BRICS under strain: Internal economic challenges in a rising coalition

Abstract

This article explores the economic fault lines that limit BRICS' potential for collective action as an alternative to Western-dominated economic governance, given its collective share of the global economy. It examines seven interrelated fault lines: the income and structural inequities, trade imbalances and Chinese dominance, the stagnation and structural constraints of de-dollarization, the limited mandate and role of the New Development Bank and the largely moribund Contingent Reserve Arrangement (CRA), differences in fiscal and monetary policy, sanctions-induced disruptions, especially near Russia and the further coordination challenges posed by the recent expansion of BRICS. The article applies a neo-functionalist approach to show that functional spillover in BRICS is limited, sporadic and often counterbalanced by spillback, as sovereignty and competition trump the institutionalization of BRICS. The analysis suggests that it depends on the potential of BRICS to transform the global economic order hinging on overcoming structural asymmetries through institutional innovation and reform.