VOL. 3, NO. 2, PGS. 17–30


Development Banks
Scope and Limitations
Victor Manuel Isidro Luna

Victor Manuel Isidro Luna is a Professor at the Faculty of Economics of the National Autonomous University of Mexico and the National Polytechnic Institute.

This translation has been automatically generated and has not been verified for accuracy.

Development banks —such as community banks, national development banks and multilateral banks— can drive economic growth and subsequently human development by taking advantage of local, national and global specificities of the moment. Each development bank, as Joseph Kane rightly pointed out1 , is, in a sense, unique, as it depends on its economic and social context.

Development banks can carry out large infrastructure projects, boost basic sectors of the economy (such as agriculture), provide credit to the poorest and other vulnerable groups, and generally act in times of economic crisis. It is for this reason that development banks will be seen as an indispensable tool for the growth and welfare of the population. However, there are also those who argue that sometimes the money provided by these banks has no tangible effect on boosting the real sectors of the economy. Others point out that development banks are often used by politicians to provide resources to their supporters, making the objective of economic development of a locality, region or country a secondary objective. For both of the above reasons, it is argued, development banks should be subservient to the private sector and the market economy and should not be left to the discretion of politicians.

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