Regional Development Banks and the promotion of Public-Private Partnerships: the EIB as a case study

Most Regional Development Banks in the world have engaged in the increased promotion and use of Public Private Partnerships (PPPs). To explain this rapid and ubiquitous spread of Public Private Partnership promotion and use, this chapter argues that Regional Development Banks can be seen to have acted as agents engaged in slippage. Most—if not all—of their shareholding national governments and loan recipient countries had limited or no prior experience with and knowledge of PPP financing. This activism on the part of Regional Development Banks can also be seen in both Multilateral Development Bank and National Development Bank promotion of PPPs and reinforces wider claims in the literature. More generally, Gavin and Rodrik (1995) argue that International Financial Institutions (IFIs) bolster their long-acquired skills in technical and information expertise in order to remain relevant—a claim that this chapter explores with regard to PPPs in particular. The promotion of PPPs should also be seen in terms of Regional Development Banks operating as agents to move beyond the correction of market failure towards the creation and/or shaping of markets through a particular financing mechanism and with specific market actors (Mazzucato and Penna 2016: 305).