Informal Governance in The Asian Development Bank
Date Issued
2015
Date
2015
Author(s)
Jiang, Ching-Shiuan
Abstract
In the era of rapidly changing international economic order, international organizations such as the Asian Development Bank (ADB) stand at the forefront of the challenge. The challenge that emerges from the rising importance of the BRICS reflects the leaning governance structure in favor of existing powers within the international financial institutions. International Relations theories have long debated whether international organizations are independent from the influence of powerful states. In the case of ADB, even though many researches have verified that donor interest is important, especially that of the U.S. and Japan, the real decision-making mechanism remains vague. How do development banks make decisions? How do existing powers influence the decisions of the banks, and to what extent? These questions are investigated here through studying the case of ADB. In this thesis, the theory of informal governance is used to explore how Japan and the U.S. influence the decisions of ADB. After analyzing the decision making process of ADB, using interview and content analysis, it is found that the influence exerted by formal voting is indeed limited. Instead, informal channels are embedded in the institutional design as major means to influence the bank’s decisions, mainly through funds donation and personnel recruitment. The quantitative model further testifies the general influence of Japan and the U.S. in the distribution of resources in the ADB. The converging interest of these two countries results in a high level of delegation ownership by ADB officials, leaving sufficient space for informal influence. This research responds to the current calls for institutional reform in international organizations. The thesis argues that to correct the leaning governance structure, not only formal voting rights require redistribution, but also decision-making channels need to be formalized. The theory of informal governance indicates that the overuse of informal influence will undermine the legitimacy of the organization, which could very well be the underlying cause of the new multilateral initiatives in Asia.
Subjects
Asian Development Bank
governance
informal influence
power
institution
donor interest
Type
thesis
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