Donor Influence in MDBs: The Case of the Asian Development Bank

Abstract: This paper explores the influence of Japan and the United States over the geographic distribution of Asian Development Bank (ADB) loans. Although nominally an independent, multilateral organization, the ADB is widely regarded as bowing to the interests of its two most influential donors. Estimation using panel data for all ADB borrowing countries from 1968 to 1992 reveals significant differences in donor influence with Japanese commercial interests carrying more weight than US interests. Comparing the results with work on the geographic distribution of World Bank lending by Fleck and Kilby (2001) suggests that donor interests more heavily influence the ADB than the World Bank. This finding justifies the existence of regional development banks on political grounds but calls into question their relative merits on economic grounds. 2 I