Regional Public Goods: The Comparative Edge of Regional Development Banks

While, undoubtedly, there are some development challenges that need to be tackled globally, it must be recognized that many Financing for Development issues are more effectively dealt with at the regional level. An example of this is the provision of public goods and services needed for development that are not provided by the market or by national governments in the absence of external assistance—regional health programs to contain endemic diseases, coordination of transport infrastructure among neighboring countries, regional energy cooperation, and financial regulation to limit cross-border contagion, to name but some of the challenges in point. The Regional Development Banks (RDBs) have a central role to play in the provision of these “regional public goods” (RPGs). However, this role, the mechanisms and constraints under which it operates, its relationship to country-focussed assistance, and the challenge of financing RPGs, have not received much attention in the past. This paper attempts to fill the gap by examining these issues in the context of the broader on-going debate about cross-border public goods in international assistance.