BRICS Collective Financial Statecraft

Abstract

This chapter examines four ideal types of collective financial statecraft of the BRICS (Brazil, Russia, India, China, and South Africa) in four case studies occurring between 2007 and mid-2016. The first type is inside reforms of existing institutions, illustrated by the BRICS’ attempt to gain greater influence within the International Monetary Fund (IMF) and World Bank. A second type is inside reforms of markets, defined as resisting or reallocating the political power accruing to states that possess currency and financial market power. The associated case profiles the BRICS’ opposition to sanctions against Russia over its intervention in Ukraine. A third type of BRICS collective action occurs via the outside option to create new parallel institutions such as the New Development Bank (NDB) and Contingent Reserve Arrangement (CRA). Finally, a fourth type combines the choice of an outside option with a market-based venue. The chapter examines BRICS support of greater internationalization of China’s currency, rivaling the U.S. dollar and thus altering international financial markets. The BRICS have cooperated successfully in most of their attempts.