How to ramp up MDB capacity after the Covid crisis
In a paper for the Overseas Development Institute, NADEL’s Chris Humphrey assesses the option of creating a new, non-voting share class for institutional investors to help boost the lending capacity of multilateral development banks (MDBs).
As the world’s attention turns towards building back from the Covid crisis, the question of how to scale up financing from the MDBs is on the minds of many. Obtaining new MDB capital from shareholders is politically fraught, while efforts to mobilise private finance face numerous obstacles. One innovation not yet considered by the World Bank and major regional MDBs would be to create a new, non-voting share class for institutional investors. Such a reform would give a substantial boost to MDB lending capacity. In a paper for the Overseas Development Institute, Chris Humphrey makes a preliminary assessment of the viability of creating a new MDB share class for investors. Given what’s at stake in rebuilding the world economy post-Covid, it’s an option worth putting on the table.