National development banks in a comparative perspective

A feature characteristic of countries that were late industrializers was their reliance on financial institutions geared to the task of financing capital-intensive investments with direct and indirect support from the State. While in Germany the universal banks served this purpose in the 19th century, developing late industrializers after the Second World War established specialized development banking institutions to play this role, as well as reach credit to sections that were otherwise excluded from the banking network. Despite differences in the evolution of the development banking infrastructure across these countries, there are striking similarities in terms of what they were mandated to do and how they were financed. However, with the turn to financial liberalization, the transformation of development banking across countries has been very different, with seemingly significant consequences.

Related Subject(s): Economic and Social Development