The BRICS Bank’s potential to challenge the field of development cooperation

Abstract

The five fast-growing economies, known collectively as BRICS, have recently announced their intention to create their own development bank. The so-called BRICS Bank will be the first world multilateral development bank controlled solely by emerging economies. This paper asks whether the new bank has the potential to bypass the World Bank, destabilizing the current development finance framework. Specifically, if the BRICS Bank project succeeds, what are the possible scenarios for the field of development cooperation? To map these scenarios, we propose a typology of practices in development finance, drawing from operations of the World Bank and national development banks in Brazil and China. Assuming that the BRICS Bank is likely to adopt one of the practices currently used by Brazil or China, we speculate about the outcomes of the interaction between the BRICS Bank and the World Bank and their respective practices. Acknowledging that it is still uncertain what these outcomes will be, in part due to the uncertainties regarding how the BRICS Bank will operate, this paper provides a map of possible scenarios. *** Introduction: Development Cooperation as an autonomous field The field of development cooperation has been historically marked both by strong continuities and sharp changes of structures and practices. One of these changes is the multiplication of organizations operating in the field. In the aftermath of the Second World War, the first multilateral organizations designed to guarantee the stability of the international financial system and to foster economic development, the International Monetary Fund and the World Bank, A.

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