UK can influence new Investment Bank

The decision of the UK Government to join the Asian Infrastructure Investment Bank (AIIB) provides an opportunity for it to ensure that the new institution benefits from the experience of DFID and other bilateral and multilateral institutions that invest in infrastructure.

This is one of the arguments advanced in an article by Adam Smith International in association with EAP.

The article stresses the need to get the institutional arrangements right when it argues that “Organisational culture and design have an impact on delivery”. It goes on to say:

“The recent review of ‘How DFID Learns’ demonstrates that internal processes on knowledge management can influence decision making and development impact. The World Bank is in the midst of an internal reform effort that recognises the impact internal structures have had on effectiveness.”

EAP Executive Director Petter Matthews, a contributor to the article, said:

“China has achieved extraordinary levels of economic growth and poverty reduction in recent decades and a large part of this success is attributed to the Government’s capacity to plan and implement major infrastructure projects. However, Chinese infrastructure investments outside of China have often encountered problems and been controversial with local communities. It would be a mistake therefore to assume that China’s domestic investment experience can be used as a template for the AIIB.”

The AIIB has 57 Prospective Founding Members and it is expected to be fully established by the end of 2015.