This paper investigates how the unique financial model of multilateral development banks - dependent largely on issuing bonds in private capital markets to raise lending resources - came about in the early history of three different MDBs, and how this in turn shaped their operational characteristics. Historical research demonstrates that the World Bank, Inter-American Development Bank (IADB) and Andean Development Corporation (CAF) converged on organisational and operational arrangements very different to what their founders had intended, and much closer to one another, as a direct result of the need to secure sufficient resources to function as viable development lenders. The findings indicate that in the absence of governments willing or able to provide significant financing out of their budgets, MDBs tend to converge towards a single organisational model in order to maintain access to international capital markets. All three MDBs examined here modified their lending and financial policies in unexpected ways and, in the case of the IADB and CAF, even restructured their original membership, specifically for the purpose of securing adequate financial resources.
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