Center for Global Development | Fri, May 21, 2021
by Nancy Lee and Rakan Aboneaaj
The world is now more than a year into the second global crisis of the century. Both the current pandemic and the Global Financial Crisis (GFC) more than 10 years ago tested the capacity of international financial institutions to respond with speed and scale. This time, the IMF has stepped up, first with emergency finance facilities, and later this year with a massive injection of global liquidity through a Special Drawing Rights (SDR) allocation of $650 billion.
But what about the multilateral development banks (MDBs)? One of their central roles is to expand the fiscal space of middle- and low-income countries (MICs and LICs) for development spending, exactly what is needed now, and to catalyze finance from the private sector, especially when private finance pulls back. Have they done so? As the 2020 data on MDB finance become available, what can we conclude about how MDBs are performing when the developing world needs them most?