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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 collect (and make available) information on the regions of origin of about 500 national representatives at the EIB's Board of Directors-the decisive body for loan approvals-since its foundation in 1959 and show that a representative's appointment increases the probability of her sub-national region receiving a loan by about 17 percentage points. This "home-bias" effect is driven by large loans financing infrastructure projects. We provide several pieces of evidence, which are consistent with the hypothesis that home-bias lending may lead to resource misallocation, however we cannot conclusively demonstrate this case of economic inefficiency.

This study explores the positions of economic experts from Central and Eastern European (CEE) Member States in the euro reform debate. Given the dominant voices from French and German politicians and academics in the European discourse, there is an obvious neglect for the positions of CEE countries. Our study tries to fill this gap with a large survey among economic expert communities in all CEE countries conducted in spring 2019. We compare euro reform preferences to benchmarks of surveyed experts in France, Germany, and Italy. We discuss implications for the ongoing euro area reform with a particular focus on several non-euro members' growing reluctance to introduce the common currency. We argue that only a balanced reform package that combines solidarity with debt self-responsibility could foster the euro's appeal in the CEE region.