Sustainable Banking: The Role of Multilateral Development Banks as Norm Entrepreneurs

Alvaro Mendez () and David Patrick Houghton
Additional contact information
David Patrick Houghton: National Security Affairs, U.S. Naval War College, Newport, RI 02481-1207, USA

Sustainability, 2020, vol. 12, issue 3, 1-21

Abstract: This article explores the role of multilateral development banks (MDBs) in originating norms of sustainable banking that have attracted and supported green private finance, a role not widely known in the management literature. Any prospect of achieving the United Nations (UN) Sustainable Development Goals by 2030 presupposes mobilizing the estimated US$23.3 trillion currently locked-up in risk-averse private savings to bridge the gap between developing countries’ demand for capital and the current global financial architecture’s capacity to supply it. The three biggest obstacles to sustainable banking identified by the authors are discussed: (1) The uncertain bankability of projects; (2) non-transparency in tracking sustainable capital flows; and (3) no universal mechanism capable of making matches between green investment supply and demand; and what MDBs have actually done to overcome these roadblocks, and might do in future, is also discussed. Seen through the lens of “applied constructivism”, MDBs are revealed to be norm entrepreneurs proactive since at least the 1970s in socially constructing most of the basic norms and practices of sustainable banking which the private sector relies on or is now striving to take up. MDBs are typically the first “port of call” for international governmental organizations (IGOs) and civil society organizations wishing to establish a sustainable financial framework for development; and are the likeliest political agents to pioneer sustainable banking in future. MDBs would do well to develop an awareness of the methods of Constructivism, which they have actually been unwittingly using, to empower themselves to meet the challenges of the 21st century.

Keywords: sustainable banking; multilateral development banks (MDBs); norm entrepreneurs; constructivism; sustainable development goals (SDGs); international development; commercial banks (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
https://www.mdpi.com/2071-1050/12/3/972/pdf (application/pdf)
https://www.mdpi.com/2071-1050/12/3/972/ (text/html)

Related works:
Working Paper: Sustainable banking: the role of multilateral development banks as norm entrepreneurs (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:12:y:2020:i:3:p:972-:d:314134

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().