Middle Power Agency Calls Amid Rules-Based Order and Spheres of Influence Anxiety

Introduction

The past few years have seen intensifying anxieties about the so-called rules-based order (RBO) intersecting with calls for middle and smaller powers in the rest of the world (ROW) to step up in the wake of rising strategic competition. The intersection of order anxiety and activism calls is critical to the world’s trajectory, as well as U.S. interests. The stakes are particularly high in the Indo-Pacific, the primary theater of major power competition that encompasses some two-thirds of the world economy, more than half its people and seven of its largest militaries.

This policy brief explores the intersection between order anxiety and strategic competition, as well as the opportunities and challenges therein. It is informed by conversations with policymakers and experts across key capitals, in addition to trips to Africa, Asia, Europe, Latin America, and the Pacific over the past few years. The brief makes three arguments. First, intensifying anxieties about the RBO can be identified across four critical components: rules, alignments, institutions, and norms. Second, RBO anxieties intersect with ROW activism calls across four so-called “anxiety-activism” gaps in political, economic, security, and technological realms. Third, filling these gaps in an environment of hardening strategic competition will require countries to take concrete actions that will shape governance, architectures, and ecosystems to preserve interdependence in a more contested world beyond more abstract rhetoric or postures.

Rules-Based Order Anxieties in Perspective

Anxieties about the RBO—shorthand for arrangements put in place to structure interactions among polities following the end of World War II—are not new. Despite various interpretations around the label (and alternate framings such as liberal international order popularized after the Cold War), the RBO was never wholly rules-based, orderly, or globally agreed-upon. As with orders of the recent past—with order itself as a concept dating as far back as ancient civilizations in Sumer and Mesopotamia—it was underpinned by a balance of power. In this case it was among victorious Allied powers (primarily the “Big Three” of Britain, the Soviet Union and the U.S., but also including the Republic of China). It was then reinforced and contested in regions such as the Indo-Pacific by a wider range of actors amid shifts such as decolonization, the Cold War, and globalization. In the security realm, states with nuclear weapons faced opposition to the Nuclear Non-Proliferation Treaty in 1968 from countries such as China, India, and Pakistan, which eventually acquired their own nuclear arsenals. Archipelagic states such as Indonesia were on one side of protracted negotiations over the United Nations Convention on the Law of the Sea (UNCLOS), completed in 1983. Economically, powers such as Japan and Australia played roles in forming institutions including the Asian Development Bank (ADB) in 1966 and the Asia-Pacific Economic Cooperation (APEC) in 1989. The U.S. reinforced parts of the order but also caused shocks led by terminating the Bretton Woods monetary system when it ended direct convertibility of the dollar to gold in 1971.

RBO anxieties have intensified significantly over the past few years. Beyond past notions around “polycrisis” dating to the 1990s, they include frustrations with glacial institutional reform and fallout from intensifying great power competition. Careful content analysis of speeches by officials suggests RBO anxiety is present across its four main components: 1) rules updates necessary amid fast-moving opportunities and challenges; 2) alignment complexities among powers amid rising U.S.-China strategic competition; 3) growing stress on institutions that includes the UN system; 4) more instances of norm-breaking and challenges to norms support. Being specific about RBO anxieties allows us to focus on addressing concerns beyond general statements suggesting the order is “over” or is experiencing “rupture.” None of the many policymakers the author conversed with advocated abandoning (as opposed to reforming) order components such as the United Nations system, regarded as a necessary “floor.” Historically, orders are rarely discarded entirely. Indeed, even the current RBO merged new elements (e.g. creation of the UN) with past order elements (e.g. the International Labor Organization from the short-lived League of Nations) and the norm of territorial integrity (in place since the 1648 Treaty of Westphalia and advanced under the Concert of Europe from 1815 until World War I).

Table 1: Rules-Based Order Components, Sources of Anxiety and Example Manifestations

To be sure, anxieties and responses to them manifest differently, including within the Indo-Pacific region. An ascendent China has railed against unilateralism by countries such as the U.S. in concepts including its Global Governance Initiative. Yet China has also previously generated order anxieties of its own with actions such as economically coercing countries (including Australia, South Korea, and the Philippines). India has moved beyond championing reform to institutions  such as the United Nations Security Council to pioneering its own model in geoeconomic sectors across and beyond the Global South, including energy and digital public infrastructure. New subregional strategies increasingly stress the need for new forms of intraregional collaboration beyond the great powers, be it the 2050 Strategy for the Blue Pacific Continent or the first-ever ASEAN Geoeconomics Report as the region grappled with U.S. tariffs.

Where RBO Anxiety Meets ROW Middle Power Activism Calls

RBO anxieties have intersected with rest of world (ROW) activism calls for middle and smaller powers to step up and address order challenges, even amid contentious debates around potential end states. Worst-case scenarios around formal “spheres of influence” distract from the reality of common informal dealmaking among great powers in past orders. This informal dealmaking often happens around events perceived to be in each other’s neighborhoods at the expense of smaller states (arguably also seen in reluctant Allied concessions to the Soviet Union on Central and Eastern Europe in post-WWII negotiations). Multiple officials told the author they could not see their governments formally using the term “middle powers” due to concerns largely centered around accepting a lower status in hierarchical power-based formulations. Debates surrounding the idea of a bipolar or multipolar world (including notions of a “G2” “G-Zero” or “G Minus Two”) gloss over exactly which versions may play out given messier earlier versions of multipolar order, including in 19^th century Europe.

Given these complexities, a useful starting point would be to broaden the aperture beyond scenarios or labels to the larger question of how actors can plug gaps in the order on fundamental aspects, including stability promotion and public-good provision. Seen through this lens, the most consequential “anxiety-activism gaps” can be identified across four core areas where megatrends are underway: political, economic, social, and technological (PEST) which can be categorized through a gap analysis in employing the PEST framework used in business analysis (see table below). Active efforts to fill these gaps more closely resemble the dynamic of “creative destruction,” coined by economist Joseph Schumpeter in 1942 to describe innovations, rather than the frequently cited notion to describe a prolonged interregnum by political theorist Antonio Gramsci in the interwar period that “the old world is dying, and the new one is struggling to be born.”

Table 2: Anxiety-Activism Gap Dynamics Across Four Major Strategic Domains

First, in the political domain, as middle and smaller powers seek agency, there is a gap between institutional power distribution and changing global balance of capabilities. The most commonly cited examples are the U.S.-European traditional monopoly on designated heads of the World Bank and the International Monetary Fund. Another significant example is the unchanged, veto-wielding five permanent members of the UN Security Council or P5—China, France, Russia, United Kingdom, and the U.S.— even as its membership has grown almost four fold since it was founded and non-permanent member composition was only expanded once, in 1965. But in some ways, this top-down view of past power structures misses the bottom-up pressures for wider changes emerging from an array of actors, including in the Indo-Pacific. Manifestations of efforts to address this capacity-representation gap include the addition of countries like Vietnam as a guest of the Group of 20 (G-20) and even new Organization of Economic Cooperation and Development (OECD) roadmaps for Southeast Asia’s two largest economies, Indonesia and Thailand.

Second, in the economic domain, as economies try to grow and bridge development gaps, rising geoeconomic tensions are forcing tradeoffs, increasing volatility, and compounding uncertainty about the macroeconomic environment and business cycles. Trade and infrastructure have been at the forefront of tensions in regions such as the Indo-Pacific, which is already the dominant source of global growth. Examples include tariff hikes amid past reductions amid growing paralysis at the World Trade Organization (WTO)—itself a newer RBO institution (founded in 1995)—as well as the rush to form alternatives to China’s Belt and Road Initiative (BRI) given multiple concerns and the reality of a trillions-wide regional gap in infrastructure financing. Continued regional activity has raised questions about future of supply chains and an increasingly Sinocentric economic order that leaves Washington more often on the outside looking in, with cases in point including the Regional Comprehensive Economic Partnership (RCEP), the world’s largest trade pact of its kind.

Third, in the social domain, as states try to enact policy within a narrower policy context, a confluence of factors is combining to intensify the pace of social change in the broader operating environment. This social gap is illustrated in trends such as aging or quantitative measures of discontent that suggest a growing “trust crisis” with respect to institutions such as governments, business, or the media. In the Indo-Pacific, demographic issues have risen to the top of the policy agenda, as evidenced by South Korea’s prioritization of them during its chairmanship of the Asia-Pacific Economic Cooperation (APEC). Parts of the region have also seen discontent spill over into street-level demonstrations and counter-demonstrations that—though still dominated by local concerns—nonetheless connect to or intersect with RBO challenges. The Israel-Palestine conflict is a prime example.

Fourth, in the technological domain, as governments weigh opportunities and challenges posed by the basket of critical and emerging technologies, there is a gap between the current political-economic context and adaptation required to manage their game-changing, multistakeholder effects. While this basket of technologies is large—including quantum computing; space systems; advanced connectivity (including 6G networks and the Internet of Things); robotics and autonomous systems; and biotechnology—the focus has been on artificial intelligence (AI), given its ability to reshape the Fourth Industrial Revolution. Here, the absence of globally agreed-upon frameworks coupled with surging competition and concerns around areas such as trust, safety, sustainability, and labor market disruption, has intensified anxieties around conceptions such as “tech sovereignty.” Manifestations in the Indo-Pacific have included U.S. scrutiny on AI chip export control circumvention in Chinese tech startups such as DeepSeek, as well as data localization bids among some emerging economies.

Policy Recommendations

Adjusting to the intersection between RBO anxieties and ROW activism will require actions from a range of actors, including the U.S. and its partners. This is critical because the future of the RBO will ultimately depend more on how countries concretely shape governance, architectures. and ecosystems to preserve interdependence in a more contested world, rather than on abstract anxious statements about order demise or alignment postures around survival.

1. Shape geoeconomic ecosystem building. Capable and willing countries must actively shape ecosystem building in core geoeconomic areas. This is particularly critical in fields such as technology, where policymakers already recognize that countries will confront hardening choices in a more competitive world that will test how agency is exercised. For instance, on artificial intelligence, beyond the aggregate notion of U.S.-China competition, U.S. officials say privately that policies and feedback from partners such as Singapore and the United Arab Emirates, along with China’s efforts in parts of the Global South, have helped inform how AI models can be integrated with due attention to local circumstances.
2. Strengthen domestic sectoral architectures. Countries should strengthen their domestic sectoral architectures to enhance their abilities to make choices in the most intense areas of strategic competition. One critical area to prioritize is assessment mechanisms to evaluate incoming and outgoing investments. The emphasis should be on covering core national security areas such as critical technologies, electoral infrastructure, and military equipment—even if initial mechanisms fall short of past screening measures in developed nations such as Australia, Canada, Germany, Japan, the UK, and the U.S.
3. Intensify pathfinding cooperation on interdependence in a more contested world. Key countries should advance flexible, focused pathfinding cooperation across specific issues and sectors to reinforce interdependence in a more contested world. Sector-wise, on trade for instance, one notable case is kickstarting the Future of Investment and Trade Partnership—with a cross-continental founding membership comprising New Zealand, Singapore, Switzerland, and the United Arab Emirates, as well as addressing issues such as supply chain resilience and rules-based trade. Issue-wise, India’s signing of more than 20 mobility partnerships, including with the European Union and Israel, offers a case in point of ways for countries to manage labor issues comprehensively in terms of skills and arrangements for mobile workforces beyond narrower notions such as “brain drain” or visa quotas. 
4. Solidify subregional reinforcement. Key intraregional and extraregional powers should invest in solidifying subregional reinforcement as the foundation for global stability. One notable case in the Indo-Pacific is Australia’s efforts to promote a conflict prevention agenda in Southeast Asia, given the propensity for world order challenges to complicate regional conflict dynamics, which includes leveraging existing regional institutions. The Pacific Island Forum’s Pacific Resilience Facility—the first region-led financing vehicle of its kind—offers an example of how regional ownership can help focus international attention on reinforcement needs.
5. Address resourcing gaps. Capable and willing actors should help plug resourcing gaps, with recent developments such as aid cuts by the U.S. and some European countries and debt distress among developing countries amid a trillions-dollar gap on Sustainable Development Goals, exposing longstanding challenges. Efforts such as the UN’s “Humanitarian Reset” have flaws, but also have added momentum to the role of localization and anticipatory action in reimagining aid. Smaller states can help shape the contours of financing debate even amid opposition by larger actors. Exampled exist in the climate space, including Vanuatu’s backing of a legal bid that gained global traction beyond the Pacific, as well as Barbados’ role in the Bridgetown Initiative on financing. 
6. Push major power flashpoint guardrails. Influential state and non-state actors must continue to push the agenda forward for flashpoint guardrails among major powers, which is a necessary condition for world order stability. There will naturally be a particular focus on the U.S. and China as the two principal superpowers. Incremental steps in specific areas such as a recent agreement on nuclear weapons decision-making control or temporary, time-bound, and reciprocal moratoriums may be deemed more feasible in the absence of wider agreements, including replacements for the New Strategic Arms Reduction Treaty (New START) between Russia and the U.S.; or pulling China into arms limitation talks and addressing Beijing’s concerning approach to crisis hotlines.
7. Seek incremental progress in a challenged UN system. Countries should strengthen key UN institutions, given that the UN remains the most universally accepted entity on which to build. The more realistic pathways include incrementally expanding existing agreements such as the first-of-its-kind maritime treaty covering biodiversity conservation under UNCLOS (known as the BBNJ Agreement) that came into force in January 2026 following efforts by a coalition financed by the EU and featuring Indo-Pacific countries including Australia, Japan, Korea, New Zealand, and Singapore. More challenging, ambitious reform efforts such as adding more permanent or non-permanent members to the UN Security Council should be kept on the table through bridging initiatives, as we have seen with support for representation from Africa among the G4 grouping comprising Brazil, Germany, India, and Japan.