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Abstract
How does the USA react to Chinese initiatives that gather allies from among the states that have been instrumental in sustaining the American-led liberal international order? We contend that Washington deploys dispositional balancing against Beijing, supporting this argument through a close scrutiny of US support for the projects of international developmental organisations (IDOs), such as multilateral development banks (MDBs), that target borrowing members of the Asian Infrastructure Investment Bank (AIIB). In theoretical terms, dispositional balancing is a relatively cheap strategy whereby the hegemon (the USA) reacts to the emerging power (China) by signalling to both old and potential allies its immutable ability to match that rival's benefits and hence retain its status and order. We build our theory through logit and linear models, tackling potential endogeneity through use of an instrumental variable strategy. In line with the theoretical expectations, we identify that the USA favours AIIB members, particularly those that also display high levels of dependency on Chinese aid, in IDOs/MDBs, wherein Beijing competes with traditional Western donors from the Organisation for Economic Cooperation and Development's Development Assistance Committee. Our findings contribute to both the debates on hegemonic-order transitions and the growing scholarship on soft balancing, contested multilateralism, and collective financial statecraft.

Structural adjustment programs of the International Monetary Fund (IMF) are often blamed for disrupting social relations by forcing austerity on vulnerable people and introducing unpopular liberalization policies. Some suggest that such interventions harm ethnic relations in developing countries because they are insensitive to the tenuous social bargains that often preserve ethnic peace. Moreover, during crises, dominant groups may seek to displace the pain of reform on others, the ethnic division of labour may be affected differentially by reform policies, and ethnic entrepreneurs could use moments of crisis to their advantage. We test the propositions by using unique data measuring the level of ethnic tensions in a country. The results show that IMF interventions reduce conditions of ethnic enmity. These results are robust to fixed effects estimation, endogeneity and selection effects. Moreover, IMF interventions lower ethnic tension in countries that are highly fractionalized, but they are more problematic where larger groups face each other and when larger groups are excluded from state power. These results suggest too that IMF interventions may lead to greater empowerment of excluded groups who might agitate for change during periods of economic crisis. On balance, IMF interventions, relative to continued economic woe, pacify ethnic relations in crisis-ridden countries. We find no evidence to suggest that IMF programs increase ethnic tensions, which is good news for poor countries requiring cheap loans and assistance with reforms.