Great Power Rivalry and Hedging: The Case of AIIB Founding Members

Abstract

Abstract Why did some states join the Asian Infrastructure Investment Bank (AIIB), overriding the US opposition, while others did not? Are they balancing against the USA and accommodating China? Characterizing the joining of the AIIB as a case of hedging, this study unearths the political calculus behind hedging amidst great power rivalry. Placing my argument within a relational-network approach, I argue that states deeply embedded in the dominant international order are more likely to join the AIIB to hedge. First, the fear of abandonment is lower for highly embedded states due to their significance in the international order. Second, the fear of domination is also lower for states with extensive network ties; they can use their social and political power to voice their demands, mobilize other states, and earn policy concessions. Hence, I expect hedging to be a strategy of core states instead of second-tier or rogue states. I test the hypothesis with a large-N analysis using an original dataset on states’ embeddedness in the US-led order and comparative case studies of the UK and Ireland.