The Reinvention of Development Banking in the European Union: Industrial Policy in the Single Market and the Emergence of a Field

National development banks (NDBs) have transformed from outdated relics of national industrial policy to central pillars of the European Union's economic project. This trend, which accelerated after the Financial Crisis of 2007, has led to a proliferation of NDBs with an expanded size and scope. However, it is surprising that the EU -- which has championed market-oriented governance and strict competition policy -- has actually advocated for an expansion of NDBs. This book therefore asks, Why has the EU supported an increased role for NDBs, and how can we understand the dynamics between NDBs and European incentives and constraints? To answer these questions, the contributing authors analyze the formation and evolution of a field of development banking within the EU, identifying a new field around an innovative conceptualization of state-backed financing for the purposes of policy implementation. Yet rather than focusing solely on national development banks, the authors instead broaden the focus to the entire ecosystem of the field of development banking, which includes political institutions (both in Brussels and in the member states), financing vehicles (such as the Juncker Plan), regulatory bodies (Directorate-General for Competition, Directorate-General for Economic and Financial Affairs), and commercial actors. Seven in-depth case studies on European NDBs, along with three chapters on European-level actors, detail this field of development banking, and answer the questions of when, where, and how development banking occurs within the EU.

About the Author

Daniel Mertens is Professor of International Political Economy at the University of Osnabrück. Prior to that, he was an assistant professor at Goethe University Frankfurt and a visiting scholar at Northwestern University. His work ranges from the politics of credit markets and banking to analyses of the modern tax state. Matthias Thiemann is an assistant professor for European Public Policy at Sciences Po. His work focuses on the reconfiguration of financial markets after the 2007-8 crisis, with a particular focus on shadow banking, macro-prudential regulation, and the role of development banks in stabilizing financial markets. Peter Volberding recently graduated with a PhD from the Government Department at Harvard University. His dissertation focused on the interaction between development banks, private financial markets, and development financial instruments.