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Financial Additionality of Multilateral Development Banks in Private Participation in Infrastructure Projects

Graduate School of Humanities and Social Sciences, Saitama University, Saitama 338-8570, Japan
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Academic Editor: Donato Morea
Sustainability 2021, 13(15), 8412; https://doi.org/10.3390/su13158412
Received: 30 June 2021 / Revised: 17 July 2021 / Accepted: 23 July 2021 / Published: 28 July 2021
(This article belongs to the Section Economic and Business Aspects of Sustainability)
This paper aims to provide empirical evidence for demonstrating financial additionality of multilateral development banks (MDBs) in private participation in infrastructure (PPI) projects in terms of financing beyond what is available in the markets. To verify MDB financial additionality, this study examines whether the PPI projects with multilateral support have significantly larger investment commitments than the total average projects by using the PPI database of the World Bank for 1996–2020. The empirical analysis identifies MDB financial additionality, in that the larger investment commitments of multilateral-supported projects beyond the average are confirmed in any income levels and regions in host countries and any sectors and types in the projects. In particular, MDB financial additionality is valid even in low-income countries where private finance is still too premature to be available. In the host countries where their government effectiveness is in the poorest edge, however, MDB financial additionality loses its significance, thereby requiring the governance enhancement and capacity building in the host countries and innovative blended finance instruments for its additionality to work. View Full-Text
Keywords: financial additionality; multilateral development banks; private participation in infrastructure; investment commitments; government effectiveness financial additionality; multilateral development banks; private participation in infrastructure; investment commitments; government effectiveness
MDPI and ACS Style

Taguchi, H.; Yasumura, K. Financial Additionality of Multilateral Development Banks in Private Participation in Infrastructure Projects. Sustainability 2021, 13, 8412. https://doi.org/10.3390/su13158412

AMA Style

Taguchi H, Yasumura K. Financial Additionality of Multilateral Development Banks in Private Participation in Infrastructure Projects. Sustainability. 2021; 13(15):8412. https://doi.org/10.3390/su13158412

Chicago/Turabian Style

Taguchi, Hiroyuki, and Kota Yasumura. 2021. "Financial Additionality of Multilateral Development Banks in Private Participation in Infrastructure Projects" Sustainability 13, no. 15: 8412. https://doi.org/10.3390/su13158412

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