Rising PoweRs and global institutions

g. John ikenbeRRy
andthomas wRight
a CentuRy Foundation RePoRt
the CentuRy Foundation
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3
IntroductIon
F
or over half a century, the United States has dominated world politicsand
todays global institutions refect this reality. America emerged preemi-
nent after World War II and built a postwar international order around a
remarkable array of governance institutions, most notably the United Nations,
the International Monetary Fund (IMF), the World Bank, the General Agreement
on Tariffs and Trade (GATT), and regional security alliances. The end of the
cold war consolidated this American-led global institutional order. Throughout
this period, Western Europe has been Americas willing partner. Together, their
economies and military capacities overshadowed the rest of the world, even as
the West liquidated its colonial empires. The Atlantic world that they inhabit
has been the geopolitical center of gravity and the modernizing vanguard of the
global system. In a very real sense, America and the West have laid down the
rules and institutions of the postwar world. They have been its creators, owners,
managers, and chief benefciaries.
But this is changing. Today, a group of fast-growing developing
countriesled by China and Indiaare rising up and in the next several decades
will have economies that will rival the United States and Europe. For the frst
time in the modern era, economic growth is bringing non-Western developing
countries into the top ranks of the world system. This dramatic observation was
made in a 2003 Goldman Sachs study, which noted that, if present economic
trends continue, by 2050 the countries of Brazil, Russia, India, and Chinathe
BRICscould have economies that together would be larger than the old
G-6 advanced countriesthe United States, Japan, Great Britain, Germany,
France, and Italy.
1
According to these economic projections, China will pass
the Europeans and Japan by 2020 and the United States by 2045.
These fast-growing developing countries are already becoming an interna-
tional economic force. According to the Economist, developing countries now
4 G. Jchn lkenLerry cnc Ihcmc: WrighI
produce half of the global gross domestic product (GDP). They hold most of
the worlds fnancial reserves and are placing huge new demands on energy and
raw materials.
These are remarkable developments with potentially far-reaching implica-
tions for power and governance in world politics.
2
The non-Western, middle-
tier developing countries are rising up and forcing change in the global system.
Their collective size and impact on trade, fnance, energy, and the environment
will make them important players. Their economic development will create
opportunitiesbut also pressures, shortages, and other negative externalities.
They will become increasingly harder to ignore or leave outside the doors of
power. At the 2006 annual meeting of the IMF and World Bank in Singapore,
representatives from several of these rising countries noted that their economies
were stronger than several of the advanced economiesand they insisted on
gaining a greater voice over the setting of policies.
Indeed, lurking among these developments are questions about the impli-
cations for the postwar institutions of governance. How will these rising states
impact the existing system of international institutions? Will they seek to
integrate and operate within existing institutions, or seek to transform or work
around them? To what extent will these institutions need to be reformed so as
to accommodate these rising developing countries? To what extent will these
countries seek to develop their own institutions or build new alliances among
themselves in pursuit of their economic and political goals? What are the impli-
cations for the political direction and issue agendas of global institutions such as
the United Nations and the Bretton Woods institutions? How should the United
States and Europe respond to these new institutional challenges?
Behind these developments are deeper historical and theoretical questions
about the rise and decline of great powers and transitions in global order. The
rise of newly powerful states is one of the classic problems of international
relations, and historically it has been a source of confict and violence. Established
great powers that have organized and presided over the international systemand
put in place the prevailing rules and institutionsface rising states that have their
own interests and, increasingly, the power to assert those interests. Powerful
but declining states, struggling to stay in control of the global system, face
challenger states bent on change. It is this grand historical drama that has
Fi:ing Fcwer: cnc G|cLc| ln:IiIuIicn: 5
repeatedly played itself out through the centuriesand generated upheaval
and war.
But the current international orderthe order that the rising developing
states faceis different than past international orders. It is a much more insti-
tutionalized order than previous orderswith denser and more complex and
multilayered governance rules and institutions. The rising states themselves
are different than past challengers. With the exception of China and perhaps
Russia, none of the current rising states are potential military challengers to
Western powers. They each have specifc niches and comparative advantages
that are propelling their economic advance. But for all of them, their economic
growth is deeply dependent on trade and investment within the existing world
economy.
This report makes the following arguments:
Unlike the past, today there is a wide array of channels and mechanisms
that allow the new rising states to join and to be integrated into the gov-
ernance arrangements of the old order. The big point here is that, seen
in historical perspective, the existing U.S.-led institutionalized order is
easier to join and harder to overturn. The specifc character of todays ris-
ing states and the interests, incentives, and constraints that they manifest
and face make integration and accommodation more likely than radical
transformation.
The specifc character of existing global institutions provides oppor-
tunities for membership and voice. Three points are important. One is
that the existing institutional order provides some protections for rising
economic powers. For example, China may have a growing interest in
working within the Word Trade Organization (WTO) because that institu-
tion provides protections against the discriminatory treatment that a rising
economic power like China is likely to face. The second is that several
of these institutions are relatively easy to operate within, and it is fairly
simple to rise up through their hierarchies. The World Bank and IMF are
institutions where governance leadership is based on economic shares,
which growing countries can leverage into a greater institutional voice.

G. Jchn lkenLerry cnc Ihcmc: WrighI

The UN Security Council is more resistant to this sort of incremental
shift in role and leadership. The third is that existing institutions do have
incentives to integrate and accommodate rising states in various ways. For
example, the IMF has a crisis of mission and its existing shareholders see
the expansion of a role for countries such as India and China as part of a
strategy for renewing the institution and preserving its mission.
Each institution has its own specifc array of constraints and opportunities
for rising states. We will discuss the United Nations, the IMF, World Bank,
the Nuclear Non-Proliferation Treaty (NPT), and the WTO. As noted,
each institutionwith its existing shareholdershas a distinct capacity
and willingness to accommodate new powers and redistribute voice and
authority. We will survey the institutions and the variations.
Each country has its own assets and problems as it faces existing global
institutions. All of these countries have a dominant interest in the mainte-
nance of a stable and open orderand therefore have incentives to support
rules and institutions that favor stability and openness. Their ability to push
for change in institutions varies with their assets and geopolitical positions.
We will survey these countries to explore these various characteristics. We
will also discuss the ability of these countries to work together as a lobby
or coalition of rising states.
Finally, we look at the shifting in the style, agendas, and institutional forms
of global governance that are likely to emerge. The American-led postwar insti-
tutions are generally formal-based global multilateral institutions. These insti-
tutions will not disappear. But two alternative forms of governance are likely
to grow in importance. One is informal steering committeessuch as the
G-8 and G-20. These institutions have advantages for rising states. They are
easier to join (particularly in contrast with the United Nations) and they do
not entail direct diminishment of sovereignty. Another form is regional gover-
nance institutions. These also provide advantages for rising states. They give
these states greater authority than they might have within global institutions.

Fi:ing Fcwer: cnc G|cLc| ln:IiIuIicn: 7

Regional institutions also allow for cooperation on specifc problems that are
particularly pressing for these states. So, overall, the balance of governance
institutions will be redrawn.
In what follows, we frst look at the questions that are at stake, and we
explore the theoretical and historical debates that inform our discussion.
Following this, we look at specifc institutionsthe United Nations, the IMF,
the World Bank, the NPT, and the WTOand how responsive they are to the
demands of the superpower and specifc rising states. Finally, we look at the
overall impacts of these rising states on global institutionsand we assess how
the aggregate developments will impact the array of governance institutions
(global, regional, and informal).
rIsIng states and InternatIonal order
The rise and decline of states is one of the enduring dramas of international
relations, frequently generating security competition and confict that shape and
reshape the global landscape. We can begin by situating the current version of
this classic drama in wider historical and comparative perspective, identifying
both recurring dynamics and novel features. These momentswhat are often
called power transitionsare fraught with danger. But distinctive features of
the current international order suggest that this particular power transitionor
the set of power transitions that are unfolding simultaneouslywill not be
entirely like those in the past. The current international order is harder to over-
turn and easier to join.
First, it is useful to see the international order as a hierarchical political
system that more or less refects the interests of the dominant states. Change
occurs as powers rise to greatness and decline, and as they struggle over the
rules and institutions of order. Robert Gilpin provides a classic account of
international relations in these terms. The history of world politics is marked
by a succession of powerfulor hegemonicstates that rise up to organize the
international system. The hierarchical international order is maintained as long
as the leading state remains powerful enough to enforce the rules and institu-
tions of order. When this state declines, the existing order begins to unravel and
8 G. Jchn lkenLerry cnc Ihcmc: WrighI
break apart. As Gilpin contends, a precondition for political change lies in a
disjuncture between the existing social system and the redistribution of power
toward those actors who would beneft most from a change in the system.
3

Steady and inevitable shifts in the distribution of power among states give rise
to new challenger states that eventually engage in geopolitical struggle over the
terms of order. Ultimately, the result is the overturning of the old order and the
triumph of new dominant states that reorganize the rules and institutions of the
international order to ft their interests.
4
Second, these power transitions historically have often generated confict
and even war. E. H. Carr argues that the problem of peaceful change is a central
dilemma of international relations.
5
The rise of post-Bismarck Germany in the
late nineteenth centuryand the ensuing great power rivalry, arms races, insta-
bilities, realignments, and a thirty-year war between England and Germanyis
the classic case. Germanys ascent began with its unifcation under Bismarck
in 1870 and the rapid growth of its economy. By the 1880s and 1890s it was
acquiring overseas territories and building a modern navy. In 1870, Britain
had a three-to-one advantage in economic power over Germany, but by 1903
Germany had pulled ahead of Britain in overall economic and military power.
6

The rise of German power triggered the classic dynamics of a power transi-
tion: as Germany unifed and grew, so too did its dissatisfactions, demands,
and ambitions; and as it grew more powerful, security dilemmas emerged and
Germany increasingly appeared as a threat to other great powers in Europe. The
result, of course, was a European war.
Third, not all power transitions generate war or overturn the old order.
Britain ceded power to a rapidly growing America in the early decades of the
twentieth century without great confict or a rupture in relations. Japan grew
from 5 percent of the American GNP in the late 1940s to over 60 percent of
its size in the early 1990s without challenging the existing international order.
Power has been redistributed within Western Europe since the end of World War
II with negligible impact upon the security of member states of the European
Economic Community, later to become the European Union. Clearly there are
different types of power ascents and power transitions. Some states have grown
rapidly in economic or geopolitical power and, in the end, accommodated
themselves to the existing international order (Japan). Other great powers have
Fi:ing Fcwer: cnc G|cLc| ln:IiIuIicn:
risen up and indeed sought to challenge the existing great power order (post-
Bismarck Germany). Some power transition moments led to the breakdown of
the old order and the establishment of a new global hierarchy of order (Britain
after 1815 and America after 1945). Other power transitions did not result in a
transformed international order but in more limited adjustments in the regional
and global system (Japan and Germany in the postwar era).
Fourth, a variety of factors shape the way in which power transitions
unfold. Clearly, the character of a rising powers dissatisfaction can vary. This
is true in regard to subjective judgments by leaders about their states interests
and desire for a greater governance role. But there is also variation in the ability
of rising states to advance their expanding economic and political goals within
an existing international order. Moreover, the actual ability of rising states to
experience gains from challenging or overturning the existing international order
will vary. In the current age, in which China, the United States, and other great
powers possess nuclear weapons, the costs and beneftsindeed the rationalityof
hegemonic war are reduced to essentially zero. Likewise, the power transition
dynamic is typically seen to play out between the worlds dominant state and a
rising state. It is seen as a dyadic drama between two states. But the actual power
of the leading state is much greater if its power is effectively aggregated with
other great powers allied with it. In this sense, a rising state faces not just a lead
state but alsoat least potentiallya wider coalition of status quo great powers
arrayed around the hegemonic state. Finally, the character of the international
orderand the degree to which it is based on coercion or consentwill mat-
ter. It will infuence how a rising state calculates its interests and the choices it
makes to either integrate or challenge the order. It will infuence the ability of
the leading state to aggregate power and enforce the rules and maintain a stable
international hierarchy.
Indeed, the actual character of hierarchy and rule within an international
order can vary widely. (a) The international order can be dominated by a single
state or it can be dominated by a group of states that are bound together and
govern the system. (b) The international order can be rigidly hierarchical and
governed by coercive domination exercised by the leading state in the system
or it can be relatively open and benevolent, organized around reciprocal, con-
sensual, and rule-based relations. (c) The international order can be organized
10 G. Jchn lkenLerry cnc Ihcmc: WrighI
so that the material benefts that are generated accrue disproportionately to the
lead state or it can be organized so that the material benefts of participation
within the order are more widely shared.
7
The point of these observations is to
suggest a general proposition, namely, that the more the international order is
dominated by a group of states that are bound together in deeply rooted institu-
tions, the more the international order is open, consensual, and rule-based, and
the more the benefts of the order are spread widely, the more likely that rising
powers can secure their interests through integrating into rather than challeng-
ing the order, and the greater the incentives that will exist for rising states to
accommodate themselves to that order.
Fifth, the existing international order is substantially different from past
international orders along the dimensions indicated above. In general terms, it is
more open, institutionalized, consensual, and rule-based than past international
orders. The United States emerged as the worlds preeminent power after World
War II amidst sharp and dramatic shifts in the global distribution of power. More
so than Britain in the nineteenth century or other hegemonic states in earlier
eras, the United States built its order around institutionalized relationships. This
is order built around multilateralism, alliance partnership, strategic restraint,
cooperative security, and institutional and rule-based relationships. The United
Nations, the IMF, the World Bank, the North Atlantic Treaty Organization
(NATO), GATT, and other institutions that emerged provided the most rule-
based structure for political and economic relations in history. The institutional
underpinning of this order made Americas power position both more durable
and less threatening to other statesrising, declining, or otherwise. It is the
order that came to dominate the global system for half a centurysurviving the
end of the cold war and other upheavals.
8

These multilateral institutions and security pacts are not simply func-
tional mechanisms that generate collective action. They also are elements of
political architecture that allow states within the order to do business with each
other. The liberal character of the international order provides access points
and opportunities for political communication and reciprocal infuence. In
effect, the political architecture has given the postwar order its distinctive lib-
eral hegemonic character. Rules, institutions, networks, and political relation-
ships are embedded in this order giving it its overall character: an open and
Fi:ing Fcwer: cnc G|cLc| ln:IiIuIicn: 11
expandable liberal order, one in which the powerful capitalist democracies are
tied together through alliances and governance institutions; an order that, more
so than in the past, is built around agreed-upon universal rules that allow access
and participation by a wide and growing array of states; and an order in which
the material benefts of the open system fow in all directions.
Sixth, these characteristics of the existing international order have implica-
tions for the rise of new states. Generally speaking, it is an order that is harder
to overturn and easier to join. It is harder to overturn for several reasons. The
removal of wars between great powers as a source of change in the international
system means that it is harder for rising states to wield power in pursuit of a
radically new set of rules and organizational principles of order. Change, by
necessity, becomes more incremental. Moments do not open up where declining
states are completely defeated and the old order rests in ruinsmoments that
in the past have given rising states incredible opportunities to recast rules and
arrangements of the international system. It is harder to push old and declining
states off the international stage. At the same time, the existing international
order is one in which the postwar advanced democracies are tied together in a
cooperative and durable complex political system. Past rising states confronted
individual great powers. Today, rising states confront not just the United States
but also a dense and expansive system of economic, political, and security
relationships. It is one thing to struggle against a specifc, powerful state. It is
another thing to struggle against an entire global way of life.
At the same time, the existing international order is easier to join. The
complexity and multifaceted features of this open and institutionalized system
provide multiple access points and pathways for integration. It is hard to shut
out new states that meet the requirements for participation, particularly in eco-
nomic and political governance areas. The WTO, for example, has specifc cri-
teria for membership. The universalistic features of these rules reduce the biases
and exclusions that might otherwise create problems regarding the integration
of rising states. The rules and principles of the existing system also provide
attractive tools for rising states, serving as a source of rule-based protection
against discrimination and exclusion. The same logic applies for the olderand
decliningmembers of the system. The liberal and rule-based character of the
international system turns the integration of new states into an incremental
12 G. Jchn lkenLerry cnc Ihcmc: WrighI
process of adjustment. The challenges to the existing order are not fundamental
but turn on less-monumental questions of rules and membership.
It is worth remembering that the postwar international order that newly
rising states confront is one that absorbed both Japan and Germany after the
warstates that became integrated and rose up to be the second and third most
powerful economies in the world. Mechanisms for dealing with these sorts
of power transitions exist. When the United States faced a rising Japan in the
1980s, it pushed Tokyo to open up and liberalize its economy. The United States
and Europe together invited Japan into intergovernmental groupings such as
the Organization for Economic Co-operation and Development (OECD) and
the G-7 process. Private sector groupssuch as the Trilateral Commission
and other business councilsalso sought to integrate Japan into the Western
economic order. Germany also has followed a postwar path of growth and
normalization as a great power by renewing its commitments to European
and Atlantic institutions. The leading states within this orderGreat Britain,
France, Germany, Japan, and the United Stateshave all experienced rising
and declining economic growth rates and military expenditures, but never have
these relative gains and losses in power triggered security competition or power
transition confict.
The upshot is that rising states today face both opportunities and constraints.
The process of institutional adjustment to these newly powerful countries will
necessarily be incremental. These power transitions are likely to be more peace-
ful and incremental today than in the past.
One caveat is in order, however. The development of a durable and fexible
system of global institutions has changed the historical assumptions about the
competitiveness and potential for confict inherent in a dynamic international
system, but this welcome change could reverse itself if the leading powers that
underpin the institutional order choose to withdraw their support and walk
away from it. Over the past decade, or more, some conservatives in the legisla-
tive and executive branches of government in the United States have pushed
for a wide-ranging disengagement from international institutions, including the
Small Arms Convention, the Comprehensive Test Ban Treaty, the Biological
Weapons Convention, and the Nuclear Non-Proliferation Treaty. A continua-
tion and intensifcation of this approach could result in a gradual but sustained
Fi:ing Fcwer: cnc G|cLc| ln:IiIuIicn: 13
deterioration in the international architecture, or even in its whole-scale col-
lapse. A likely result is that rising powers would lose faith in the reliability and
relevance of the guarantees and promises intrinsic to the international order in
its present form. Crucial stabilizers for cushioning power shifts would weaken
considerably.
InstItutIons and rIsIng states
We now will look at specifc issues and the variations in the challenges that
confront the integration of rising states into the global institutional order. We
have chosen to examine arguably the two leading institutions in the feld of
international security (the United Nations Security Council and the Nuclear
Non-Proliferation Treaty) and three in the feld of international econom-
ics (the International Monetary Fund, the World Bank, and the World Trade
Organization).
The UniTed naTions secUriTy coUncil
For the United Nations, and the United Nations Security Council (UNSC) in par-
ticular, it is the best and the worst of times. On the one hand, the UNSC is the frst
and preferred international forum for addressing international crises, as even its
staunchest critics now accept. On the other hand, its shortcomings and weaknesses
are serious and undeniable, ranging from the relative infuence of its member
states, which refects the world of 1945 rather than the world of the twenty-frst
century, to its failure to act effectively in severe crises (for example, Bosnia in the
early 1990s, Rwanda in 1994, and Kosovo in 1999). Recognizing in 2003 that
the United Nations was both in demand and in crisis, then-secretary-general Kof
Annan created a U.N. High Level Panel to recommend major reformnothing less
than a remaking of the basic bargains forged at San Francisco in 1945to equip
the United Nations for the twenty-frst century.
9

Security Council reform was a central component of the High Level Panels
wide-ranging recommendations. Two plans were put on the table. The frst
14 G. Jchn lkenLerry cnc Ihcmc: WrighI
would invite India, Japan, Brazil, Germany, and two African states to join the
Security Council as permanent members without a veto. The second plan would
achieve roughly the same membership, but through a regular system of rotating
members rather than the addition of new permanent members. Efforts to reach
agreement collapsed in 2006. At the heart of this failure was the inability of
the United Nations member states to reconcile the various dynamics thrown
up by the changing distribution of power in the international system, although
the story is much more complicated than the conventional narrative that rising
powers seek change while existing powers protect the status quo.
To begin to understand this failure and the future prospects for the United
Nations, it is important to discard the concept of a single BRIC bloc, not least
because Russia and China are permanent members of the Security Council,
whereas India and Brazil are not but covet such infuence. Instead, one can dis-
cern three general categories of major and mid-level powers (developing states
and small countries are a different matter entirely and are outside the remit of
this report), each with its own positions.
The United States is in a category by itself. It is the state most likely to
support direct action, whether in the form of sanctions or the use of military
power, in response to a crisisit was the driving force behind expelling Iraqi
forces from Kuwait in 1991, threatening war against the Democratic Peoples
Republic of Korea in 1994, sanctioning and bombing Yugoslavia/Serbia and
Iraq throughout the 1990s, launching a global war on terror after September
11, 2001, invading Iraq in 2003 following its purported violation of Security
Council resolutions, and seeking assertive action against the Iranian nuclear
program in 2007. The record of the United States strongly suggests that it has
an interest in facilitating the formation of international coalitions to support
direct action, the corollary of which means degrading the ability of other states
to thwart or delegitimize such coalitions.
Yet, in every one of the episodes mentioned above (except the 1991 libera-
tion of Kuwait and the 2001 invasion of Afghanistan), Russia and China either
opposed the United States or had to be persuaded into reluctantly facilitating
Americas preferred course of action. China, in particular, is hostile to any
developments, such as the responsibility to protect, that infringe upon tradi-
tional sovereignty. The current structure of the UNSC provides China and
Fi:ing Fcwer: cnc G|cLc| ln:IiIuIicn: 15
Russia with a veto and privileges these states over U.S. allies such as Germany
and Japan.
Thus, on the one hand the United States covets the legitimacy that comes
with UNSC approval, but on the other hand it is reluctant to do anything that
may make acquisition of that approval more elusive or to endow the UNSC with
additional infuence that may make its approval more important than it already
is. That America is of two minds has contributed to its reluctance to champion
UNSC reform for fear that change may actually make it more diffcult to secure
the support of the UNSC while also increasing its legitimacy and infuence.
The second category consists of the permanent members of the UNSC other
than the United States. These states are skeptical about UN Security Council
reform because it has the potential to dilute their infuence. Foremost in their
mind is that existing arrangements give them leverage over the United States.
Additionally, they cast a wary eye over those seeking to join their exclusive
club. U.S. allies France and Britain worry that their vetoes may be consolidated
into a single E.U. voice. China knows that accession of either Japan or India
to the UNSC would empower a potential rival; indeed, opposition to Japanese
accession to the UNSC remains a cornerstone of its UN policy. Accession of
Germany would be more palatable to China, and maybe even Russia, but even
then, Germany, as a NATO state, could be expected to vote with the United
States most of the time. Beyond their cares over the identity of new Security
Council members, China and Russia simply have less need to make sure the
Security Council is more effective than at present. Chinas most pressing secu-
rity concerns (Taiwan, access to energy, and a benign regional environment to
facilitate its rise) and Russias (arms sales and expanding its regional infuence)
will not be advanced by making the Security Council more effective.
The fnal category is the have-nots, those major and mid-level powers
who have a claim upon permanent representation on the UNSC. This includes
half of the BRIC groupIndia and Brazilbut also Germany and Japan and
a number of other smaller but still signifcant regional powers, such as South
Africa, Nigeria, and Indonesia. These states are keen advocates of Security
Council expansion for obvious reasons: it brings prestige, infuence, and bar-
gaining power, but little actual responsibility or commitment. However, the
designs of these states are not like the demands of revisionist powers in bygone
1 G. Jchn lkenLerry cnc Ihcmc: WrighI
eras. Unlike Wilhelmine Germany and imperial Japan, which became violent in
part because of their belief that they were deprived of their place in the sun,
these states are unlikely to become dangerously detached from the international
order if Security Council membershiptoday a major measure of prestigeis
not granted to them, for the simple reason that the status quo denies them
advantages they feel are rightfully theirs but it does not, as of yet, detrimentally
impact upon their vital interests.
Thus when one speaks of the challenge posed to the United Nations by
the shifting distribution of power, one is really talking about three challenges:
to ensure that the UNSC refects the distribution of power in the twenty-frst
century rather than the distribution of power at the end of World War II; to
reform the United Nations so that it addresses the legitimate concerns raised
by the U.N. High Level Panel and many member states; and to reconcile some
states desire for reform with others interest in the status quo. It should also be
noted at this point that there is a tension between effectiveness and enlargement
of the UNSC; many more members may simply mean greater deadlock and a
lower likelihood of agreement on resolutions. That is why consideration should
be given to having enlargement accompanied by reform of the veto mechanism.
The veto was granted to the fve permanent members of the UNSC in 1945. It
is often assumed that this occurred at the behest of both the United States and
the Soviet Union, but President Roosevelt actually granted the veto to Stalin at
Yalta as a concession; there was a great deal of unease on the American side
when it was later revealed, and the U.S. delegation at San Francisco spent much
of its time watering down Soviet proposals to strengthen it even further. The
Princeton Project on National Security has recommended replacing the veto
by a supermajority vote in circumstances pertaining to direct responses to an
ongoing crisis.
10
This would be one way of reconciling the tension between
enlargement and effectiveness. Other proposals should be considered also.
Why should the existing permanent member states agree to dilution of the
veto power? The United States, as noted above, is almost always the advocate
of direct action in response to a crisis and may be partial to reform of the veto
that would make UNSC approval more likely, if some procedures could be
worked out to ensure it would not impinge upon vital U.S. interests. Reform
of the veto could be accompanied by the accession of more democracies to
Fi:ing Fcwer: cnc G|cLc| ln:IiIuIicn: 17
the UNSC, and the need for a supermajority on a body composed largely of
democracies ought to provide suffcient guarantees that other powers could not
wield the new system against the United States. Even if they did, they would be
faced with the challenge of how actually to mount an effective intervention in
the face of U.S. opposition. If the United States supported reform of the veto, it
would make it considerably more diffcult for other permanent members, such
as Russia and China, to continue to oppose reform, particularly since a proposal
to democratize the UNSC would likely meet with strong approval from the
rest of the international community
The deadlock over U.N. reform stems in part from the relative weakness
of the United States and aspiring members of the UNSC to press for reform,
and the corresponding determination of those with a vested interest in the status
quo. Continuing inertia is likely to further alienate the United States from the
United Nations and lead to greater use of coalitions of the willing, with costs
for the legitimacy and effectiveness of U.S. action that such a course entails.
Charting a path forward must entail reversing this dynamic, both by consoli-
dating the reformist bloc and by extending a series of carrots and sticks to the
status quo powers.
The frst step is consolidation. The United States has been relatively reticent
about accession of new powers to the Security Council. The offcial position of
the Bush administration was limited to support for Japanese membership. The
United States could enlist more enthusiastic support for reform if it were to come
out squarely for expansion of the UNSC along the lines of either plan advanced
by the UN High Level Panel and described above. Such a move might galvanize
the international community and secure the support of reformist states for the
other reforms preferred by the United States.
The second step is to use carrots and sticks to persuade the status quo pow-
ers of the need for reform. UNSC membership gives China and Russia power
and prestige, but only as long as the United Nations remains relevant. The United
States could increase China and Russias interest in change by simultaneously
working to deepen cooperation in other forumswithin existing alliances such
as NATO, by deepening cooperation with other democracies, and so on. The
effect would be to signal that the United States prefers to work through the United
Nations, but that it also has other options should diplomatic efforts there fail.
18 G. Jchn lkenLerry cnc Ihcmc: WrighI
inTernaTional Financial insTiTUTions: The iMF and The World Bank
In Bangalore, India, in January 2007, the United Kingdoms longest serving
chancellor of the Exchequer, Gordon Brown, told his audience:
The postwar 1945 system of international institutionsbuilt for a
world of sheltered economies and just 50 statesis not yet broken, but
for a world of 200 states and an open globalization, is urgently in need
of reform. . . . The IMF and the World Bank are vital to the economic
stability and prosperity of the world. But they cannot be fully effective
unless they are modernized to refect the emerging world orderthe
IMF to ensure the stability of the whole world economy, with its pri-
mary role no longer to manage balance of payments crises but on crisis
prevention through the surveillance of our economies. . . . . And as a
bank for development, the World Bank should have a focus for the
frst time on energy security and environmental care.
11

Brown, one of the worlds most experienced international fnancial off-
cers, was giving voice to an increasingly accepted concern. The IMF and the
World Bank are beginning to face a moment of truth, which will decide whether
they are relevant or redundant. Of the two, the challenges facing the IMF are by
far the most severe.
The IMF faces a crisis of irrelevancy. The founding mission of the IMF is
redundant. The role the IMF adopted in lieu of its original tasks is also redun-
dant. Meanwhile, the international economy has given rise to a whole set of
new challenges that are largely unaddressed by international institutions.
The IMF was originally designed to serve as the central governing author-
ity to manage the international fnancial system by creating fxed exchange rates
and introducing controls on capital fows. However, as Mervyn King, the gov-
ernor of the Bank of England, has pointed out, in todays world the emergence
of vast fows of private, as distinct from offcial, capital means that current
account imbalances no longer pose a threat to the health of national economies
and are now the norm rather than the exception.
12
As King put it, The single
most important difference between the old world and todays world is that in
Fi:ing Fcwer: cnc G|cLc| ln:IiIuIicn: 1
the former, the fnancial position of a country was captured by the size of its
current account surplus or defcit; now the fnancial position is best measured
by the size and composition of its national balance sheet.
13
One could also add
a second difference: in the old world, Bretton Woods institutions spanned only
the free worldthe communist bloc remained outsidebut those same institu-
tions are near-universal now.
The IMF abandoned this founding mission following the collapse of the
Bretton Woods order in the 1970s and became for all practical purposes the
international lender of last resort. However, the widespread perception that the
IMF grossly mishandled the Asian fnancial crisis and the collapse of Russia
and Argentinas economies prompted governments to reduce, and even elimi-
nate, their reliance upon the IMF. Since the turn of the century, this shift has
accelerated dramatically, with demand for IMF loans dropping sharply, from
$107 billion at the end of 2003 to $35 billion in mid-2006. This development
is mirrored on the creditor side. For fscal year 2003, U.S. transactions with
the IMF amounted to a contribution of $74.85 billion; in fscal year 2006, it
declined to $7.92 billion.
14
Brazil, Argentina, Korea, the Philippines, Thailand,
and Indonesia have all moved to pay off their IMF debts well ahead of schedule.
Now, a loan to Turkey accounts for two-thirds of credit outstanding, leading
the Economist to rename the IMF the Turkish Monetary Fund.
15
Because the
IMF funds its operations out of the interest from its loansa perverse incentive
structure where the fund does well when the world economy does badlyit
now it faces a budget shortfall.
16
Meanwhile, the world has moved on. By far the most dramatic shift has
occurred with respect to the accumulation of global currency reserves, which
have soared from $2 trillion in 2001 to $4.7 trillion. Furthermore, stockpiles are
highly concentrated, with two-thirds of the worlds reserves held by six coun-
tries: China, Japan, Taiwan, South Korea, Russia, and Singapore.
17
A large part
of the rationale for this move is the determination on the part of governments to
be self-suffcient in a time of crisis. Moves are also afoot to establish alternative
sources of lending that will not involve the strict conditionality of IMF loans.
However, as central bank intervention in foreign exchange markets
increases, the IMFs traditional role in assessing the exchange rates of its mem-
bers may actually become more important. Although its efforts to date have
20 G. Jchn lkenLerry cnc Ihcmc: WrighI
been far from adequate, the IMF provides an obvious forum to consider con-
cerns that Chinese intervention gives it an unfair trading advantage in global
markets. No other multilateral institution has the capacity to declare if a cur-
rency is undervalued.
18
At another level, continuing and growing capital fows mean that actions
in one state that affect its economic fundamentals have serious effects on other
states. The anticipation of action and reaction becomes crucial to the effective
functioning and soundness of the global economy. At another level, states that
previously looked to the IMF for fnancing now look to alternative sources. The
mission of a revived IMF needs to be tailored to this new environment. It can
play an indispensable role by increasing transparency and the fow of informa-
tion about the spillover effects from one country to others, and by providing a
clearer assessment of external risks to domestic monetary policy objectives,
what in IMF jargon is called surveillance. This is a service that would be of
value to existing and rising power centers alike.
However, the IMF is unable to perform these functions as it is presently
constituted because it excludes states that are as important to the effective
functioning of todays global economy as Britain, the United States, and conti-
nental Europe were to the economy of the Bretton Woods era.
19
The European
Union either appoints or has a major say in appointing ten members of the
IMFs twenty-four-seat board. The United States began with 30 percent of the
vote and now has 17 percent following rolling adjustments. This still amounts
to a controlling stake, though with 85 percent approval required for action.
Meanwhile, China has one seat on the board and 3 percent of the total vote;
Belgium has 2.2 percent, even though Chinas economy is exponentially larger
than Belgiums economy.
20
As Lorenzo Bini Smaghi, an executive board mem-
ber of the European Central Bank, acknowledged, Europes inability to reduce
its number of representatives and speak with one voice creates tensions with
other major countries.
21
For its part, the United States has offcially recognized
that the IMFs legitimacy and effectiveness are steadily eroding and that
critical to maintaining the Funds legitimacy in many parts of the world is
reforming its governance structure to refect the growing importance of new
economies.
22
There have been some steps in the right direction. Reforms
agreed upon in Singapore in September 2006 will provide a greater voice to
Fi:ing Fcwer: cnc G|cLc| ln:IiIuIicn: 21
China, South Korea, Mexico, and Turkey, although the G20 has subsequently
failed to speed up the timetable for a voting rights overhaul.
23
The path forward in the IMF is relatively easy to identify if not to imple-
ment. Its days as the lender of last resort are over, due in no small part to its
own poor performance. Instead, it should quickly transition to a provider of
information and assessor of risk, as outlined above. Happily, it is a mission in
which all major economic powers interests coincide. The chief policy recom-
mendation, therefore, is for the United States to press its European allies to
collaborate with it in accelerating reform of the governance structures of the
IMF so that it is properly representative of the global economy of the early
twenty-frst century.
In terms of the World Bank, the challenge is less severe than with the
IMF, if only because the IMF is bereft of a mission, whereas the World Bank
is almost overwhelmed with tasks; its remit extends into sectors and countries
throughout the world. Nevertheless, there are serious issues of structure and
governance that need to be addressed.
One aspect to the World Banks future relates to its mission and
whether it is properly constituted to tackle it. The World Bank Group consists
of several institutions, including the International Bank for Reconstruction and
Development (IBRD), which provides, or used to provide, loans at market
rates to middle-income and well-off countries; the International Development
Association (IDA), which provides concessional fnancing to the worlds poor-
est countries; and the International Financial Corporation (IFC), which works
with the private sector. The IBRD has been decreasing in relevance as the
World Banks purpose has radically shifted from growth through trade and
investment to education, health, energy, the environment, and the elimination
of poverty. Some experts have recommended phasing out the IBRD side of the
bank and appointing a high-level commission to redesign the institution for its
new mission.
24
This should be seriously considered.
A second issue is control of the World Bank. Traditionally, the United States
and Europe have carved up control of the IMF and the World Bank between
them, with Europeans choosing one of their own for the president of the frst
and Americans deciding on the second. This means that the United States gets
the World Bank even though it possesses only 16 percent of the votes and other
22 G. Jchn lkenLerry cnc Ihcmc: WrighI
non-Western states are playing an increasing role in its operations. Moreover,
as Jeffrey Sachs has argued, the United States lags behind when it comes to the
best practices the World Bank seeks to promote, including support for the U.N.
Millennium Development Goals and achieving the U.N. target of 0.7 percent of
GDP for foreign assistance.
25
If the World Bank is to be credible and effective,
it is likely that reform of the mechanism to choose its president will have to be
a crucial part of its future.
the nuclear non-ProlIferatIon treaty
A clash of interests between BRIC states and the United States on the Nuclear Non-
Proliferation Treaty is likely to be a mirror image of the axiom that rising states seek
to revise the international order while current great powers protect the status quo.
The NPT is a grand bargain between the fve nuclear-weapon powers as of 1967
and the non-nuclear-weapon states.
26
The treaty legitimizes the nuclear arsenals of
the fve nuclear haves and prohibits the spread of nuclear weapons to other signa-
tory states. In exchange, the nuclear haves committed to move toward nuclear dis-
armament (Article VI) and guaranteed the right of the have-nots to acquire and use
civilian nuclear technology (Article IV). In recent years the NPT has come under
strain from two sources. First, changes in the fuel cycle and the greater availability
of technology mean that the acquisition of civilian nuclear technology brings a state
closer to a nuclear-weapon capacity than was the case at the time of the treaty. Thus,
Article IV is seen by some as a Trojan Horse, allowing non-nuclear-weapon states
legally to come within a couple of twists of a screwdriver of a bomb. Second, there
is a perception that the nuclear haves are not living up to their Article VI obligations,
either in terms of the ultimate goal of disarmament or in terms of the Thirteen
Steps that the article was codifed into in 2000.
It is important to understand that both China and Russia, along with the
United States, Britain, and France, enjoy privileged status under the NPT, while
India is not a signatory and has had its nuclear-weapon status effectively recog-
nized as legitimate by the United States in 2005.
27
Brazil once sought a nuclear
capacity but has since foresworn it and shows no signs of going back.
28
Therefore,
disenfranchisement in the non-proliferation regime is not a central concern of
Fi:ing Fcwer: cnc G|cLc| ln:IiIuIicn: 23
BRIC states in the way that it is for a country like Iran. Moreover, Chinas
status in the NPT legitimizes its nuclear weapons status while constraining
potential adversariesJapan, South Koreafrom going nuclear. Finally, there
is a sense that Russia and China appear less worried than the United States by
the prospect of a nuclear Iran; they may not like it, but appear willing to accept
it rather than run the grave risks associated with effectively containing the nega-
tive externalities of the NPTwhereby states can use Article IV to acquire a
capability that may bring them close to a weapons capabilitythrough the use
of punitive sanctions or military force. (Recently, there have been signs that
Russias attitude may be changing.)
29

The United States, by contrast, is extremely concerned about the spread
of nuclear weapons to states it deems hostile and has countenanced preventive
war to stop it.
30
Much of the criticism of the Iraq War is that weapons of mass
destruction were not found, not that war would have been illegitimate even
if Saddam had them. Similarly, a great deal of the opposition in Washington
to a military strike on Iran has to do with the assumption that Iran is several
years from acquiring the bomb and other options still exist, not that the mili-
tary option should be off the table even if it were the last resort and viable.
There is no signifcant constituency within the United States that is fully satis-
fed with the status quo of the NPT.
31
Instead, there are those who want reform,
and there are those who believe reform will fail and want to circumvent the
NPT by applying it solely to the have-nots while leaving the haves with a free
hand entirely.
32
The central demands of the reformers are revision of Article IV
to stipulate that no additional enrichment capability at reprocessing facilities
can be built except where they already exist, and that a credible international
regime be created to supply all states with low-level fssile materials at a low
price.
33

China and Russia have two central concerns about Americas dissatisfac-
tion with the status quo. On the one hand, they are worried that the United
States will seek to break out of the NPT framework and pursue a purely
counter-proliferation strategy emphasizing unilateral action, preventive war,
the development of new miniaturized nuclear weapons, and coalitions of the
willing, such as the proliferation security initiative. Such actions could have the
secondary effect of negatively impinging upon the national security interests
24 G. Jchn lkenLerry cnc Ihcmc: WrighI
of Russia and China in particular, and may lead to a new arms race. On the
other hand, China is resistant to radical reform in Article IV. China sees itself
as a leader of developing countriesthe so-called G77 and of the non-West.
These states believe that the NPT is already fundamentally unfair, since the
nuclear haves in general, and the United States in particular, have not lived up
to their side of the bargainand instead used the treaty to claim a permanent
advantage in a permanently two-tiered world. Why, they ask, should the United
States be allowed to deprive the nuclear have-nots of their enshrined rights?
Why should Article IV be up for renegotiation but not any other aspects of
the treaty? How, they wonder, could access to civilian nuclear materials be
guaranteed if domestic enrichment were to be banned, in light of the fact that
the United States routinely intervenes to persuade states not to trade with its
enemies? These developing states are unlikely to acquiesce easily in revision of
the NPT. China, in particular, will face a dilemmashould it risk breaking with
these natural allies or risk U.S. disengagement from the NPT?
In addition, even if revision of Article IV were successful, it would not stop
states like Iran, who want to develop their nuclear technology; instead, it would
provide greater international legitimacy to confront them, either through sanc-
tions or something else. This again raises the question of whether a proliferated
world is better than a world characterized by confict to prevent proliferation.
Thus far, it would appear that China, India, and Russia see a proliferated world
as a lesser evil than a world where the international community isolates and
confronts a series of states that seek the bomb; to the extent that radical reform
of the NPT may reduce the rights of the have-nots and could set the stage for
increasing pressure on proliferators, some states can be expected to resist such
reform. The result is likely to be an intensifcation of political confict between
the United States and status quo powers. This tension is likely to increase if
a Democrat replaces George W. Bush in the White House, because reform of
multilateral institutions would more likely be a central component of his or her
foreign policy.
Is there any room for compromise? Again, one way forward is for the
United States to use a mixture of carrots and sticks to secure the support of the
vast majority of nuclear have-nots for revision of Article IV. The carrot could
come in the form of a dramatic initiative to reduce Americas dependence on
Fi:ing Fcwer: cnc G|cLc| ln:IiIuIicn: 25
nuclear weapons through ratifcation of the Comprehensive Test Ban Treaty,
reduction of nuclear warheads to the hundreds rather than the thousands, and
reducing stockpiles of fssile materials on a global basis. Recently, Henry
Kissinger, George Schultz, William Perry, and Sam Nunn wrote that the United
States should work urgently toward a nuclear-weapons-free world, indicating
that there are grounds for believing that Democrats and Republicans can come
together in an initiative of this nature, a signifcant development, given the
fact that partisanship often jeopardizes deals that the president may strike.
34

The stick is what will happen if the NPT collapses entirely as a new round of
proliferation occurs. As Kissinger, Schultz, Perry, and Nunn put it, the United
States could be compelled to enter a new nuclear era that will be more precari-
ous, psychologically disorienting, and economically even more costly than was
Cold War deterrence. In such a world, preventive war and unilateralism could
become the norm rather than the exception.
The World Trade organizaTion
We write this report at a time of high drama and great risk for the World Trade
Organization. After appearing moribund in recent years, many had given up any
hope of a breakthrough in negotiations on the Doha Round of WTO talks, which
essentially pits the worlds wealthiest states against the worlds major develop-
ing economies, and hinges on the degree to which the former are willing to open
up their markets to the latter, particularly with respect to agriculture. However,
prospects for a successful resolution improved dramatically at the January 2007
gathering of global elites in Davos, Switzerland, when about thirty ministers
instructed their representatives to increase their efforts to strike a bargain.
35
Yet,
at the time of writing, in the winter of 2007, the glum mood returned, as in the
nine months following Davos negotiators largely failed to secure concessions
suffcient enough to create reasonable expectation of a deal. Moreover, domestic
politics in the worlds largest economy are delicately poised to shift the balance
of probability frmly against U.S. ratifcation of future free trade agreements.
One of the most serious obstacles to a healthy WTO lies within U.S.
domestic politics. Traditionally in the United States, the executive branch is
2 G. Jchn lkenLerry cnc Ihcmc: WrighI
pro-trade whereas Congress is skeptical, chiefy because of the infuence of geo-
graphically concentrated special interests. Thus, in order to conclude free trade
agreements, the United States government needs Trade Promotion Authority
(TPA), which is the right to send trade agreements to Congress in their entirety
for an up or down vote. Without this authority, opponents in Congress can kill
any agreement by procedure and amendment, preventing it from ever coming to
the foor for a decision. TPA passed in Congress by an extremely narrow margin
and under controversial circumstances in 2002. It expired in June 2007. The
mid-term elections of 2006 and the ongoing 2008 election campaigns strongly
suggest that it will not be reinstated in the forseeable future. Indeed, in the 2006
mid-term elections, a number of Democrats were elected on an explicitly protec-
tionist and populist platform; these are the so-called Lou Dobbs Democrats,
named after the CNN commentator who thunders nightly against free trade and
outsourcing.
36
Thus, for the foreseeable future, the White House, now and post-
2008, will be restricted in what it can achieve. While there was greater optimism
in early 2007 about the prospects for an agreement in the Doha round, it would
appear that substantial obstacles to the ratifcation of any deal will exist within
the United States. Moreover, failure to extend TPA is also likely to prevent
the ratifcation of new bilateral trade agreements along the lines of those the
Bush administration concluded with Australia, Singapore, Chile, Morocco, and
others.
The precarious future of TPA is symptomatic of a broader point: as China
and Indias economies grow, domestic pressures in the United States and other
Western economies for protectionist measures may also grow. While this may
rule out future agreements, it does not impact upon present arrangements. In
fact, the existing provisions of the WTO provide insurance against protectionist
politics to rising economies. The WTOs Dispute Settlement Mechanism has
received support in the United States, as evidenced by the Bush administrations
rollback of steel tariffs that it had itself imposed, after an adverse ruling from a
panel and from the Appellate Body, and has been frequently usedby new mem-
bers such as China and India.
37
Meanwhile, the WTO continues to expand. In November 2006 the United
States concluded a bilateral agreement with Russia, thirteen years in the mak-
ing, which paved the way for Russia to join the WTO sometime in 2008.
Fi:ing Fcwer: cnc G|cLc| ln:IiIuIicn: 27
Russia agreed to cut its tariffs on industrial and agricultural goods, to abide by
a binding blueprint on intellectual property rights, to extend quotas on U.S.
agricultural imports, and to accept 100 percent foreign ownership of banks. The
deal also makes it likely that the Jackson-Vanik amendment, the 1974 trade act
that subjects Russias trading status to annual review, will be repealed. Russias
accession to the WTO will constitute a major step in the integration of that state
into the global economy. Economic growth in Russia averaged nearly 7 per-
cent annually from 1999 to 2006, foreign direct investment tripled from 2003 to
2006, and the Russian economy now exceeds $1 trillion. American investment
in Russia increased by nearly 50 percent in 2006.
38
The World Bank estimates
that WTO membership could give the Russian economy a 3 percent boost in the
short term; it also could help the diversifcation of Russias economy beyond oil
and gas and assist the modernization of Russias aviation industry.
39
conclusIon
From the analysis of these fve institutions, one can draw a series of conclu-
sions. First, the idea that the United States has excluded or will exclude new
rising powers from its international order has little or no evidence to support
it. Historically, the United States has shown itself to be adept at coping with
the rise of new powers. After World War II, it created an international order to
facilitate the reintegration of defeated Axis powers and exhausted Allied powers
into the international system. The president of the United States, Franklin D.
Roosevelt, even insisted, in the face of considerable opposition from Winston
Churchill, to include Chinathen only a potential great poweras one of the
fve permanent members of the UNSC. (Indeed, it is worth contemplating what
our discussion of these issues would look like if China was currently excluded
from the UNSC.) Chinese acquisition of nuclear weapons was legitimized by the
NPTas Indias effectively was through a bilateral deal with the United States
approved in 2006.
40
Later, the Nixon administration took note of Chinas grow-
ing power and opened the door to normalized relations with it. China became a
member of the WTO in 2001 and Russia should join in 2008. The United States
supports revision of the voting rules in the IMF.
28 G. Jchn lkenLerry cnc Ihcmc: WrighI
Second, it is misleading and simplistic to say that rising powers favor
revision of international institutions and existing powers favor the status quo.
There are occasions when the United States is a strong advocate of reform,
but a rising power is more receptive to the view that the status quo is either
preferable or the least bad optionfor example, the recent situation with the
NPT and China. With respect to the UNSC, the major powers are uncertain
about their preferred course of action. When it comes to the World Trade
Organization, it is the United States and European powers that are resisting
reform in agriculture while developing states seek greater concessions from
the West. The IMF is a special case: developing states have lost faith in the
postBretton Woods mission of the IMF (that is, the IMF as the lender of last
resort) but both the West and rising economic powers have an interest in man-
aging the global economy in a way that can accommodate and cope with risk.
This diversity of state preferences with respect to institutions suggests that the
potential for bargaining and deal-making exists; perhaps the West could make
concessions on the WTO in exchange for movement on reform of security
institutions. However, there is little evidence that China, in particular, sees
these issues as equal; in other words, it is quite possible that China values the
status quo in the UNSC and NPT more than agricultural reform in the Doha
Round. Thus, while linkagethe idea of a grand bargain that encompasses
all major international institutionsdeserves consideration, it may well be
that the path forward lies in separate, careful negotiations on each individual
institution.
Third, to the extent that successive U.S. administrations foreign policy
becomes captured by national sovereigntist and neoconservative ideo-
logical factions, they are likely to let existing international institutions wither
on the vine and decline into irrelevance. This approach will probably gradu-
ally increase tensions between the United States and other powers over time
as America pursues a unilateralist path. However, a wide-ranging reform
initiative may also increase tensions with other states if there is disagree-
ment on the type of reform required or whether it is necessary at all. Thus, an
internationalist administration committed to the reform of the international
order may fnd itself engaged in diffcult and protracted negotiations with
rising powers. This is a high-stakes, and perhaps necessary, gambit that may
Fi:ing Fcwer: cnc G|cLc| ln:IiIuIicn: 2
result either in accelerated American alienation from these institutions in the
event of failure or a new lease on life for multilateralism if the negotiations
for reform succeed.
Fourth, many existing international institutions do not help BRIC states
solve their problems to the same extent that they help the United States solve its
problems. These institutions do enable BRIC states to guard against perceived
excesses on the part of the United Statesthis is particularly true of the UNSC
and the NPT. This begs the question: How will BRIC states deal with their
problems, especially those that require international cooperation? The answer
is that they are likely to turn to regional bodies, organizations, and groupings.
For China, these include the Shanghai Cooperation Forum, ASEAN plus three,
and various initiatives to create Asian-based alternatives to the IMF. These
regional institutions provide special advantages to BRIC states because they
can be shaped to refect their interests and preferences, rather than those of the
United States.
The United States also uses institutions with selective membership
NATO increasingly operates out of area and consideration is being given to
the creation of new institutions in East Asia. Some may perceive a danger that
selective institutions may create new zones of exclusion, with some powers
being shut out, meaning that they may be more prone to bouts of severe dis-
satisfaction with the international order. However, there are three reasons to
be optimistic. The frst is that no one country has a monopoly over selective
institutions. Indeed, as noted, both China and the United States are pursuing this
path to some degree, at the same time as both cooperate in other institutions.
Whats sauce for the goose is sauce for the gander. If either is particularly con-
cerned about these developments, they can come to some arrangement through
which the selective institutions that each country sponsors become universal
in nature on a reciprocal basis. The second reason is that as the number of
institutions expands, their memberships increasingly overlap and many remain
universal. Finally, in the same way that market forces make private-sector frms
more competitive, market pressures in international institutions may increase
effciency and effectiveness.
Fifth, one question remains unanswered: Will expansion and reform of
organizations to give a greater voice to non-Western powers compromise the
30 G. Jchn lkenLerry cnc Ihcmc: WrighI
core competencies of those organizations? In other words, is there a trade-off
between widening and deepening? There is ample evidence of such a dynamic
in the European Union. It may be even more acute in institutions where there
are built-in blocking mechanisms, such as the veto at the UNSC. If this were to
be replicated in international institutions, there may be a danger that Western
powers will be tempted to restrict membership and representation in order to
preserve the effectiveness of these institutions in addressing their concerns and
interests. One way to address this problem is to introduce multiple tracks within
international institutions, whereby if an inner track wants to deepen cooperation
they are free to do so with the understanding that others can choose to partici-
pate later if they wish. In addition, Western states may fnd that it is preferable
to accommodate the voices of rising states in informal groupings such as the G7
and the G20, where the sole purpose is to converse on matters of global impor-
tance, rather than to radically transform institutions with substantive missions
or voting mechanisms.
More generally, we conclude that our analysis of existing institutions
reveals that rising states already have a complex and substantial set of invest-
ments in the international order. They may wish these investments to provide
a greater yield or to appreciate at a faster rate than is presently the case, but
the very fact that they exist at all demonstrates that this instance of an interna-
tional order confronting rising states is different from previous iterations of this
phenomenon.
Fi:ing Fcwer: cnc G|cLc| ln:IiIuIicn: 31
notes
1. DominicWilson and Roopa Purushothaman, Dreaming With BRICs: The Path to
2050, Global Economics Paper No. 99, Goldman Sachs, October 1, 2003.
2. For examples of articles and studies that address this issue see Daniel Drezner, The
New New World Order, Foreign Affairs, March/ April 2007; National Intelligence Council,
Mapping the Global Future: Report of the National Intelligence Councils 2020 Project
(Washington, D.C.: GPO, 2004).
3. Robert Gilpin, War and Change in World Politics (New York: Cambridge University
Press, 1981), p. 9.
4. Ibid.
5. E. H. Carr, The Twenty Years Crisis, 1919-1939: An Introduction to the Study of
International Relations (New York: Harper and Row, 1964), pp. 20823.
6. Britain remained economically more advanced, but Germanys population was a third
larger than Britain and its advancing industrial economy allowed it to engage in a sustained
military arms build-up. See Paul Kennedy, The Rise and Fall of the Great Powers (New York:
Random House, 1987).
7. For a discussion of types of international order, see G. John Ikenberry, After Victory:
Institutions, Strategic Restraint, and the Rebuilding of Order after Major War (Princeton:
Princeton University Press, 2001).
8. See Ikenberry, After Victory; Geir Lundestad, The American Empire (New York:
Oxford University Press, 1990); and Charles S. Maier, Among Empires: American Ascendancy
and Its Predecessors (Cambridge, Mass.: Harvard University Press, 2006).
9. United Nations High-Level Panel on Threats, Challenges, and Change, A More Secure
World: Our Shared Responsibility, Stephen J. Stedman, ed. (New York: United Nations, 2004).
The High-Level Panel was composed of sixteen members from around the world, including a
former American national security adviser from the frst Bush administration.
10. G. John Ikenberry and Anne-Marie Slaughter, Forging a World of Liberty under Law:
U.S. National Security in the 21st Century (Princeton, N.J.: Princeton Project on National Security,
September 2006).
11. Right Honorable Gordon Brown, M.P., Speech at the Confederation of Indian Industry,
Bangalore, India, January 17, 2007.
12. Mervyn King, Reform of the International Monetary Fund, Speech at the India Council
for Research on International Economic Relations, New Delhi, India, February 20, 2006.
32 G. Jchn lkenLerry cnc Ihcmc: WrighI
13. Ibid.
14. Report to Congress on Financial Implications of U.S. Participation in the International
Monetary Fund, U.S. Department of the Treasury, (no date), Table 1, available online at http://
www.treas.gov/press/releases/reports/hp213_imf_report.pdf.
15. Funding the Fund, Economist, February 3, 2007.
16. Committee to Study Sustainable Long Term Financing of the IMF, Final Report,
January 31, 2007, available online at http://www.imf.org/external/np/oth/2007/013107.pdf.
17. Peter Garnham, All Eyes on Dollar Reserves: Chinas Stockpile of Dollars 1,000bn
Heightens Market Anxiety about the Risk of Forex Diversifcation, Financial Times, November
17, 2006, p. 23.
18. We are indebted to Brad Setser for this point.
19. Shawn Donnan, Camdessus Calls for Slimmed-Down IMF Board, Financial Times,
September 21, 2006, p. 3.
20. Playing Leapfrog, Economist, September 16, 2006.
21. Chris Giles, Plans for a Fundamental Reform of the IMF Were Approved Yesterday,
Financial Times, September 19, 2006, p. 8.
22. John Snow, Testimony of Treasury Secretary before the House Financial Services
Committee on the International Financial System and the Global Economy, May 17, 2006.
23. Raphael Minder, G20 Wrestles with IMF Votes Issue, Financial Times, November 20,
2006.
24. Jessica Einhorn, Reforming the World Bank, Foreign Affairs, January/February
2006.
25. Jeffrey Sachs, Its Time to Free the World Bank, Financial Times, March 22, 2005.
26. Treaty on the Non-Proliferation of Nuclear Weapons, text available online at http://www.
fas.org/nuke/control/npt/text/npt2.htm.
27. Joint Statement of President George W. Bush and Prime Minister Manmohan Singh,
available online at http://www.whitehouse.gov/news/releases/2005/07/20050718-6.html. This
deal was approved by the U.S. Congress in 2006.
28. Nuclear Tipping Point: Why States Reconsider Their Nuclear Choices, Mitchell Reiss,
Kurt Campbell, and Robert Einhorn, eds. (Washington, D.C.: Brookings Institution Press, 2004).
29. See President Putins address to the 2007 Munich Security Conference, available online
at http://www.securityconference.de/konferenzen/rede.php?sprache=en&id=179.
30. The Bush administrations position is the most dramatic manifestation of this, but the
sense that military action is sometimes justifable to prevent proliferation is shared across the
Fi:ing Fcwer: cnc G|cLc| ln:IiIuIicn: 33
political spectrum. In 1994, the Clinton administration went to the brink with the Democratic
Peoples Republic of Korea. A range of reports and studies by bipartisan and liberal groups rules
out a complete principled rejection of preventive military strikes. See Ivo Daalder, The Future
of Preemption, The American Interest, Winter 2005; The Stanford Group, Preventive Force:
Issues for Discussion, Hoover Institution, 2006, available online at http://www.wws.princeton.
edu/ppns/conferences/reports/pf_paper.pdf; and Ikenberry and Slaughter, Forging a World of
Liberty under Law.
31. There are scholars, including Stephen Walt and John Mearsheimer, who argue that the
United States will not be unacceptably threatened by the spread of nuclear weapons, but this view
is almost entirely absent in the political debate.
32. What we mean here is that those who wish to circumvent the NPT believe that its faws
mean the United States must not be bound by its own commitments such as ratifcation of the
Comprehensive Test Ban Treaty and instead should be free to pursue unilateralist alternatives.
33. For example, see George Perkovich, Jessice Tuchman Matthews, Joseph Cirincione,
Rose Gottenmoeller, and John Wolfsthal, Universal Compliance; A Strategy for Nuclear Security
(Washington, D.C.: Carnegie Endowment for International Peace, March 2005); The Challenge of
Proliferation; A Report of the Aspen Strategy Group, Kurt Campbell, ed. (Washington, D.C.: The
Aspen Institute, February 2005); and Ikenberry and Slaughter, Forging a World of Liberty under
Law.
34. George Schultz, William Perry, Henry Kissinger, and Sam Nunn, A World Free of
Nuclear Weapons, Wall Street Journal, January 4, 2007, p. A15.
35. Alan Beattie, Ministers Breathe Fresh Life into Doha Trade Organizations, Financial
Times, January 29, 2006, p. 6.
36. Jacob Weisberg, The Lou Dobbs Democrats: Say Hello to the New Economic Nation-
alists, Slate Magazine, November 8, 2006, available online at www.slate.com/id/2153271/.
37. For India and Chinas use of the Dispute Settlement Mechanism, see Julien L. Chaisse,
How Developing Countries Use the Dispute Settlement Understanding: Indian and Chinese
Standpoints, paper presented at The Doha Development Agenda: Cancun and After conference
at the Rajiv Gandhi Foundation, New Delhi, November 2003, available online at http://works.
bepress.com/julien_chaisse/14.
38. William J. Burns, WTO and U.S.-Russia Relations, Remarks of the U.S. Ambassador
to Russia to the American Chamber of Commerce, Moscow, November 28, 2006.
39. Ibid.
40. China joined the NPT in 1992.
34
G. John Ikenberry is the Albert G. Milbank Professor of Politics and
International Affairs at Princeton University in the Department of Politics and
the Woodrow Wilson School of Public and International Affairs. He is the
author of After Victory: Institutions, Strategic Restraint, and the Rebuilding
of Order after Major Wars (Princeton, 2001), which won the 2002 Schroeder-
Jervis Award presented by the American Political Science Association for the
best book in international history and politics. A collection of his essays, enti-
tled Liberal Order and Imperial Ambition: American Power and International
Order (Polity, 2006), was recently published, and he is currently writing a
book entitled Liberal Leviathan: The Origins, Crisis, and Transformation of
the American System (Princeton, forthcoming). He is the codirector of the
Princeton Project on National Security, and he is the coauthor, with Anne-Marie
Slaughter, of the projects fnal report, Forging a World of Liberty Under Law:
U.S. National Security in the 21st Century. He has served as a member of an
advisory group at the State Department in 2003-04 and was a member of the
Council on Foreign Relations Task Force on U.S.-European relations, the so-
called Kissinger-Summers commission.
Thomas Wright is a post-doctoral research fellow at the Princeton Institute
for International and Regional Affairs. He was previously senior researcher for
the Princeton Project on National Security and a pre-doctoral research fellow
at Harvard Universitys Belfer Center for Science and International Affairs.
He received his PhD from Georgetown University, an MPhil from Cambridge
University, and a BA and MA from University College Dublin. He has been
published in the American Political Science Review, the Washington Post, and
other newspapers.
About the Authors