We examine the World Bank’s protracted and conflicted attempts at shareholding reform from 2008 to the present, situating them within the broader context of multipolarity and intensifying geopolitical rivalries.
When finance ministers, central bankers, and development officials gather in Washington for the World Bank and IMF Annual Meetings (13–18 October 2025), they will confront a familiar but unresolved issue: how to bring the governance of the Bank into line with today’s global economy. Once again, a scheduled shareholding review—this time the long-awaited 2025 round—finds itself mired in stalemate, as we detail in our new INET Working Paper.
For nearly eight decades the Bank’s principle has been clear: countries’ voting power should “largely reflect their relative weight in the world economy.” Yet today, the mismatch between economic reality and political representation is wider than ever. China, India, and Indonesia—three of the four most populous nations—remain spectacularly underrepresented, while several European states with much smaller economies enjoy disproportionately large influence.
Fifteen years of “voice reform”
The World Bank embarked on a reform process in 2008–2010, which shifted just under five percentage points of voting power from advanced to developing and transition countries (DTCs). At the time, leaders promised this was only a beginning: future reviews, scheduled every five years, would continue the rebalancing.
But subsequent rounds have fallen flat. The 2015 review produced little more than a statement of principles (the “Lima Principles”). The 2018 reform raised hopes, but was ultimately a missed opportunity, delivering a shift of only 0.5 percentage points. The 2020 review, undertaken in the shadow of the pandemic, produced no change at all. Now, in 2025, Bank shareholders once again confront the question of whether this process is genuine reform—or ritual.
The geopolitics of obstruction
Why is progress so limited? Part of the answer lies in the geopolitical rivalry between the United States and China, which has hardened dramatically over the past decade. Washington insists that any meaningful increase in China’s shareholding is unacceptable, lest it provide Beijing with greater influence over the world’s premier development finance institution. Many European governments, anxious not to upset the US, quietly align with this position.
Japan, too, resists, determined not to see China overtake its number two voting share—a symbolic marker of regional status. Meanwhile, France and the UK deploy creative shareholding accounting to cling to their privileged single seats on the Board of Executive Directors.
These positions reflect a deeper reality: the Bank remains seen by its dominant shareholders as a Western-led institution. As one Executive Director put it bluntly, “The Bank is first and foremost a bank. Since when do the customers control a bank?”
Institutional lock-in
Yet geopolitics is only part of the story. The Bank’s Articles of Agreement give each member a “preemptive right” to maintain its shareholding in any capital increase. This means any country facing dilution can refuse and insist to maintain its previous share (and of course it then has to pay to “subscribe” to those additional shares). In practice, this enshrines the status quo: genuine realignment is almost impossible without near-unanimous agreement.
The result is a cycle of exhaustive negotiations that produce only fractional adjustments, which are hailed as progress. Meanwhile, the gap between rhetoric (“equitable voting power”) and reality grows wider.
Three scenarios for 2025
Looking ahead to the October meetings, three broad scenarios are on the table:
1. Worst-case: The US blocks any meaningful change, other G7 allies fall in line, and even symbolic reforms (such as raising the “basic votes” of small countries) stall. This would mirror the IMF’s 2023 quota review, which essentially delivered nothing.
2. Modest reform: To avoid another outright failure, shareholders agree on a limited increase in basic votes for low-income members and a general proportional capital increase. This would be more symbolic than substantive—but could be presented as progress.
3. Best case: Shareholders adopt a new institutional design based on the combination of “misalignment limits” (e.g., no country’s voting share should deviate more than 20 percent from its calculated shareholding) coupled with “responsible shareholding,” requiring large shareholders (including China) to contribute regularly to the Bank’s concessional arm (IDA). Shareholders also move toward an open and competitive process for selecting the Bank’s President. Such a deal would require a grand bargain between Washington and Beijing, with China accepting greater financial obligations in return for increased voting rights.
The stakes
If the Bank fails again to deliver, the consequences go beyond internal governance. The institution risks further erosion of its legitimacy as the world’s premier multilateral development bank. At a time when global challenges—including debt distress, fragile states, climate change, cross-border conflict —demand coordinated action, a perception that the Bank is stuck in the 20th century geopolitics of Western dominance could accelerate moves by emerging powers to channel resources into alternative institutions.
The irony is that reform would serve not only the interests of China, India, and other underrepresented economies, but also those of the Bank’s traditional shareholders. A governance structure more reflective of today’s multipolar economy would strengthen the Bank’s credibility and relevance. Conversely, blocking reform to maintain Western control may secure influence in the short run but undermine the institution in the long run.
Conclusion
The 2025 Annual Meetings (13–18 October) may well prove to be another missed opportunity. Yet they could also mark a turning point. For the World Bank to retain its standing as a truly multilateral institution, it must break free of the structural constraints and geopolitical vetoes that have paralyzed reform.
The alternative is grim: a governance system increasingly out of step with the world it purports to represent, and a Bank whose claim to global leadership rings increasingly hollow.
