When Do Established Powers Support Rising Powers’ Multilateral Institutions? The Case of the Asian Development Bank

Abstract

Abstract What are the institutional features that incentivize established powers to join rising powers’ new institutions? Going beyond alliance versus rivalry, this paper develops a novel theory in answering this question. We argue that the established power must address two primary design issues: 1. how to navigate the control and burden-sharing trade-off and 2. how to limit the potential diffusion of power by rendering the new institution “complementary” to the existing order. To the extent that these issues are resolved in line with the established power’s (EP’s) preferences, the EP is more likely to join the rising powers’ institutions. We support our theory with an in-depth case analysis of the Japanese-led Asian Development Bank, utilizing primarily archival materials. The relatively under-theorized core question has both historical and contemporary relevance. The paper also advances the history of US multilateral economic policy.