Managing Multinational Infrastructure: An Analysis of European Union Institutional Structures and Best Practice

Willem van der Geest, Jorge Núñez-Ferrer
JEL codes: 
ADBI Working Paper Series

Creating the framework for cross-border infrastructure cooperation often requires the active role of a third party, an “honest broker”, to forge convergence of interests. It is often argued that “deep” European Union (EU)-style integration is a necessary, though not sufficient, condition for successful cross-border infrastructural cooperation. The EU institutions, in particular the European Commission and the European Investment Bank (EIB), have performed such a facilitating and enabling role, though not without encountering challenges along the way. However, this paper argues that the EU experience underscores the vital importance of national governments and good governance in the context of cross-border multinational infrastructure. Hence, the authors argue that “deep” EU-style integration is an enabling but not a strictly necessary condition for successful implementation of cross-border infrastructure projects. The authors take issue with the myth that transnational cross-border infrastructure cooperation is the result of supra-national decision-making at the EU level.
For a particular cross-border infrastructure project to succeed requires tri-partite and multilateral initiatives. These may take the form of “coordinators” (akin to the European Coordinators for TEN-T projects) or special-purpose state-owned companies alongside the Asian (and/or other) Development Banks as co-owners.
The second myth which this paper seeks to address is that the management of trans- national and cross-border infrastructure is primarily supra-national. Although additional co-financing may be sought from the European Community budget and/or the European Investment Bank, these resources always complement national budgetary allocations and private funding. Contingent liabilities always remain at the national and sub-national levels and never at the supra-national EU level.
The implications for management of cross-border multinational infrastructure in Asia, where the framework for regional cooperation is not yet well articulated, are to some extent positive. Within the Asian context, the need for an honest broker can be fulfilled by multi-lateral institutions such as the Asian Development Bank and the United Nations Economic and Social Commission for Asia and the Pacific (UN ESCAP). They can appoint “coordinators” drawing on the growing pool of top-level decision makers in Asia. Most importantly, these initiatives can be realized within the present-day context of Asia’s “shallow” integration.