Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/288857 
Year of Publication: 
2020
Citation: 
[Journal:] The Review of International Organizations [ISSN:] 1559-744X [Volume:] 15 [Issue:] 3 [Publisher:] Springer US [Place:] New York, NY [Year:] 2020 [Pages:] 707-740
Publisher: 
Springer US, New York, NY
Abstract: 
We study the political economy of allocation decisions within a major state investment bank. Our focus is the European Investment Bank (EIB) – “The Bank of the EU” – which is the largest multilateral lending (and borrowing) institution in the world. We study the behavior of about 500 national representatives at the EIB’s Board of Directors – the bank’s decisive body for loan approvals – and show that a representative’s appointment increases the probability that the sub-national region where she works receives a loan by about 17 percentage points. This “home-bias” effect is driven by large loans financing infrastructure projects. We discuss several pieces of evidence, which are consistent with the hypothesis that this home-bias lending may be due to favoritism, however, we cannot conclusively demonstrate this case of resource misallocation.
Subjects: 
Political economy of international organizations
Regional favoritism
European Investment Bank
European Union
JEL: 
D72
F53
G2
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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