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Robert H. Wade

June 27th, 2022

Leading States in the Periphery of the World Economy Challenge Core States: Impacts of the unlikely BRICS coalition

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Estimated reading time: 4 minutes

Robert H. Wade

June 27th, 2022

Leading States in the Periphery of the World Economy Challenge Core States: Impacts of the unlikely BRICS coalition

0 comments | 1 shares

Estimated reading time: 4 minutes

In a recent essay published in Global Policy, Professor Robert Wade assesses the impact of the BRICS coalition and the potential for expansion. He further outlines policy recommendations.

Abstract

The longer-run trajectory of the global economy (and its politics) will be much affected by the extent to which developing countries manage to cooperate to challenge the rule-setting dominance of the North Atlantic states. This essay assesses the impact on global economic governance of the cross-regional BRICS coalition (Brazil, Russia, India, China, South Africa).  The standard assessment in the west is: very little so far. The essay finds that this is too pessimistic, though not by much. The format exists, the political leaders do meet twice a year, finance ministers and central bank governors do the same, and two financing organizations have been created to complement or eventually even substitute for the IMF and the World Bank. Potential expansion of cooperation depends heavily on the willingness of the national presidents to act independently of the US, and on geopolitics between the members of the coalition.

Policy recommendations

The institutional structure of the world economy operates to sustain the economic and political pre-eminence of the North Atlantic states and delay the catching up of poorer countries with their living standards.  Concerted action by coalitions of developing countries to change rules of integration in world economy can change some of the obstacles to their catch up.

The BRICS coalition is well placed to formulate new rules – and a new ‘mindset’ – because it includes major states from all regions outside of the west.

It is especially important to keep China strongly engaged with the other four, cooperating with them to advance common interests (especially in multilateral forums like the BRICS, IMF and WTO), and blunting the onset of full-blown China-US rivalry in the economic and security realms.


The views expressed in this post are those of the author and in no way reflect those of the International Development LSE blog or the London School of Economics and Political Science.

About the author

Robert H. Wade

New Zealander, educated Washington DC, New Zealand, Sussex University. Worked at Institute of Development Studies, Sussex, 1972-95, World Bank, 1984-88, Princeton Woodrow Wilson School 1989/90, MIT Sloan School 1992, Brown University 1996-2000. Fieldwork in Pitcairn Is., Italy, India, Korea, Taiwan, Iceland, and inside World Bank. Author of Irrigation and Politics in South Korea (1982), Village Republics: The Economic Conditions of Collective Action in India (1988, 1994, 2007), Governing the Market: Economic Theory and the Role of Government in East Asia's Industrialization (1990, 2004). Latter won American Political Science Association's award of Best Book in Political Economy, 1989-91. Awarded Leontief Prize for Advancing the Frontiers of Economic Thought, 2008. Recent writing on the continuing relevance of the “developed/developing” country distinction, and on new thinking about “state ‘intervention’ in the economy”.

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