From Global Savings Glut to Financing Infrastructure

Rabah Arezki, Patrick Bolton, Sanjay Peters, Frederic Samama, and Joseph Stiglitz


This paper proposes an institutional solution that can help unlock the flow of low yielding longterm savings towards high-return infrastructure investments. The solution is to transform public-private partnerships in infrastructure and the classic model of multilateral development banks. Instead of thinking of public-private partnerships as bilateral contracts between a private concession operator and a government agency, we argue that they should be conceived as partnerships that also involve a development bank and long-term institutional investors as partners. We propose a new model for development banks, which is to transform themselves into originate-and-distribute banks for PPP infrastructure projects. This way they can conserve their valuable capital and leverage their expertise and capabilities by making them available to longterm institutional investors.

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