China's Leadership in Global Economic Governance and the Creation of the Asian Infrastructure Investment Bank

Abstract

Abstract Are we witnessing a restructuring of the global economic order, akin to the period immediately after World War Two; or is China's leadership in global economic governance ancillary -even complimentary -to the existing order? To assess how China's role in global economic governance has transformed, we examine China's engagement with the World Bank (WB) and Asian Development Bank (AsDB). We analyze how the governance systems of these legacy intergovernmental organizations (IOs) have adjusted to the rise of China. We then turn to an inspection of China's leadership within the Asian Infrastructure Investment Bank (AIIB) to determine whether it parallels or diverges from governance arrangements in legacy IOs. Our findings indicate that the AsDB and WB have failed to adjust to suitably account for the increased influence of China. Our conclusion suggests the creation of the AIIB was the result of frustration with the glacial pace of governance change in American-dominated global institutions. At the same time, we conclude the AIIB should not be seen as a direct challenge to legacy IOs and American dominance of global economic governance. We expect the continued widespread dissatisfaction of China and other rising powers within the American global order unless legacy IOs undertake significant adjustments to their internal governance mechanisms