An Effective Asian Infrastructure Investment Bank: A Bottom Up Approach
| DOI | http://doi.org/10.1111/1758-5899.12357 |
| Date | 01 November 2016 |
| Author | Anton Malkin,Bessma Momani |
| Published date | 01 November 2016 |
An Effective Asian Infrastructure Investment
Bank: A Bottom Up Approach
Anton Malkin
Centre for International Governance Innovation
Bessma Momani
University of Waterloo
Abstract
This article suggests that the debate surrounding the inception of the Asian Infrastructure Investment Bank (AIIB) is missing a
crucial element of staffing policy. We review existing literature on IMF and World Bank reform, which shows that developing
and emerging economy leadership in the organizations may not be sufficient in changing the normative character and policy
orientation of the new organization. To counter principle-agent problems that make multilateral lending institutions unrespon-
sive to policy directives from shareholders and management, we argue that staffing policies should be at the forefront of AIIB
scrutiny. We show that, staffing practices should safeguard against three specific staff-level issues: (1) half-hearted or incom-
plete policy mandate reform; (2) intellectual monocropping; and (3) at organization culture incompatibility. To substantiate our
conclusions and policy recommendations we examine the World Bank and IMF as case studies of staff-level reforms in multi-
lateral lending institutions.
Policy Implications
•Safeguard against ‘intellectual monocropping’: create procedural channels to allow new ideas to take root.
•No half-measures: create a core (not auxiliary) mandate that staff engage with socioeconomic, environmental, and humani-
tarian issues.
•Balance institutional hierarchy with critical thinking: hire more mid-career development practitioners to benefit from on-
the-ground experience and original ideas
•Avoid the beaten path: Recognize intellectual diversity among economists and non-economist social scientists; hire more
recruits from outside of top US and UK graduate programmes.
1. Refocusing the AIIB debate
The inception of the Asian Infrastructure Investment Bank
(AIIB) is perhaps the most talked about event in global eco-
nomic governance since China joined the World Trade Orga-
nization (WTO) in 2001. The world’s eyes are again on
China, and policy makers and the media alike seem to be
focused on a single theme: China’s challenge to US hege-
mony in the global economy. Thanks in part to the bungled
US-Japanese response to China’s push to create this organi-
zation –not to mention the strong willingness of US and
Japanese allies to join the organization despite the two
countries’warning against doing so –media outlets and
think tanks have honed in on the element of power politics.
Moreover, the US Congress’resistance to signing the IMF
quota renewal –which would pave the way for a shift in US
power to emerging market economies at the Executive
Board –has further heightened views of AIIB as a Chinese
reaction to stubborn US hegemony. Hence, discussion on
the AIIB has focused on structural and global politics. For
example, some have focused on the effect of the AIIB on
the potential decline of the US dollar as an international
reserve currency, and the concomitant rise of China's cur-
rency, the renminbi (RMB) (Pettis, 2015); some have specu-
lated on the implications of this move for China’s future
leadership in global economic governance institutions
(Wang, 2015); while others have characterized the AIIB as an
indicator of US decline (Mahbubani, 2015)
Much of this discussion surrounds an international organi-
zation (IO) that, at the time of writing, is yet to make a sin-
gle loan and, more saliently, hire a single staff member. And
while there is no lack of reporting, commentary, and aca-
demic analysis of the AIIB, much of it focuses on how this
bank will be governed –on who will pull the managerial
strings and how this will impact Western-dominated IOs.
Instead, in this article, we focus on how the bank could
Global Policy (2016) 7:4 doi: 10.1111/1758-5899.12357 ©2016 University of Durham and John Wiley & Sons, Ltd.
Global Policy Volume 7 . Issue 4 . November 2016 521
Research Article
To continue reading
Request your trial