The Asian Development Bank

Abstract

Rivalry between the United States and Japan over Asian economic growth left its mark on the ‘personality’ of the Asian Development Bank (ADB). The evolution of the ADB provides, therefore, interesting insights as regards the extent to which a principal-agent approach can be used to shed light on this regional development bank’s evolution. Usually, a principal-agent approach opposes the owner (principal) to the manager (agent). Competition observed in the ADB opposes less the principals to the agent than the principals with each other. The ADB Charter ensures regional members a majority of ‘voice’ in the Bank and that smaller members have a minimum of representation. Moreover, competition between the United States and Japan during the 1990s encouraged other member countries to counterbalance the leaders’ influence by increasing their share in voting power. China’s entry into the Bank from 1986 also contributed to diversifying the points of view among the member countries.