Defending supremacy: how the IMF and the World Bank navigate the challenge of rising powers

It is widely acknowledged today that the rise of new powers in the global economy has failed to produce commensurate adjustments in the architecture of global economic governance. How, then, do established multilateral organizations navigate the challenges arising from growing multipolarity? The article tackles this question by examining recent International Monetary Fund (IMF) and World Bank practice. It argues that, resistant though the Bretton Woods twins are to comprehensive reform, they nonetheless employ mechanisms to cope with the new realities on the ground. However, this adaptation lacks a cohesive strategy, and on balance remains insufficient. The analysis launches from a discussion of the normative, operational and competitive challenges the Fund and Bank face. It then discusses three coping mechanisms the organizations have employed over the past decade: 1) bolstering operations in low-income countries (LICs) and small middle-income countries (MICs); 2) adopting a flexible approach towards large MICs and in particular emerging powers to retain them in the organizations’ client portfolio; and 3) reinforcing and refining non-lending activity to preserve normative authority. The effectiveness of these adaptive efforts in addressing the challenges of multipolarity is variable, comprising a mix of modest gain, abject failure and untested promise. Implications for the organizations’ efficacy also remain uncertain. Even then, these initiatives highlight the twins’ willingness to defend their institutional supremacy in a fast-changing global system. Crucially, they also harbour important signs of change in how ‘development’ is perceived and practised in the strongholds of western multilateralism.