, Volume 6, Issue 3-4, pp 223-257
Date: 18 Mar 2011

Informal influence in the Asian Development Bank

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Abstract

Through case studies and empirical analysis, scholars have uncovered convincing evidence that individual donors influence lending decisions of international financial institutions (IFIs) such as the World Bank and the Asian Development Bank. Less clear are the mechanisms by which donors exert influence. Potential mechanisms are either formal or informal. Formal influence is through official decisions of the board of executive directors while informal influence covers all other channels. This paper explores the role of informal influence at the Asian Development Bank by examining the flow of funds after loans are approved. Controlling for commitments (loan approvals), are subsequent disbursements linked to the interests of the key shareholders, Japan and the U.S.? I compare these findings with results for the World Bank and consider implications for institutional reforms.