IDEAS home Printed from https://ideas.repec.org/a/bla/glopol/v12y2021i1p24-39.html
   My bibliography  Save this article

Power Structure Dynamics in Growing Multilateral Development Banks: The Case of the Asian Infrastructure Investment Bank

Author

Listed:
  • Hang Luo
  • Lize Yang
  • Kourosh Houshmand

Abstract

As the first multilateral development bank (MDB) initiated by China, the Asian Infrastructure Investment Bank (AIIB) has been growing rapidly, and within three years of its establishment, has become the second largest multilateral development bank after the World Bank. With the assistance of the supercomputer (Weiming‐1) and combing the method of generating functions, we measured precisely the voting power of each member of the AIIB (analysis which has been done for the first time for an organization with more than 80 members and more than 1 million distributed votes). We find that a host of member countries other than China have outsized power to prevent action on significant matters, but their power to initiate action are quite modest and closely distributed. Furthermore, the power structures in the AIIB are relatively even or ‘democratic’ on substantive matters when compared to procedural matters. More interestingly, we analyzed the dynamics of voting power of major members like China, India, Russia, Germany, the UK and France with the admission of new members. While the voting weights of all existing members decreased monotonously and proportionally, the voting power of some members in some cases even increased. We find that the requirements of voting rules, and the size of new and existing members, all affect how members’ power evolve. Lastly, we measured the balance of power and the decision‐making efficiency of the AIIB as a whole organization beyond individual members and discussed relationships between them. Our analysis aims to provide insights into the allocation of voting weights, the design of voting rules and importantly, the choice of membership expansions for growing multilateral development banks.

Suggested Citation

  • Hang Luo & Lize Yang & Kourosh Houshmand, 2021. "Power Structure Dynamics in Growing Multilateral Development Banks: The Case of the Asian Infrastructure Investment Bank," Global Policy, London School of Economics and Political Science, vol. 12(1), pages 24-39, February.
  • Handle: RePEc:bla:glopol:v:12:y:2021:i:1:p:24-39
    DOI: 10.1111/1758-5899.12893
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1758-5899.12893
    Download Restriction: no

    File URL: https://libkey.io/10.1111/1758-5899.12893?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Dennis Leech, 2002. "Voting Power in the Governance of the International Monetary Fund," Annals of Operations Research, Springer, vol. 109(1), pages 375-397, January.
    2. Le Breton, Michel & Montero, Maria & Zaporozhets, Vera, 2012. "Voting power in the EU council of ministers and fair decision making in distributive politics," Mathematical Social Sciences, Elsevier, vol. 63(2), pages 159-173.
    3. repec:oup:jieclw:v:20:y:2017:i:3:p:535-560. is not listed on IDEAS
    4. Matthew Gould & Matthew D. Rablen, 2017. "Reform of the United Nations Security Council: equity and efficiency," Public Choice, Springer, vol. 173(1), pages 145-168, October.
    5. Orfeo Fioretos & Eugénia C. Heldt, 2019. "Legacies and innovations in global economic governance since Bretton Woods," Review of International Political Economy, Taylor & Francis Journals, vol. 26(6), pages 1089-1111, November.
    6. Jiejin Zhu, 2019. "Is the AIIB a China‐controlled Bank? China’s Evolving Multilateralism in Three Dimensions (3D)," Global Policy, London School of Economics and Political Science, vol. 10(4), pages 653-659, November.
    7. J. Alonso-Meijide & C. Bowles, 2005. "Generating Functions for Coalitional Power Indices: An Application to the IMF," Annals of Operations Research, Springer, vol. 137(1), pages 21-44, July.
    8. Hosli, Madeleine O., 1993. "Admission of European Free Trade Association states to the European Community: effects on voting power in the European Community Council of Ministers," International Organization, Cambridge University Press, vol. 47(4), pages 629-643, October.
    9. Dennis Leech, 2003. "Computing Power Indices for Large Voting Games," Management Science, INFORMS, vol. 49(6), pages 831-837, June.
    10. Dan S. Felsenthal & Moshé Machover, 1998. "The Measurement of Voting Power," Books, Edward Elgar Publishing, number 1489.
    11. Jonathan R. Strand, 1999. "State power in a multilateral context: Voting strength in the Asian development bank," International Interactions, Taylor & Francis Journals, vol. 25(3), pages 265-286, March.
    12. Barr, Jason & Passarelli, Francesco, 2009. "Who has the power in the EU?," Mathematical Social Sciences, Elsevier, vol. 57(3), pages 339-366, May.
    13. Vestergaard, Jakob & Wade, Robert H., 2013. "Protecting Power: How Western States Retain The Dominant Voice in The World Bank’s Governance," World Development, Elsevier, vol. 46(C), pages 153-164.
    14. Madeleine o. Hosli, 1996. "Coallitions and Power: Effects of Qualified Majority Voting in the Council of the European Union," Journal of Common Market Studies, Wiley Blackwell, vol. 34(2), pages 255-273, June.
    15. Leech, Dennis, 2002. "Voting Power In The Governance Of The International Monetary Fund," Economic Research Papers 269354, University of Warwick - Department of Economics.
    16. Helmut Reisen, 2015. "Will the AIIB and the NDB Help Reform Multilateral Development Banking?," Global Policy, London School of Economics and Political Science, vol. 6(3), pages 297-304, September.
    17. J. Bilbao & J. Fernández & A. Losada & J. López, 2000. "Generating functions for computing power indices efficiently," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 8(2), pages 191-213, December.
    18. Eugénia C. Heldt & Henning Schmidtke, 2019. "Explaining coherence in international regime complexes: How the World Bank shapes the field of multilateral development finance," Review of International Political Economy, Taylor & Francis Journals, vol. 26(6), pages 1160-1186, November.
    19. Jonathan R. Strand, 2003. "Measuring voting power in an international institution: the United States and the inter-American development bank," Economics of Governance, Springer, vol. 4(1), pages 19-36, April.
    20. Hongying Wang, 2017. "New Multilateral Development Banks: Opportunities and Challenges for Global Governance," Global Policy, London School of Economics and Political Science, vol. 8(1), pages 113-118, February.
    21. Andrew F. Cooper, 2017. "The BRICS’ New Development Bank: Shifting from Material Leverage to Innovative Capacity," Global Policy, London School of Economics and Political Science, vol. 8(3), pages 275-284, September.
    22. Jakob Vestergaard & Robert H. Wade, 2015. "Still in the Woods: Gridlock in the IMF and the World Bank Puts Multilateralism at Risk," Global Policy, London School of Economics and Political Science, vol. 6(1), pages 1-12, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ayse Kaya & Byungwon Woo, 2022. "China and the Asian Infrastructure Investment Bank (AIIB): Chinese Influence Over Membership Shares?," The Review of International Organizations, Springer, vol. 17(4), pages 781-813, October.
    2. Hang Luo & Lize Yang, 2021. "Equality and Equity in Emerging Multilateral Financial Institutions: The Case of the BRICS Institutions," Global Policy, London School of Economics and Political Science, vol. 12(4), pages 482-508, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hang Luo & Lize Yang, 2021. "Equality and Equity in Emerging Multilateral Financial Institutions: The Case of the BRICS Institutions," Global Policy, London School of Economics and Political Science, vol. 12(4), pages 482-508, September.
    2. Yuto Ushioda & Masato Tanaka & Tomomi Matsui, 2022. "Monte Carlo Methods for the Shapley–Shubik Power Index," Games, MDPI, vol. 13(3), pages 1-14, June.
    3. Freixas, Josep & Kurz, Sascha, 2013. "The golden number and Fibonacci sequences in the design of voting structures," European Journal of Operational Research, Elsevier, vol. 226(2), pages 246-257.
    4. A. Saavedra-Nieves, 2023. "On stratified sampling for estimating coalitional values," Annals of Operations Research, Springer, vol. 320(1), pages 325-353, January.
    5. Alonso-Meijide, J.M. & Bilbao, J.M. & Casas-Méndez, B. & Fernández, J.R., 2009. "Weighted multiple majority games with unions: Generating functions and applications to the European Union," European Journal of Operational Research, Elsevier, vol. 198(2), pages 530-544, October.
    6. Le Breton, Michel & Lepelley, Dominique & Macé, Antonin & Merlin, Vincent, 2017. "Le mécanisme optimal de vote au sein du conseil des représentants d’un système fédéral," L'Actualité Economique, Société Canadienne de Science Economique, vol. 93(1-2), pages 203-248, Mars-Juin.
    7. A. Saavedra-Nieves & M. G. Fiestras-Janeiro, 2021. "Sampling methods to estimate the Banzhaf–Owen value," Annals of Operations Research, Springer, vol. 301(1), pages 199-223, June.
    8. Alexander Mayer & Stefan Napel, 2020. "Weighted voting on the IMF Managing Director," Economics of Governance, Springer, vol. 21(3), pages 237-244, September.
    9. Crama, Yves & Leruth, Luc, 2007. "Control and voting power in corporate networks: Concepts and computational aspects," European Journal of Operational Research, Elsevier, vol. 178(3), pages 879-893, May.
    10. Josep Freixas & Sascha Kurz, 2014. "Enumeration of weighted games with minimum and an analysis of voting power for bipartite complete games with minimum," Annals of Operations Research, Springer, vol. 222(1), pages 317-339, November.
    11. André Casajus & Frank Huettner, 2019. "The Coleman–Shapley index: being decisive within the coalition of the interested," Public Choice, Springer, vol. 181(3), pages 275-289, December.
    12. Leech, Dennis, 2010. "Power Indices in Large Voting Bodies," Economic Research Papers 270996, University of Warwick - Department of Economics.
    13. Xavier Molinero & Maria Serna & Marc Taberner-Ortiz, 2021. "On Weights and Quotas for Weighted Majority Voting Games," Games, MDPI, vol. 12(4), pages 1-25, December.
    14. Alexander Mayer, 2018. "Luxembourg in the Early Days of the EEC: Null Player or Not?," Games, MDPI, vol. 9(2), pages 1-12, May.
    15. Josep Freixas & Roberto Lucchetti, 2016. "Power in voting rules with abstention: an axiomatization of a two components power index," Annals of Operations Research, Springer, vol. 244(2), pages 455-474, September.
    16. Andrew F. Cooper, 2017. "The BRICS’ New Development Bank: Shifting from Material Leverage to Innovative Capacity," Global Policy, London School of Economics and Political Science, vol. 8(3), pages 275-284, September.
    17. Imre Fertő & László Á Kóczy & Attila Kovács & Balázs R Sziklai, 0. "The power ranking of the members of the Agricultural Committee of the European Parliament," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 47(5), pages 1897-1919.
    18. Sylvain Béal & Marc Deschamps & Mostapha Diss & Issofa Moyouwou, 2022. "Inconsistent weighting in weighted voting games," Public Choice, Springer, vol. 191(1), pages 75-103, April.
    19. Le Breton, Michel & Montero, Maria & Zaporozhets, Vera, 2012. "Voting power in the EU council of ministers and fair decision making in distributive politics," Mathematical Social Sciences, Elsevier, vol. 63(2), pages 159-173.
    20. Leech, Dennis & Leech, Robert, 2009. "Reforming IMF and World Bank governance : in search of simplicity, transparency and democratic legitimacy in the voting rules," Economic Research Papers 271286, University of Warwick - Department of Economics.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:glopol:v:12:y:2021:i:1:p:24-39. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.