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Fiscal policy and net capital inflows in developing countries are procyclical. A large amount of literature has examined this phenomenon and explored its consequences for aggregate fluctuations. Multilateral development banks (MDBs) are an important source of external finance for governments and play a key role in financing the execution of fiscal policy. Hence, understanding the behavior of MDB flows is key to gauge their contribution to macroeconomic volatility. This paper investigates the co-movement of sovereign lending from MDBs and private creditors with government expenditure, and finds that multilateral sovereign lending follows government expenditure, and that this correlation does not change if the government is running a surplus or a deficit. This finding raises doubts on the feasibility of MDBs to be counter-cyclical, unless the governments themselves implement counter-cyclical fiscal policies.

Empowering women and enhancing children’s early development are two important goals that are often pursued via independent policy initiatives in developing countries. In this paper we study a unique approach that pursues both goals at the same time: empowering mothers through tools that also advance their children’s development. A program operated by AVSI, an Italian NGO, in a poor neighborhood of Quito, Ecuador, targets parents of children from birth to age 5. It provides family advisor-guided parent training sessions once every two weeks for groups of six to eight mothers and their children. We find that the program empowered women in various dimensions, including higher labor force participation and employment, higher likelihood of a full-time job in the formal-sector and higher wages. Treated mothers are also more likely to continue their education, make independent decisions regarding their own finances, have greater role in intra-household decisions, especially on issues involving children’s education and discipline and increase parental inputs into their children’s development. We find that treated children improve their cognitive and non-cognitive skills, for example, they are less likely to repeat a grade or temporarily drop-out from schooling, are less absent from and have improved behaviors in school, have better attitudes towards learning, and achieve higher scores on cognitive tests. Applying a recently suggested factor model of children's relative non-cognitive skills reaffirms our finding of significant gains in children non-cognitive skills. All results hold when we estimate aggregate treatment impacts, use summary indices instead of individual outcomes in order to account for multiple inference, when we use entropy balancing to adjust for differences in pre-treatment covariates, and when we use other robustness checks.

This study uses loan-level data on syndicated lending to a large sample of developing countries between 1993 and 2017 to estimate the mobilization effects of multilateral development banks (MDBs), that is, their ability to crowd-in capital from private creditors. Controlling for a large set of fixed effects, the paper shows evidence of positive and significant mobilization effects of multilateral lending on the size of bank inflows. The number of lenders and the average maturity of syndicated loans also increase. These effects are present not only on impact but last for up to three years and are not offset by a decline in bond financing. There is no evidence of anticipation effects, and the results are robust to numerous tests controlling for the role of confounding factors and unobserved heterogeneity. Finally, the results are economically sizable, indicating that MDBs can mobilize about seven dollars in bank credit over a three-year period for each dollar invested.

Theory suggests both resilience and fragility in banking networks. This paper finds both, exploiting a new database of cross-border syndicated lending to developing countries from 1993 to 2017. Shocks propagate via co-lenders driven by central players, but shocks impacting fringe banks have little impact. The global financial crisis and the appearance of South-South lenders prompted a decline in network centrality, suggesting greater resilience to normal shocks. Multilateral Development Banks may play a catalytic role, but their small size limits their ability to mitigate shock propagation. The ongoing Covid-19 crisis is not a normal shock, is hitting central players and will likely provoke significant contagion.

This study uses loan-level data on syndicated lending to a large sample of developing countries between 1993 and 2017 to estimate the mobilization effects of multilateral development banks (MDBs), that is, their ability to crowd-in capital from private creditors. Controlling for a large set of fixed effects, the paper shows evidence of positive and significant mobilization effects of multilateral lending on the size of bank inflows. The number of lenders and the average maturity of syndicated loans also increase. These effects are present not only on impact but last for up to three years and are not offset by a decline in bond financing. There is no evidence of anticipation effects, and the results are robust to numerous tests controlling for the role of confounding factors and unobserved heterogeneity. Finally, the results are economically sizable, indicating that MDBs can mobilize about seven dollars in bank credit over a three-year period for each dollar invested.

Fiscal policy is procyclical in developing countries. An ample literature has explained this fact and explored its consequences for aggregate cyclical fluctuations. Multilateral Development Banks (MDBs) are an important source of finance for governments and therefore play a role in the execution of fiscal policy. In this paper, we assess whether MDB disbursements to the sovereign commove with government expenditure and with private sovereign lending, during different stances of fiscal policy and during fiscal crises. We find that multilateral lending to the sovereign is correlated with government expenditure and this correlation does not change if the government is running a surplus or a deficit. However, when the sovereign is having a fiscal crisis associated with unsustainable fiscal policy, this relationship disappears for Regional Development Banks (RDBs) and the World Bank (WB). Finally, we find evidence of synchronization between MDBs and IMF during fiscal crises.

We use loan-level data on syndicated lending to a large sample of developing countries between 1993 and 2017 to estimate the mobilization effects of multilateral development banks (MDBs), controlling for a large set of fixed effects. We find evidence of positive and significant direct and indirect mobilization effects of multilateral lending on the number of deals and on the total size of bank inflows. The number of lending banks and the average maturity of syndicated loans also increase after MDB lending. These effects are present not only on impact, but they last up to three years and are not offset by a decline in bond financing. There is no evidence of anticipation effects and the results are not driven by confounding factors, such as the presence of large global banks, Chinese lending and aid flows. Finally, the economic effects are sizable, suggesting that MBDs can play a vital role to mobilize private sector financing to achieve the goals of the 2030 Development Agenda.