Imperfect adaptation: how the WTO and the IMF adjust to shifting power distributions among their members
How do international institutions adjust to shifting power distributions among their members? We argue that institutional adaptations to the rise of emerging and the decline of established powers are different from what power transition theories (PTTs) would lead us to believe. Institutional adaptations are not impossible, as pessimist PTT variants hold; and they are rarely easy to attain, let alone perfect, as optimist PTT variants imply. To bridge the gap between these versions of PTT, we propose an institutionalist power shift theory (IPST) which combines insights on the conditions and mechanisms of institutional change from functionalist, historical and distributive variants of rational institutionalism. IPST claims that institutional adaptations will succeed or fail depending on whether or not emerging powers are able to undermine the international institution and to make credible threats to this effect. To demonstrate IPST's plausibility we analyze: (1) how India and Brazil gained the agreement of established powers to their membership in the WTO core negotiation group "Quad" which had previously been dominated by developed countries; and (2) how China reached agreement with established powers on (more) even handed surveillance of IMF members' financial stability, which, up to then, had focused on developing countries and exchange rate issues.