The third ownership category is banks owned by local governments. This can be any subnational political division of a country and/or decentralized government entity. The designation of such subnational entities may vary according to the territorial administrative structure of each country, e.g., states, regions, provinces, or cities. This category is probably the most unknown to the international financial community. Even though there are 111 such institutions—amounting to 21% of the total, a very significant figure—, they are usually quite small and have virtually no visibility in the international arena. Indeed, being subnationals, they have little legitimacy to participate in international debates. 3.1.2. Geographical region of owners In this subsection, we identify the geographical regions of PDBs and DFIs’ owners. Here we adopt the classification of geographical regions by the Statistics Division of the United Nations (UN). These geographical regions are based on continental regions, which are further subdivided into subregions and intermediary regions, drawn up so as to obtain greater homogeneity in population sizes, demographic circumstances, and so on. 7 To reveal the diversity, we further classify the geographical regions of PDBs and DFIs according to the three categories mentioned above, namely, multinational, national, and subnational. Regarding multinational PDBs and DFIs, if a PDB or DFI is owned by more than two countries dispersed in different geographical regions, we classify it as “world”; if its membership structure is deliberately divided into distinctive categories such as regional and nonregional members, and regional members enjoy the majority shareholding of more than 50%, we classify it as “regional” or “subregional.” In terms of subnational or national PDBs and DFIs, if their majority shareholders are from public or private entities of a specific country, we put them into the region or subregion where their countries are located. As shown in Table 1, regarding multinational PDBs and DFIs, 5 (11%) are classified as “world,” that is, their member states come from different regions. They include both established ones such as the World Bank (IBRD and IDA), the IFC and the MIGA from the World Bank Group, and the International Fund for Agricultural Development, and recent multilateral initiatives such as the New Development Bank. A vast majority (89%) of multinational PDBs and DFIs are primarily owned by member states from a particular region or subregion. At the regional level, apart from Oceania, most regions have their own regional development banks (RDBs), including the African Development Bank in Africa, the Asian Development Bank and the Asian Infrastructure Inve stment Bank in Asia, the European Investment Bank and the European Bank for Reconstruction and Development in Europe, and the Inter-American Development Bank in the Americas. In terms of the number of subregional development banks, Western Asia, Eastern Europe, and Eastern Africa make up the top three, with 7, 5, and 4 currently active multinational PDBs and DFIs respectively.
For further information on the UN’s classification of geographical regions, see https://unstats.un.org/unsd/methodology/m49/. 7
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