Rolling Out the Wall Street Consensus? Multilateral Development Banks and the Trilemma of Private Capital Mobilization

This article examines the role of multilateral development banks (MDBs) in implementation the Wall Street Consensus (WSC), a financialized approach that seeks to leverage billions of public resources to mobilize trillions in private finance, for achieving the Sustainable Development Goals in low- and mid-dle-income countries. We argue that, despite the strategic pivot towards blended finance, MDBs have struggled to scale private capital mobilization, constrained by a trilemma: maximizing investment flows, derisking private finance, and preserving their traditional business model. Our analysis, based on a thematic content analysis of MDB documents and expert interviews, reveals a lack of support among MDB shareholders and policy experts to the notion of shifting away from their traditional “originate-and-hold” lending model towards an “originate-to-distribute” model of portfolio derisking. Rather, the momentum has recently shifted towards proposals that seek to leverage and/or strengthen the traditional MDB business model.