International financial institutions (IFIs) are active in many developing countries, influencing the economy through their different operations and, in some cases, exerting significant influence on public sector reform and national economic policies.

This Policy Brief highlights the theoretical and empirical linkages between the private sector and democratization, and offers practical recommendations for IFIs committed to having a positive impact on democratization processes.

It is based on knowledge generated by the joint International IDEA–European Investment Bank project ‘Enhancing the Impact of Private Sector Development on Democratic Transitions in the Mediterranean Partner Countries’.