Wang, Yu

Abstract: This article analyzes the determinants of new prospective members of the Asian Infrastructure Investment Bank (AIIB). I argue that less democratic countries are more likely to apply, and that when deciding to join the institution countries learn from their neighbors and from any previous international organization (IO) interactions they have had with China. Building on detailed panel data covering the institution’s founding period, i.e. from October 24, 2014 to March 31, 2015, I fit both a probit model with time polynomials and a Cox duration model to identify country characteristics that correlate with joining the AIIB. I show that countries with lower polity scores or whose neighbors had already become members were more likely to join, and that the probability was higher for countries that belonged to China-led IOs. Lastly, I show that countries under-represented in the existing international financial system were also more likely to join. My findings highlight the importance of democracy in shaping the membership structure of the AIIB, and demonstrate how countries leverage information from their neighbors and from previous interactions with China to adjust the perceived risk of joining. They also provide the first modern-day empirical support for the contested multilateralism framework. Full text available here.