The political economy of multilateral lending to European regions

Artikel

We study the political economy of allocation decisions within a major state investment bank. Our focus is the European Investment Bank (EIB) – “The Bank of the EU” – which is the largest multilateral lending (and borrowing) institution in the world. We study the behavior of about 500 national representatives at the EIB’s Board of Directors – the bank’s decisive body for loan approvals – and show that a representative’s appointment increases the probability that the sub-national region where she works receives a loan by about 17 percentage points. This “home-bias” effect is driven by large loans financing infrastructure projects. We discuss several pieces of evidence, which are consistent with the hypothesis that this home-bias lending may be due to favoritism, however, we cannot conclusively demonstrate this case of resource misallocation.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: The Review of International Organizations ; ISSN: 1559-744X ; Volume: 15 ; Year: 2020 ; Issue: 3 ; Pages: 707-740 ; New York, NY: Springer US

Classification and Topics

• Classification: Politik ; Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior ; International Agreements and Observance; International Organizations
• Subject: Political economy of international organizations ; Regional favoritism ; European Investment Bank ; European Union

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Asatryan, Zareh ; Havlik, Annika
• Event: Veröffentlichung
• (who): Springer US
• (where): New York, NY
• (when): 2020

Further information

• DOI: doi:10.1007/s11558-020-09385-y
• Last update: 10.03.2025, 11:43 AM CET