Innovative multilateralism
The New Development Bank established by BRICS heralds the transition from the West-centric past to an equal-rights future
For a long time, the architecture of global financial governance has been deeply shaped by Western patterns of power distribution. Multilateral financial institutions represented by the World Bank have historically linked capital subscriptions to voting power, thereby reproducing structural inequality in representation and influence. Major decisions, for example, require an 85 percent majority vote, while the United States holds more than 15 percent of the voting shares, effectively giving Washington veto power over key institutional choices. This arrangement demonstrates how Western power can be constitutionalized through multilateral institutions. On the surface, such institutions appear rule-based and universal, yet their foundational rules preserve asymmetrical authority. Leadership is stabilized through institutional design, and legitimacy is partially secured by embedding dominance within formal procedures.
After the 2008 global financial crisis, emerging economies intensified their search for alternative institutional arrangements — specifically, the creation of their own development bank. The New Development Bank was established in 2015 as a collective initiative of the five BRICS countries — Brazil, Russia, India, China and South Africa. The NDB’s equal-rights orientation is not merely rhetorical. From governance structure to operational model and normative orientation, the NDB has carried out systematic innovations, and its institutional design reflects a deliberate commitment to fairness.
In terms of governance structure, equal initial capital subscriptions among the five founding members established a formal parity that is unusual in multilateral banking. The institution’s rules were designed to protect that parity by limiting the extent to which later capital adjustments could dilute the founding balance or empower non-founding members disproportionately. The NDB does not eliminate differences in national capability outside the organization, but it prevents those differences from being directly translated into internal dominance. Its decision-making procedures reinforce this structure. Major decisions require broad support rather than unilateral approval by any single member, and the rotating presidency prevents permanent monopolization of executive leadership. These arrangements collectively shift the exercise of authority from veto-based domination to negotiated consensus. In institutional terms, power becomes more distributed, less entrenched and more visibly tied to procedural legitimacy.
In terms of operational practice, one notable feature is the commitment to local currency financing, which seeks to reduce exchange-rate exposure for borrowers and lessen dependence on dollar-denominated lending. Although this does not seek to displace the global centrality of the US dollar at the moment, it creates a limited but meaningful sphere of financial autonomy for participating countries. At the same time, the NDB gives greater weight to country ownership and contextual variation. This approach aligns with a broader critique of one-size-fits-all conditionality and suggests a more plural understanding of developmental pathways.
In terms of normative orientation, by emphasizing economic rather than ideological criteria in project decisions, the NDB positions itself against the politicization of development lending. This stance does not remove all normative assumptions from finance, but it does mark a deliberate contrast with institutions perceived as vehicles for policy discipline anchored in Western liberal norms. This is vividly demonstrated through the NDB’s recognition that the collective efforts of Global South countries matter a lot to their sustainable development. This reflects the core spirit of South-South cooperation: developing countries pursue common development through experience-sharing, technological cooperation and resource integration, rather than relying on one-way assistance.
It is particularly important to note that China’s broader vision for helping reform global governance is highly consistent with the institutional practices within the BRICS framework. China has explicitly proposed the idea of building a community with a shared future for humanity, while advocating an equal and orderly multipolar world and inclusive and universally beneficial economic globalization. Within this framework, the institutions of BRICS, such as the NDB, do not seek to replace the existing system. Instead, they can offer competitive alternative institutional choices, thereby pushing traditional financial institutions toward reform. This also reflects China’s vision of a new type of international relations characterized by mutual cooperation and win-win outcomes in the field of financial governance.
Today, we have entered the era of “greater BRICS cooperation”. South-South cooperation has therefore gained solid and sustainable institutional vehicles from the gradual build-up of the BRICS cooperation mechanism. It is no longer limited to fragmented aid projects or temporary policy coordination. Instead, at the core level of global financial governance, developing countries are now jointly designing rules, sharing decision-making power and collectively assuming development responsibilities on the basis of equality.
From West-centric logic to equal-rights practice, the story of the NDB demonstrates one crucial reality: in global governance, emerging economies are not only capable of being rule-takers, but can also become rule-makers. This is also a vivid illustration of China working together with other countries to build a more just and equitable global governance system.
Alessandro Golombiewski Teixeira is a distinguished visiting professor at the School of Public Policy and Management at Tsinghua University, a professor at the Chinese University of Hong Kong (Shenzhen) and a former senior advisor to the president of the New Development Bank. Xiang Menghuai is a PhD candidate at the School of Public Policy and Management at Tsinghua University.
The authors contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.
Contact the editor at editor@chinawatch.cn.
