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during the 2010s, various new international development financing mechanisms were launched. The People’s Republic of China (PRC/China) sponsored or cosponsored many of these new international and regional initiatives (see Hooijmaaijers 2015). This development occurred against the backdrop of the need for infrastructure investment, China’s massive foreign exchange reserves and industrial overcapacity, and emerging powers that shared China’s feeling that their stakes in global economic activity did not match their voting shares and leadership positions in the traditional international financial institutions (IFIs). In 2014, during the sixth annual BRICS (Brazil, Russia, India, China, and South Africa) leaders’ summit, the BRICS parties signed an agreement establishing the New Development Bank (NDB). The PRC proposed the Asian Infrastructure Investment Bank (AIIB) in the same year. Both new multilateral development banks (MDBs), which started operating in 2015, have attracted abundant scholarly attention. However, less attention has been paid to another and, so far, less successful initiative, the Shanghai Cooperation Organization (SCO) development bank. In 2010, during the ninth prime ministers’ meeting of the SCO, then Chinese premier Wen Jiabao proposed to research establishing an SCO development bank, as he called for deeper financial and monetary cooperation among the SCO member countries. Nevertheless, progress toward realizing the SCO development bank idea has been minimal. Also, internal BRICS difficulties constrained the development of the NDB as an alternative to existing MDBs (see Cooper and Farooq 2016; Roberts, Armijo, and Katada 2017).
This article explores and explains the successes and failures of establishing new MDBs via a case study of the attempt to establish an SCO development bank that has not been successful to date. It contrasts this failed China-driven effort with the successful foundations of the NDB and the AIIB. The case raises the question of why some initiatives succeed, but others fail. Yet despite growing research on new MDBs, limited attention has been dedicated to addressing this topic. The majority of the literature on new MDBs is limited to investigating the linkages between the NDB and the AIIB or to examining the third wave of MDBs (see Reisen 2015; Wang 2017, 2019; Rewizorski 2018). It focuses, for instance, on the prospects of the NDB and the AIIB cooperating with traditional MDBs, on their engagement with other financial institutions (see Shelepov...