The Impact of China's AIIB on the World Bank

Jing Qian, James Raymond Vreeland, Jianzhi Zhao

Research output: Contribution to journalArticlepeer-review

3 Scopus citations

Abstract

The World Bank, under the stewardship of the United States, stands out as the global leader among international development organizations. Does China's establishment of the Asian Infrastructure Investment Bank (AIIB) undermine this status? Examining this question, we focus on the borrowing practices of a special set of countries: the founding members of the AIIB. These founders openly defied the public preference of the United States, arguably to create a potential rival to the World Bank. Using a new causal inference method, Pang, Liu, and Xu's Dynamic Multilevel Latent Factor Model - as well as several well-known estimation models as robustness checks - we document at least a temporary decrease in the number of World Bank infrastructure projects that the developing AIIB founders have entered into. This study presents the first systematic evidence that China's AIIB could unsettle the political influence the United States has enjoyed over developing countries through its leadership of the World Bank. An important set of countries may be parting ways with the World Bank and looking to a Chinese institution for leadership in the world of development.

Original languageEnglish (US)
Pages (from-to)217-237
Number of pages21
JournalInternational Organization
Volume77
Issue number1
DOIs
StatePublished - Nov 17 2023

All Science Journal Classification (ASJC) codes

  • Sociology and Political Science
  • Political Science and International Relations
  • Organizational Behavior and Human Resource Management
  • Law

Keywords

  • AIIB
  • Asian Infrastructure Investment Bank
  • World Bank
  • infrastructure programs
  • international institutions
  • multilateral development banks

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