356 CHAPTER NiNE ■ InternatIonal Po lItI cal economy
That system must be altered significantly. Because developing states cannot adequately
control multinational corporations, and because many of the leaders of these states have
been co- opted by those very MNCs, radicals have sought international regulations in
many forums.
Not all the critics of the current international economic system are radicals.
Reformers both outside and within the international financial institutions question
both governance and specific policies.^26 In terms of governance, reformers propose
altering the weighted voting system the IMF and the World Bank now use in favor of
greater repre sen ta tion for the emerging economies. In the current system, the major
donors are guaranteed voting power commensurate with their contributions. The largest
shareholders in each institution— the United States, the Eu ro pean Union states, Japan,
and Canada— hold about 60 percent of the total votes. Reformists believe a more
representative voting structure might lead to the promotion of dif er ent policies. While
incremental changes have been proposed, including giving more weight to China by
increasing its weight- voting share from 3.66 percent to 6.06 percent, fundamental vot-
ing power has not shifted. Further, hiring a more diverse group of bureaucrats, instead of
the current predominance of economists trained in Western developed countries, might
bring new, innovative solutions to development dilemmas.
Failing fundamental changes in these organ izations, there is a movement to create
alternative institutions that reflect changing power relations. The BRICS created two
new financial institutions in 2014: the New Development Bank, a potential rival to
the World Bank with $50 billion in capital, and the Asian Infrastructure Investment
Bank, a rival to the Asian Development Bank with 50 members (including 13 states
within NATO) with paid-in capital of $20 billion. In both cases, China is the major
financial contributor, the membership is broad, and each state has a vote, with no veto
power. With a $40 billion Silk Road Fund also backed by China, China seeks to become
an alternative banker to the world. The BRICS countries difer with the West over many
issues, and they share little in common, making it unclear how soon and how well the
new institutions could begin operating.
Other reformers are critical of specific policies; here, the critics difer. On the one
hand, some argue that both the IMF and the World Bank have strayed too far from their
liberal economic foundations, taking on too many dif er ent tasks (trying to promote an
environmental agenda or gender equality) and deviating from actions promoting market
liberalization. In fact, some maintain that aid and loans themselves should be allocated
by competition, creating a liberal market for aid funds. On the other hand, radical po liti-
cal economists claim the institutions promote the interests of private international capi-
tal, pointing to the economic returns to those firms that provide the ser vices for the dams
and power plants. Other bank policies that have been rigidly developed without
considering local conditions and local knowledge end up disproportionately afecting
the disadvantaged sectors of population: the unskilled, women, and the weak.