Changing the rules of the game: Brazil and the formation of the New Development Bank. Exploring Brazil's motivation for supporting the creation of the New Development Bank

Abstract

This research is aimed at explaining why Brazil decided to expand its economic cooperation with other BRICS countries by forming the New Development Bank (NDB). From a liberal perspective, Brazil’s support is questionable since it is already an active member of the current international financial institutions, such as the IMF and World Bank. Why did Brazil make such an effort to form another economic organisation? This is puzzling in two ways: First, there is no precedent in the history of international relations where a group of emergent countries collaborated to create an international financial institution without the support of established hegemonies. Second, it is unclear why Brazil has put so much effort in creating a new bank, considering the country is already an active member of the Bretton Woods institutions. In order to fully understand the Brazilian reasons and to provide a wider understanding, two theoretical frameworks are used to guide this research: the mercantilist theory and the dependency theory. The choice of these two different approaches is partially motivated by the different roots. The mercantilist theory has its origins in Europe and the dependency theory was predominantly developed in Latin America. To understand Brazil’s motivation towards the NDB, the empirical research of this thesis was based on primary resources such as official statements or speeches from the main actors. Secondary sources such as newspaper and scientific articles were used to broaden the research. The results show the mercantilist approach better explains the Brazilian support on the foundation of the NDB. Guided by this theory, it can be inferred that Brazil’s ambitions towards the NDB are to change the current power structure of the global political economy. Brazil wants to acquire more power and influence in the international sphere while developing internally.