The Political Economy of Financing Large-Scale Transformations
Off-Balance-Sheet Fiscal Agencies in Wars, Reconstruction, and the Green Transition
What is OBFA-TRANSFORM?
The transition to a net-zero carbon emission economy is the defining challenge of our age. In spite of a wide range of technical solutions available to drive this transition, one aspect remains unclear: where should the money come from to pay for it?
The OBFA-TRANSFORM project is a six-year research project funded, by Deutsche Forschungsgemeinschaft and based at the Global Climate Forum in Berlin. It studies the political economy of large-scale transformations through the lens of off-balance-sheet fiscal agencies in wars, reconstruction, and the Green Transition.
Objectives
We apply our conceptual framework through historical case studies which examine the financing of politically desired large-scale transformations during the 20th century. We map the transformation of historical monetary architectures during these financing processes, concentrating on the key role played by off-balance-sheet fiscal agencies (OBFAs).
Key concepts
Monetary architecture
Off-balance-sheet fiscal agencies
Macro-financial governance process
The triad framework
Monetary architecture
Off-balance-sheet fiscal agencies
Macro-financial governance process
The triad framework
Case studies
War
finance
Reconstruction
finance
Green Transition
finance
War
finance
OBFAs played a pivotal role in financing military expenditure in North America and Europe throughout the 20th century. Setting up OBFAs not only enhanced credit money creation at an unprecedented scale but also transformed the monetary architectures for good.
Reconstruction
finance
Post-war reconstruction efforts required massive financial coordination between public and private sectors. OBFAs emerged as crucial intermediaries in channeling resources for rebuilding infrastructure and economic systems.
Green Transition
finance
Modern climate finance leverages OBFA structures to mobilize capital for renewable energy and sustainable infrastructure projects, creating new monetary architectures for environmental transformation.
Team
Olan McEvoy
Doctoral researcher
Dr. Steffen Murau
Principal Investigator
Dr. Armin Haas
Senior researcher
Dr. Andrei Guter-Sandu
Senior associate researcher
Friederike Reimer
Doctoral researcher
Publications
Theorie der monetären Architektur und die Rolle des Staates in der Finanzierung der "grünen Transformation" | Leviathan. Berliner Zeitschrift für Sozialwissenschaft - (2025) | Steffen Murau, Armin Haas, Andrei Guter-Sandu |  |
Encumbered Security? Vertical and Horizontal Repos in the Euro Area and Their Inherent Ambiguity | Journal of Financial Regulation - (2025) | Steffen Murau, Alexandru-Stefan Goghie, Matteo Giordano | |
Shadow Money in the History of Monetary Thought | Review of Political Economy - (2025) | Steffen Murau, Tobias Pforr | |
Rethinking Currency Internationalisation. Offshore Money Creation and the EU's Monetary Governance | Journal of European Public Policy - (2025) | Steffen Murau, Jens van ’t Klooster | |
Schrödinger's Off-Balance-Sheet Fiscal Agency. The Recovery and Resilience Facility and the Limits to Incremental Fiscal Integration in Europe | Journal of European Integration - (2025) | Friederike Reimer, Andrei Guter-Sandu, Armin Haas, Steffen Murau | |
Theorie der monetären Architektur und die Rolle des Staates in der Finanzierung der "grünen Transformation"
Leviathan. Berliner Zeitschrift für Sozialwissenschaft - (2025)
Steffen Murau, Armin Haas, Andrei Guter-Sandu
Encumbered Security? Vertical and Horizontal Repos in the Euro Area and Their Inherent Ambiguity
Journal of Financial Regulation - (2025)
Steffen Murau, Alexandru-Stefan Goghie, Matteo Giordano
Shadow Money in the History of Monetary Thought
Review of Political Economy - (2025)
Steffen Murau, Tobias Pforr
Working Paper Series
OBFA-TRANSFORM
Working Paper Series
Securitising System Costs. The United Kingdom’s Arm’s-Length Derisking Regime for the Green Transition
A Silent Revolution in the Suburbs. Off-Balance-Sheet Fiscal Agencies in U.S. Mortgage Finance, 1932-1981
Mind the MacMillan Gap: Off-Balance-Sheet Fiscal Agencies in Britain's Post-War Industrial Financing, 1945-1973
From Stabilisation to Strategic Mobilisation. The Exchange Equalisation Account as a Wartime Off-Balance-Sheet Fiscal Agency, 1932-1945
Après le Déluge. Managing Balance Sheet Contraction after the First World War
All Quiet on the Fiscal Front? Off-Balance-Sheet Fiscal Agencies in the German War Economy, 1914-1918
The Green Transition—a politically desired large-scale transformation of physical capital stock to reach net-zero carbon emissions—is the greatest challenge of our age. We broadly know what technically needs to happen, but one question remains unsettled: Where should the money come from to pay for it?
DATASET
online
repository
TRANSFORMATION OF THE EUROZONE ARCHITECTURE
Crises and Institutional Change in the Offshore US-Dollar System
What does the online tool do?
- Make the Monetary Architecture framework interactive and visualize dynamic change in a web of interlocking balance sheets with a time-shift function
- Explain how credit instruments form a self-referential system by tracing on which balance sheets they are held as assets or liabilities
- Convey how monetary architectures are historically specific and subject to permanent transformation
Explore the Monetary Architecture Online Tool
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