ABSTRACT
Sub-regional development banks (SRDBs) are poised to advance regionalism as a more effective tool for development financing (Birdsall and Rojas-Suarez 2004) given their restricted regional membership and localized expertise, in addition to the opportunity to learn from decades of experience from the World Bank and larger regional development banks (RDBs) operating in their geographical area. However, they also face obstacles such as low levels of capital; an overreliance on capital subscriptions from member states for operations; access to technical expertise; obscurity within their region; and crowding out by larger development institutions. SRDBs are a heterogeneous group of development institutions sometimes operating in partnership with RDBs and the World Bank, as is the case with the Caribbean Development Bank (CDB). They also provide ‘non-traditional’ forms of assistance that target specific regional needs – a void left by larger development institutions. For example, the Pacific Islands Development Bank (PIDB) makes residential loans alongside more traditional commercial development loans issued by most multilateral development banks (MDBs). Most SRDBs have small portfolios as compared to larger institutions while others, such as the Development Bank of Latin America (CAF) have surpassed World Bank and RDB lending in the region as well as in particular sectors (Beattie 2014; Humphrey 2014). Recently, scholars have turned to identifying how differences in specific dimensions and aspects of legitimacy can manifest themselves in policies and output of SRDBs compared to the MDBs (Humphrey 2014).
