The economic impact of a National Investment Institution (NII) is likely to be limited, according to an assessment from the experts at the CPB Netherlands Bureau for Economic Policy Analysis, issued only days after the Cabinet unveiled plans to create such a body.

On Budget Day, the Cabinet said adequate availability of financing for innovative entrepreneurs is important for the Dutch economy. It therefore intends to establish a National Investment Institution and has set aside 3.3 billion for it. The new body would channel money into projects and companies that the market leaves unfunded.

CPB, a key adviser to the Cabinet, says the usefulness and necessity of such an institution remain the subject of a broad public debate. It can indeed add value by making financing more accessible. For wider public goals such as sustainability, defense, and infrastructure, however, other government tools – for example, subsidies – would reportedly often be more suitable.

“Even if the NII is created to improve companies’ access to finance, it is not a solution to every bottleneck firms face when they invest,” the CPB experts wrote. An institution of this kind – also described as a national investment bank – adds value only if it enables investments that private investors would not otherwise make. “How many investments that are in fact profitable still cannot obtain financing is hard to establish,” they add. Financing may well be available, yet an investment can still be blocked by other constraints, such as a shortage of staff or of notrogen emission space.

The Hague has long wanted a national investment bank. Many economists and other prominent figures, including former ASML executive Peter Wennink, have previously pressed for one.

Supporters point to other countries that already have national investment banks to help their economies through large-scale shifts such as digitalization and energy transition.