Abstract
Are the BRICs driving a fundamental transformation of the world economy? Journalists, investors, policymakers, and academics alike prognosticate about the global impact of these large emerging economies. One camp deems the rise of the BRICs a challenge to America’s hegemonic power, increasing global politico-economic instability as a result. Another camp defends the continuation of the American (and thereby, global) status quo with equal fervor. The BRICs, they argue, are mired in their own domestic challenges, mistrust one another, have little interest in leading global affairs, and have yet to command true followership by the rest of the developing world.
This debate is far from resolved, and systematic studies on the rise of the BRICs are surprisingly scarce. Current contributions are replete with descriptive data, some historical references, and broad predictions based on grand theory, but advance no specific testable propositions. We take up the challenge offered by Edward Mansfield in this symposium, namely, to address “how rising power in the international arena interacts with concerns about domestic political stability to shape foreign economic policy.” We explore the impact of the BRICs on the developing world and the consequences of this for the global economy writ large. Driven by both domestic political and international economic concerns, we anticipate that the rise of the BRICs—and China in particular—increases the incentives of developing country governments to form South–South preferential trade agreements (SSPTAs). Drawing from the theories of embedded liberalism and intra-industry trade, we suggest that SSPTAs are promoting human development and thereby helping to ensure greater political and economic stability. We therefore offer a novel account of the formation of SSPTAs and argue that their growth has more far-reaching implications than previously thought by those who view them as weak and ineffective. Moreover, by uncovering the link between the BRICs and South–South trade agreements, our theory finds a common ground in the ongoing debate over the BRICs’ rise. In our view, the BRICs are fundamentally changing the shape of the world economy and paving a path toward greater global politico-economic stability, albeit in ways that may be inadvertent and unexpected.
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