public and private sectors and in academia.
The panel meets at a time of resurgence for multilateral development banks (MDBs), something that few might have predicted just five years ago. Even as the MDBs were lending aggressively into the global financial crisis, much of the language from their major shareholders was tempered in restraint when it came to future directions. For example, the World Bank’s shareholders agreed to provide an infusion of capital to the institution in 2010, but just enough to ensure a smooth downward glide path from the institution’s elevated crisis lending.
What a difference a few years makes. Today, the talk around MDBs is one of renewed ambition, with new institutions coming online and existing ones exploring expanded activities on various fronts. Discussion of capital increases, once anathema to key shareholders, has become more common.
Our group will explore the future for these institutions during this unsettled period. Is the new ambition merited? If so, how can it best be channeled to productive and effective development purposes? Are there compelling new missions and mandates awaiting the MDBs that would take them beyond traditional conceptions of their development agendas? How can governance of the MDBs evolve in a more constructive way to ensure the institutions’ legitimacy and effectiveness globally?
Questions like these will likely animate the panel’s discussions this week. As the project’s co-directors, Nancy Birdsall and I have spent the summer engaging one-on-one with the panelists, and we have both been struck by the enthusiasm, creativity, and expertise they are bringing to the initiative. So stay tuned for more on the panel’s work, which will culminate in a report in early 2016.