The Future of the Asian Infrastructure Investment Bank: Concerns for Transparency and Governance
China has proposed the Asian Infrastructure Investment Bank (AIIB), initiating a key turning point in the international finance system. Unfortunately, its design at present is quite problematic, for several reasons: it limits participation by Western countries, effectively locking in China as the undisputed leader; the lack of a Board of Directors in residence; the potential for a conflict of interest if the AIIB will fund projects within China; the potential of China to use AIIB for political purposes; the relationship the AIIB will have with already-existing international financial institutions; and the potential for a weakening of “best practices” in order to compete against the other international finance institutions. For these reasons, it was the right decision for Japan not to join as a charter member in order to negotiate the MOU; nevertheless, Japan should maintain the option of joining the AIIB in order to have leverage over the architecture of the AIIB.
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More About This Work
- Academic Units
- Center on Japanese Economy and Business
- Center on Japanese Economy and Business, Columbia University
- Center on Japanese Economy and Business Occasional Papers, 72
- Published Here
- July 16, 2015
The original article written in Japanese was published in Nihon Keizai Shinbun, column of Keizai Kyoshitsu, on April 30, 2015.