Can Latin America’s Development Banks Be Fixed? by Rodrigo Zeidan and Irineu E. C. Filho published by Americas Quarterly (7/2017).
“Scandals and corruption investigations unfolding in Latin America have given development banks a terrible reputation: They stand accused of feeding crony capitalism, transferring resources from taxpayers to undeserving billionaires, and making lending decisions that misallocate capital at the whims of bureaucratic planners who do not necessarily know best.
Should we just close them, implode their buildings and salt the land where they stand? We’d argue for a more moderate route: Development banks can create value to society, as long as they tackle market failures, fall within the budgetary process and have good governance structures.
Let’s start by examining the conditions under which development banks are useful, and then look at what institutional improvements are needed to ensure they are not misused in Latin America…”
