The Asian Infrastructure Investment Bank

The Construction of Power and the Struggle for the East Asian International Order

M. Wan

• Publisher: Palgrave Macmillan
• Year: 2016
• ISBN:
  9781137593870
• Topic: Politics & International Relations
• Subtopic: International Relations
• Index: Politics & International Relations

This book assesses the strategic significance of the Asian Infrastructure Investment Bank (AIIB) by examining the logic of international power and order, historic trends in East Asian international relations, the AIIB's design in comparison to 'rival' financial institutions such as the World Bank and the Asian Development Bank, recent tendencies in Chinese foreign policy, and the Chinese system of political economy. It focuses on how China 'constructs' international arrangements at a critical juncture in history compared to other great powers, especially the United States and Japan. Viewed in isolation, the AIIB does not represent a radical departure from the existing international order; it is a hybrid institution built on China's integration into the West-dominated international structure and conditioned by the global financial market. But the AIIB does draw in part from a different institutional lineage, a different historical root, and a different national system of political economy. In this context, China's greater success will constitute a partial change to the existing international order, whatever the Chinese intention.

1

Power, Order and Biogeography

Abstract: Wan examines the theories of power and international order, the relationship between global finance and sovereign states and a broader scientific field of biogeography. The AIIB is a power move by a rising great power vis-à-vis the status quo superpower. Wan provides an alternative but unified framework to analyze power. Logically and empirically, power can be both goal and means. He follows a biogeographical approach that emphasizes evolving processes rather than simply action and reaction in a mechanical fashion. Evolution exerts pressure on the content and intensity of power. He also argues that power is both intrinsic and observer-relative. Power is partially a social construction. We should focus on what seems to come ‘natural’ for the players in international relations.

Keywords: AIIB; biogeography; global finance; order; power; social construction

Wan, Ming. The Asian Infrastructure Investment Bank: The Construction of Power and the Struggle for the East Asian International Order. New York: Palgrave Macmillan, 2016. DOI: 10.1057/9781137593870.0005.

Why should anyone care whether China or any country wants to take a leading role in helping other countries construct highways, ports or power plants? Before I answer that question, I simply want to point out that people do care, which is why I am writing this book. Whether they should, we know that political actors care about power and influence associated with development finance. Thus, we need to understand the concept of power and preferred international order based on both power and larger purposes.

This chapter provides what I think is an appropriate analytical framework for the AIIB. The AIIB is necessarily unique but we need to understand what the underlying forces driving it are, which should also be applicable for looking at other international relations issues. I have written this book because I want to make a larger point based on my critique of the prevailing approaches to international relations. But because this is a fast book, I will not engage in theoretical discussion in great detail. Rather, I will adopt a need-based approach.

The chapter examines the concept of power, the theory of international order, the relationship between the global financial market and the sovereign state, and briefly a broader scientific field of biogeography. The US-China rivalry is fundamentally about the rules of the game for Asia. The theory of international order thus provides an appropriate analytical framework.

The dual nature of political power

The AIIB has garnered so much attention because it is viewed as a power move by a rising great power vis-à-vis the status quo superpower. Is there a real power dynamic involved here? To answer this question, we need to understand better what power really is.

Power is arguably the foundational concept of Political Science (PS) and International Relations (IR). But as Philippe Schmitter has rightly pointed out, much of current research in International Political Economy (IPE) focuses on voluntary exchange of information, aggregation of individual preferences and rational design of institutions, neglecting power as the micro-foundation that differentiates PS from other disciplines.¹

IPE scholars have neglected power partly because it is notoriously difficult to define and measure, unlike market transactions. Mainstream IR scholars have gone through three stages of conceptualizing power. In what some scholars call the prescience stage, power was understood intuitively as it had been since before history. In the second stage, coinciding with the behavioral revolution in Political Science some scholars began to emphasize a precise definition and measure of power as an analytical concept starting around 1950. A backlash emerged later due to an assessment of limited progress made. Some would point out that we should not treat power as atomistic.² What is a valid indicator of power in one period time may not be so in other periods. In the third stage, rational choice has gained increasing influence in the discipline but power is less emphasized in that framework.

Scholars have come to understand various aspects of power. We know, for example, that power has different dimensions. Power assets may not translate into actual influence. What is power in one area may not be fungible in another. And we need to understand intention as well as capacity.³ Fully aware of all these conceptual and measurement challenges, most IR scholars now adopt a pragmatic approach to power.⁴

In the following paragraphs, I will seek to provide an alternative but unified framework to analyze power. To do so, I will go back to the early studies of power when IR was emerging as a discipline in the United States. Students who have studied IR theory should know the apparent logical deficiency in Hans Morgenthau’s conceptualization of power. Morgenthau, who aimed at making IR a scientific field, defined national interest in terms of power.⁵ Power is a relationship or more precisely ‘man’s control over the minds and actions of other men’.⁶ I learned early on in graduate school that Morgenthau had supposedly erred by confusing power as end with power as means. Put simply, power cannot be both goal and instrument.

Yet my research and observation for the past two decades has led me to the conclusion that Morgenthau’s duality is intuitively more useful than the later conceptualizations of power. Logically and empirically, power can be both goal and means. Since power is highly desirable and necessary, it makes sense that countries would want power. An analogy is people pursuing wealth that can be used for achieving other objectives. I am not concerned about the supposedly tautological problem. Power pursued and power exercised are often not the same and they occur at different points in time. More importantly, I follow an evolutionary approach, which means that I use constitutive causality rather than linear causality. Linear causality matches variation in the independent variable and the dependent variable. However, from a biological perspective, international relations are a ‘living thing’ and our attention should be paid to evolving processes as well as internal changes rather than simply action and reaction in a mechanical fashion.⁷ Empirically, we know that countries pursue power as national goal, which has certainly been the case in Northeast Asia.

Scholars who emphasize power typically follow the realist approach. Realists have recognized the balance of power as a principal mechanism in international relations. There are also other mechanisms such as balance of threat and bandwagoning. Yet an evolutionary approach offers a wide variety of types of relationships. Scientists have identified the following cooperative or competitive interactions between populations within an ecosystem: protocooperation, mutualism, commensalism, competition, amensalism and predation. Protocooperation refers to nonobligatory mutual gains between two populations. Mutualism is obligatory mutual gains. Commensalism means that one population gains while the other population is unaffected. Competition refers to an interaction that impedes one another. Amensalism means one population is impeded and the other not. Predation happens when one population kills and eats the other. To minimize competition, populations may diversify or partition energy requirements and evolve to avoid direct competition. Spatial competition also allows good-dispersers-but bad competitors to coexist with bad-dispersers-but good competitors by spreading first into unoccupied territories.⁸

There should be more types of interaction in the human world. However, we should then immediately see a potential problem of excessive complexity. Indeed, Michael Mann maintains that ‘Human beings are restless, purposive, and rational, striving to increase their enjoyment of the good things of life and capable of choosing and pursuing appropriate means for doing so. These human characteristics . . . are the original source of power’.⁹ The more I think about international relations the more I agree with Mann’s assertion. However, I differ from Mann in whether a general theory may be achieved. Mann reasons that ‘goal-oriented people form a multiplicity of social relationships too complex for any general theory’.¹⁰ Rational choice scholars certainly would argue that they have a scientific theory based on the very fact that humans are goal-oriented. I adopt an evolutionary approach, which is a proven scientific way of thinking about the living world.

Mann himself rejects evolution as an appropriate approach to studying societies. His objection comes mainly from the conviction that societies do not necessarily develop into a higher form.¹¹ However, evolution is not meant to be teleological, as Charles Darwin and others have made it clear. As philosopher John Searle has pointed out, ‘one of Darwin’s greatest achievement was to drive teleology out of the account of the origin of species’.¹² Indeed, evolution may lead to ‘lower forms’ that fit better in a given ecosystem. Mann also observes that although we can apply evolution to the Neolithic Revolution, the theory has become irrelevant once our ancestors could no longer evade from power the way prehistorical hunters and gathers with loose social ties supposedly could.¹³ I maintain that logically one can turn Mann’s argument on its head and suggest that power accelerates evolution. Whether evolution still applies to our societies is also an empirical question.

Pure balance of power is rare. Other relationships are more prominent through a longer historical lens. As a case in point, a most interesting relationship is that of symbiosis between different players located in different ecological niches. After an exhaustive study of early empires throughout the world, Mann offered a general pattern: ‘[a] regionally dominant, institution-building, developing power also upgrades the power capacities of its neighbors, who learn its power techniques but adapt them to their different social and geographical circumstances’.¹⁴ The nomadic empires needed successful pedantic empires to grow and succeed because...

Table of contents

• Cover
• Title
• 1  Power, Order and Biogeography
• 2  The East Asian International Orders
• 3  The AIIB Tied in a Belt
• 4  The AIIB versus the World Bank and the ADB
• 5  A New Hegemonic Order in Asia?
• Appendix
• Select Bibliography
• Index