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Yves here. Some readers are likely frustrated at my regularly raining on the BRICS/multipolarity party. But we believe in steely realism. Even though we agree with the desirability of a shift to a more equitable global order, most anti-globalists are acting like cheerleaders and are glossing over the considerable obstacles to getting there. We’ve repeatedly highlighted that BRICS has effectively acknowledged that in the 2024 Kazan and 2025 Rio conference statements. Rather than calling for new international institutions, these documents reaffirmed the importance of the IMF as bailouter in chief, the UN, and the World Bank, and simply expressed a desire that the representation in these organizations more closely reflect the weight of GDP and population distributions.
The post below explains how that sort of campaign is going nowhere at the World Bank. We have explained how it will never get anywhere at the IMF and gave a longer form account in a recent post, “BRICS Are the New Defenders of Free Trade, the WTO, the IMF and the World Bank” and Supporting Genocide by Continuing to Trade with Israel. Here is the key section on the IMF:
But the IMF is extremely unlikely to get away from US control. As CADTM pointed out last year:
The USA by itself is entitled to an Executive Director who controls a 16.49% share of voting rights – keeping in mind that important votes require an 85% majority. This means that the USA is the only country that has veto power.
That article also describes in detail how giving sub-Saharan Africa an Executive Directorate was mere optics and was not making the IMF more democratic.
Having said that, the new world order promoters face an extremely difficult problem. The US was able to set up an international institutional architecture after World War II because it represented over half of global GDP and the other pretenders to leadership has been devastated by the conflict. It is close to impossible to get from A to B in the absence of a hegemonic power. China has attempted to dominate on certain important issues, such as positioning the renminbi to become the critical trade currency in BRICS efforts to advance non-dollar trade and set up new payments systems (how to do that in the absence of stepping up to reserve currency obligations, as in dropping capital controls and running persistent enough trade deficits so as to get the renminbi widely held abroad are additional big obstacles). India has persistently resisted this push and Chinese dominance generally. And that’s before getting to other herding cats issues, that even as big a group as BRICS is now has enough diversity of interests to make it hard to agree on anything beyond apple pie and motherhood principles. So that conundrum leaves the lowest common denominator fallback of a hostile takeover of Western/advanced economy institutions. As we can see, that is not going to happen quickly or easily.
A further observation: IMHO the article below says unduly nice things about the World Bank. Yes, it could be a very important positive force. But I am skeptical that it has been one. For instance, it was the International Finance Corporation (an World Bank entity) that lobbied developing economies to set up capital markets, which among other things made them vulnerable to hot money inflows and outflows. See the 1997 Asian crisis for an example of the effects: an influx of money producing domestic bubbles that then implode when the foreign investors pull out. I am sure development-expert readers can add to the list of bad effects, but that illustration alone gives an idea.
By Jakob Vestergaard, Associate Professor, Roskilde University and Robert Wade, Professor of Global Political Economy , Department of International Development, London School of Economics. Originally published at the Institute for New Economic Thinking website
hen finance ministers, central bankers, and development officials gather in Washington for the World Bank and IMF Annual Meetings (13–18 October 2025), they will confront a familiar but unresolved issue: how to bring the governance of the Bank into line with today’s global economy. Once again, a scheduled shareholding review—this time the long-awaited 2025 round—finds itself mired in stalemate, as we detail in our new INET Working Paper.
For nearly eight decades the Bank’s principle has been clear: countries’ voting power should “largely reflect their relative weight in the world economy.” Yet today, the mismatch between economic reality and political representation is wider than ever. China, India, and Indonesia—three of the four most populous nations—remain spectacularly underrepresented, while several European states with much smaller economies enjoy disproportionately large influence.
Fifteen Years of “Voice Reform”
The World Bank embarked on a reform process in 2008–2010, which shifted just under five percentage points of voting power from advanced to developing and transition countries (DTCs). At the time, leaders promised this was only a beginning: future reviews, scheduled every five years, would continue the rebalancing.
But subsequent rounds have fallen flat. The 2015 review produced little more than a statement of principles (the “Lima Principles”). The 2018 reform raised hopes, but was ultimately a missed opportunity, delivering a shift of only 0.5 percentage points. The 2020 review, undertaken in the shadow of the pandemic, produced no change at all. Now, in 2025, Bank shareholders once again confront the question of whether this process is genuine reform—or ritual.
The Geopolitics of Obstruction
Why is progress so limited? Part of the answer lies in the geopolitical rivalry between the United States and China, which has hardened dramatically over the past decade. Washington insists that any meaningful increase in China’s shareholding is unacceptable, lest it provide Beijing with greater influence over the world’s premier development finance institution. Many European governments, anxious not to upset the US, quietly align with this position.
Japan, too, resists, determined not to see China overtake its number two voting share—a symbolic marker of regional status. Meanwhile, France and the UK deploy creative shareholding accounting to cling to their privileged single seats on the Board of Executive Directors.
These positions reflect a deeper reality: the Bank remains seen by its dominant shareholders as a Western-led institution. As one Executive Director put it bluntly, “The Bank is first and foremost a bank. Since when do the customers control a bank?”
Institutional Lock-In
Yet geopolitics is only part of the story. The Bank’s Articles of Agreement give each member a “preemptive right” to maintain its shareholding in any capital increase. This means any country facing dilution can refuse and insist to maintain its previous share (and of course it then has to pay to “subscribe” to those additional shares). In practice, this enshrines the status quo: genuine realignment is almost impossible without near-unanimous agreement.
The result is a cycle of exhaustive negotiations that produce only fractional adjustments, which are hailed as progress. Meanwhile, the gap between rhetoric (“equitable voting power”) and reality grows wider.
Three Scenarios for 2025
Looking ahead to the October meetings, three broad scenarios are on the table:
1. Worst-case: The US blocks any meaningful change, other G7 allies fall in line, and even symbolic reforms (such as raising the “basic votes” of small countries) stall. This would mirror the IMF’s 2023 quota review, which essentially delivered nothing.
2. Modest reform: To avoid another outright failure, shareholders agree on a limited increase in basic votes for low-income members and a general proportional capital increase. This would be more symbolic than substantive—but could be presented as progress.
3. Best case: Shareholders adopt a new institutional design based on the combination of “misalignment limits” (e.g., no country’s voting share should deviate more than 20 percent from its calculated shareholding) coupled with “responsible shareholding,” requiring large shareholders (including China) to contribute regularly to the Bank’s concessional arm (IDA). Shareholders also move toward an open and competitive process for selecting the Bank’s President. Such a deal would require a grand bargain between Washington and Beijing, with China accepting greater financial obligations in return for increased voting rights.
The Stakes
If the Bank fails again to deliver, the consequences go beyond internal governance. The institution risks further erosion of its legitimacy as the world’s premier multilateral development bank. At a time when global challenges—including debt distress, fragile states, climate change, cross-border conflict —demand coordinated action, a perception that the Bank is stuck in the 20th century geopolitics of Western dominance could accelerate moves by emerging powers to channel resources into alternative institutions.
The irony is that reform would serve not only the interests of China, India, and other underrepresented economies, but also those of the Bank’s traditional shareholders. A governance structure more reflective of today’s multipolar economy would strengthen the Bank’s credibility and relevance. Conversely, blocking reform to maintain Western control may secure influence in the short run but undermine the institution in the long run.
Conclusion
The 2025 Annual Meetings (13–18 October) may well prove to be another missed opportunity. Yet they could also mark a turning point. For the World Bank to retain its standing as a truly multilateral institution, it must break free of the structural constraints and geopolitical vetoes that have paralyzed reform.
The alternative is grim: a governance system increasingly out of step with the world it purports to represent, and a Bank whose claim to global leadership rings increasingly hollow.
