Hostname: page-component-7479d7b7d-m9pkr Total loading time: 0 Render date: 2024-07-14T04:39:30.377Z Has data issue: false hasContentIssue false

Explaining Foreign Support for China's Global Economic Leadership

Published online by Cambridge University Press:  10 June 2020

Get access


We analyze the factors that increase the likelihood that other nations will follow China's global economic leadership. While our theoretical framework incorporates the conventional argument that China pulls in followers with economic benefits, we focus on grievances with the current global order that have the effect of pushing countries toward the rising new leader. We find that grievances about global financial instability are particularly important push factors. Our results show that countries that have experienced more financial crises, more variable capital account policies, more volatile portfolio capital outflows, and more social unrest during IMF programs are more likely to support China's global leadership than leaders of nations that have been less exposed to these problems. We find no evidence that grievances about global governance, or grievances about discriminatory US trade policies, are related to foreign support for China's global economic leadership. Overall, our evidence is consistent with the interpretation that leaders want to reform and preserve the WTO and the IMF, which have worked reasonably well for them under US leadership. At the same time, they have incentives to follow China's economic leadership on global capital flows, emphasizing long-term infrastructure and development finance over short-term flows which, under the current order, have imposed large costs on many economies.

Research Article
Copyright © The IO Foundation 2020

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)


Aizenman, Joshua, and Sengupta, Rajeswari. 2013. Financial Trilemma in China and a Comparative Analysis with India. Pacific Economic Review 18 (2):123–46.CrossRefGoogle Scholar
Asian Development Bank. 2018. Meeting Asia's Infrastructure Needs. ADB Special Report.Google Scholar
Bailey, Michael A., Strezhnev, Anton, and Voeten, Erik. 2017. Estimating Dynamic State Preferences from United Nations Voting Data. Journal of Conflict Resolution 61 (2):430–56.CrossRefGoogle Scholar
Bartels, Larry M. 2014. Ideology and Retrospection in Electoral Responses to the Great Recession. In Mass Politics in Tough Times: Opinions, Votes and Protest in the Great Recession, edited by Bartels, Larry M. and Bermeo, Nancy, 185223. Oxford University Press.CrossRefGoogle Scholar
Bird, Graham, Mandilaras, Alex, and Popper, Helen. 2012. Is There a Beijing Consensus on International Macroeconomic Policy? World Development 40 (10):1933–43.CrossRefGoogle Scholar
Bird, Graham, and Rowlands, Dane. 2006. IMF Quotas: Constructing an International Organization Using Inferior Building Blocks. Review of International Political Economy 1:153–71.Google Scholar
Borst, Nicholas, and Lardy, Nicholas. 2015. Maintaining Financial Stability in the People's Republic of China During Financial Liberalization. Peterson Institute for International Economics Working Paper no. 15-4.CrossRefGoogle Scholar
Chad P., Bown, and Prusa, Thomas J.. 2010. US Antidumping: Much Ado About Zeroing. World Bank Policy Research Working Paper no. 5352.CrossRefGoogle Scholar
Broto, Carmen, Díaz-Cassou, Javier, and Erce, Aitor. 2011. Measuring and Explaining the Volatility of Capital Flows to Emerging Countries. Journal of Banking and Finance 35 (8):1941–53.CrossRefGoogle Scholar
Broz, J. Lawrence. 2008. Congressional Voting on Funding the International Financial Institutions. Review of International Organizations 3 (4):351–74.CrossRefGoogle Scholar
Broz, J. Lawrence. 2011. The United States Congress and IMF Financing, 1944–2009. Review of International Organizations 6 (3):341–68.10.1007/s11558-011-9108-7CrossRefGoogle Scholar
Bruno, Valentina, and Shin, Hyun Song. 2015. Capital Flows and the Risk-Taking Channel of Monetary Policy. Journal of Monetary Economics 71 (C):119–32.CrossRefGoogle Scholar
Buira, Ariel, and Ocampo, José Antonio. 2005. The Bretton Woods Institutions: Governance Without Legitimacy? In Reforming the Governance of the IMF and the World Bank, edited by Buira, Ariel, 744. Anthem Press.CrossRefGoogle Scholar
Chinn, Menzie D., and Ito, Hiro. 2007. A New Measure of Financial Openness. Journal of Comparative Policy Analysis 10 (3):309–22.CrossRefGoogle Scholar
Cruz, Cesi, Keefer, Philip, and Scartascini, Carlos. 2016. Database of Political Institutions Codebook, 2015 Update DPI2015. Inter-American Development Bank.Google Scholar
Dreher, Axel, Sturm, Jan-Egbert, and Vreeland, James. 2009. Global Horse Trading: IMF Loans for Votes in the United Nations Security Council. European Economic Review 53 (7):742–57.CrossRefGoogle Scholar
Eichengreen, Barry, and Gupta, Poonam. 2015. Tapering Talk: The Impact of Expectations of Reduced Federal Reserve Security Purchases on Emerging Markets. Emerging Markets Review 25 (December):115.CrossRefGoogle Scholar
Funke, Manuel, Schularick, Moritz, and Trebesch, Christoph. 2016. Going to Extremes: Politics After Financial Crises, 1870–2014. European Economic Review 88 (C):227–60.CrossRefGoogle Scholar
Hall, Todd, and Keren Yarhi-Milo, 2012. The Personal Touch: Leaders’ Impressions, Costly Signaling, and Assessments of Sincerity in International Affairs. International Studies Quarterly 56 (3):560–73.CrossRefGoogle Scholar
Henning, C. Randall. 2002. East Asian Financial Cooperation. Policy Analyses in International Economics no. 68. Peterson Institute for International Economics.Google Scholar
Holmes, Marcus. 2013. The Force of Face-to-Face Diplomacy: Mirror Neurons and the Problem of Intentions. International Organization 67 (4):829–61.CrossRefGoogle Scholar
Jordà, Oscar, Schularick, Moritz, and Taylor, Alan M.. 2013. When Credit Bites Back. Journal of Money, Credit and Banking 45 (2):328.CrossRefGoogle Scholar
Kastner, Scott L., and Saunders, Phillip C. 2012. Is China a Status Quo or Revisionist State? Leadership Travel as an Empirical Indicator of Foreign Policy Priorities. International Studies Quarterly 56 (1):163–77.CrossRefGoogle Scholar
Kose, M. Ayhan, Prasad, Eswar S., Rogoff, Kenneth, and Wei, Shang-Jin. 2009. Financial Globalization: A Reappraisal. IMF Staff Papers 56 (1):862.CrossRefGoogle Scholar
Laeven, Luc, and Valencia, Fabian. 2018. Banking Crises Revisited. IMF Working Paper. WP/18/206 Strategy, Policy, and Review Department (September).CrossRefGoogle Scholar
Lansford, Tom, ed. 2017. Political Handbook of the World 2016–2017. CQ Press.CrossRefGoogle Scholar
Lardy, Nicholas, and Douglass, Patrick. 2011. Capital Account Liberalization and the Role of the Renminbi. Peterson Institute for International Economics Working Paper no. 11-6.CrossRefGoogle Scholar
Lavelle, Kathryn C. 2011. Legislating International Organization: The US Congress, the IMF, and the World Bank. Oxford University Press.CrossRefGoogle Scholar
Lebovic, James H., and Saunders, Elizabeth N.. 2016. The Diplomatic Core: How the United States Employs High-Level Visits as a Scarce Resource. International Studies Quarterly 60 (1):107–23.CrossRefGoogle Scholar
Lipscy, Phillip Y. 2015. Explaining Institutional Change: Policy Areas, Outside Options, and the Bretton Woods Institutions. American Journal of Political Science 59 (2):341–56.CrossRefGoogle Scholar
Lipscy, Phillip Y. 2017. Renegotiating the World Order: Institutional Change in International Relations. Cambridge University Press.CrossRefGoogle Scholar
Lipscy, Phillip Y., and Lee, Haillie Na-Kyung. 2019. The IMF as a Biased Global Insurance Mechanism: Asymmetrical Moral Hazard, Reserve Accumulation, and Financial Crises. International Organization 73 (1):3536.CrossRefGoogle Scholar
Lu, Hui, Rohr, Charlene, Hafner, Marco, and Knack, Anna. 2018. China Belt and Road Initiative: Measuring the Impact of Improving Transportation Connectivity on Trade in the Region. Rand Corporation.CrossRefGoogle Scholar
McManus, Roseanne W. 2018. Making It Personal: The Role of Leader-Specific Signals in Extended Deterrence. Journal of Politics 80 (3):982–95.CrossRefGoogle Scholar
Mian, Atif, Sufi, Amir, and Trebbi, Francesco. 2014. Resolving Debt Overhang: Political Constraints in the Aftermath of Financial Crises. American Economic Journal: Macroeconomics 6 (2):128.Google Scholar
Miranda-Agrippino, Silvia, and Rey, Hélène. 2015. US Monetary Policy and the Global Financial Cycle. NBER Working Paper no. 21722. Revised in February 2018.CrossRefGoogle Scholar
Mishra, Prachi, and Rajan, Raghuram. 2019. International Rules of the Monetary Game. In Currencies, Capital, and Central Bank Balances, edited by Cochrane, John, Palermo, Kyle, and Taylor, John, 151. Hoover Institution Press.Google Scholar
Morse, Julia C., and Keohane, Robert O.. 2014. Contested Multilateralism. The Review of International Organizations 94 (4):385412.CrossRefGoogle Scholar
Pelc, Krzysztof J. 2011. How States Ration Flexibility: Tariffs, Remedies, and Exchange Rates as Policy Substitutes. World Politics 63 (4):618–46.CrossRefGoogle Scholar
Reinhart, Carmen M., and Rogoff, Kenneth S.. 2014. Recovery from Financial Crises: Evidence from 100 Episodes. American Economic Review 104 (5):5055.CrossRefGoogle Scholar
Rey, Hélène. 2015. Dilemma Not Trilemma: The Global Cycle and Monetary Policy Independence. NBER Working Paper no. 21162 (Revised February 2018).CrossRefGoogle Scholar
Rosendorff, B. Peter, and Milner, Helen V.. 2001. The Optimal Design of International Trade Institutions: Uncertainty and Escape. International Organization 55 (4):829–57.CrossRefGoogle Scholar
Stiglitz, Joseph E. 2004. Capital-Market Liberalization, Globalization, and the IMF. Oxford Review of Economic Policy 20 (1):5771.CrossRefGoogle Scholar
Stone, Randall. 2002. Lending Credibility: The International Monetary Fund and the Post-Communist Transition. Princeton University Press.CrossRefGoogle Scholar
Truman, Edwin M. 2014. IMF Reform Is Waiting on the US. Peterson Institute for International Economics Policy Brief 14-9.Google Scholar
Williamson, John. 2012. Is the “Beijing Consensus” Now Dominant? Asia Policy 13 (January):116.CrossRefGoogle Scholar
Supplementary material: Link

Broz et al. Dataset

Supplementary material: File

Broz et al. Supplementary Materials

Broz et al. Supplementary Materials

Download Broz et al. Supplementary Materials(File)
File 28.5 KB