CAN NATIONAL DEVELOPMENT BANKS AND BLENDED FINANCE LEAD US TO A SUSTAINABLE FUTURE? LIMITS AND POSSIBILITIES OF MARKET-LED AND STATE-LED FINANCE
DOI:
https://doi.org/10.61673/ren.2025.3290Palavras-chave:
Sustainable Development Goals, Local knowledge, Financing, Climate, Millennium GoalsResumo
This article examines whether national development banks (NDBs) and blended finance can effectively mobilize the resources required to achieve the Sustainable Development Goals (SDGs) and address climate change. It situates contemporary financing strategies within a historical framework that contrasts market-led approaches, dominant in the Global North, with state-led models rooted in the Global South. The failure to meet the Millennium Development Goals stemmed from structural deficiencies in global financial systems, including insufficient coordination, the destabilizing effects of the 2008 financial crisis, and constrained fiscal capacity among nation-states. Blended finance, promoted as a mechanism to leverage private capital, is found to be insufficient in scale and biased toward less risky, higher-income contexts. NDBs, while capable of supporting long-term and countercyclical investment, face limitations related to governance quality, fiscal space, and political resistance. The study concludes that neither approach alone offers a comprehensive solution. Instead, it proposes a reorientation toward bottom-up, community-based financial mechanisms that integrate local knowledge and democratic participation, alongside institutional reforms. Sustainable development financing, therefore, requires a systemic transformation that bridges global, national, and local dynamics.
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