AI Summary & Key Takeaways
AI InsightWithin the context of power transition, the political bargaining process in reforming existing multilateral regimes is likely to be shaped by the tension between minilateralist strategies of rising powers and truly multilateral operations within newly emerging financial regime.
📌 3 Key Takeaways
Abstract
While existing studies largely focus on the implications of China-led new multilateral institutions to international order, the question of underlying reasons for the establishment of those institutions and their future development success have received less attention. China ’ s strategies towards institutional reform are mainly based on its dissatiffaction with asymmetrical distributional gains within existing multilateral institutions such as World Bank and International Monetary Fund (IMF). By using bargaining theory in international relations, this article contributes to explain the main conditions and mechanisms of the creation of Asian Infrasturucture Investment Bank (AIIB). In creating AIIB, China aims to increase its bargaining leverage which provides itself direct and indirect benefits vis-a-vis the costs emanating from intensified strategic competition with the US. Thus, it is argued that China ’ s expectation of success reinforced by direct and indirect benefits for the development of AIIB reflects both the significant motivations underpinning its creation and also the possibility of extended institutional reform into other multilateral regimes. Within the context of power transition, the political bargaining process in reforming existing multilateral regimes is likely to be shaped by the tension between minilateralist strategies of rising powers and truly multilateral operations within newly emerging financial regime.