Shifts and hurdles in the urbanization of development finance: The case of the World Bank’s city creditworthiness initiative

This chapter discusses the increasing entanglement of development finance and urban development agendas, particularly regarding the advancement of urban sustainability and green investment. We build on the literature on the financialization of sustainability and development as well as on the emerging debate on the financialization of municipal budgets. Empirically, we focus on activities of the World Bank’s City Creditworthiness Initiative, which has been running with interruptions since 2014. Based on an analysis of strategic documents and interviews with key actors in the implementation of this program, we examine how the World Bank targets cities as partners and loan beneficiaries. Our line of argumentation is twofold. First, we suggest that the ways in which financial initiatives such as the City Creditworthiness Initiative target cities indicate important institutional and programmatic shifts in development practice. These shifts serve to open up new sites and economic sectors in so-called emerging-market cities to the conversion of their assets into products of financial value. Our findings thus document how the World Bank’s financial disciplinary efforts move from the national (as in earlier forms of development finance) to the local scale. Second, we argue that implementation of the urbanization agenda is a fragile process that is fraught with hurdles and leads to potentially ambivalent outcomes for Southern municipalities. In sum, we offer a critical discussion of the nature of urban financialization in the context of development finance, where the rescaling of power to the urban level may also increase the room for maneuver for cities, but where possible power gains remain highly unclear, potentially risky and subject to drastic and sudden change.