ABSTRACT
This chapter compares the AIIB with the ADB and the World Bank. It shows that the AIIB is another development-financing vehicle with a power structure problem. The difference this time is that it is structured to ensure that China is in the lead. Not only does China have stronger veto power in the AIIB, there are also more occasions when it can use its veto. Even if the European members of the AIIB were to align with the United States, China would retain its veto power. Aside from veto power, the power of the president of the AIIB is greater than that of the presidents of other IFIs without a resident board. From an institutional perspective, the AIIB does not appear to be a norm challenger, as some have suggested. Compared with the other two Bretton Woods IFIs, the AIIB has deviated slightly from established standards both legally and in practice. But there is no evidence to suggest that a serious race-to-the-bottom problem will emerge anytime soon. As for the issue of loan competition, the evidence suggests that the ADB has reacted by boosting its financial capacity in several respects, while the World Bank’s reaction is less clear. Evidence presented in this chapter suggests that the AIIB is behaving more like a new development agency controlled by a new dominant global power. In its present incarnation, this China-led bank has the potential to challenge the status quo.
