WPS 15-10-1
Working Paper Series
From power transition to
economic integration theory:
A review of the BRICS literature
Yvonne Sperlich
October 2015
From power transition to economic integration
theory: A review of the BRICS literature
Yvonne Sperlich
Geneva School of Economics and Management (GSEM); University of Geneva
Abstract
During the last decade, many scientific articles have been published in political science about
the formation of BRICS and the therewith related possible change of the international order.
However, this topic has attracted much less attention in the economics literature. Based on a
selective literature review of articles in political science and economics we summarize their
findings from both disciplines, and analyze the economic and political development of the
member states before and after having formed this alliance. A conclusion is that this
collaboration is in fact becoming increasingly important for the world economy, international
order, and the catching-up development in poorer world regions. This entails various
challenges for related research, like the study of potential trade effects of a closer BRICS
cooperation.
Keywords: BRICS, economic integration, trade, power transition theory
JEL classification: F02, O10, O11, O19, P59, R10
Contact address: Yvonne Sperlich ([email protected]); Fax +41(0)22-3798299, Geneva School of
Economics and Management, UniMail, Bd. du Pont d'Arve 40, CH-1211 Geneva. The author appreciated a lot
the helpful comments of Marcelo Olarreaga (Université de Genève), Thomas Biersteker (Graduate School,
Geneva), and Jaime de Melo (Université de Genève). Financial support of the Swiss National Science
Foundation, PMPDP1_151444, is acknowledged.
1
1. Introduction
Over the last decade, political scientists have vividly discussed the motivation of the
formation, the impact and the future effects of the so called BRICS. In contrast, there are only
few articles about this issue in economics1. This article aims to summarize the main findings
in both disciplines, to highlight their links, and to study the BRICS development until now.
For a long time we are observing that states or state-like entities (e.g. OPEC) forge alliances
to enforce or defend their interests. 2 It is commonly assumed that the BRICS is such a
strategic alliance in order to pursue common interests at national, regional and multilateral
level. Since its members are considered as emerging countries these interests entail especially
the improvement of their bargaining power at multilateral level, the expansion of regional
influence, the ensuring of access to markets and resources, but certainly also sectoral
cooperation. The acronym BRIC (without South Africa) was first mentioned by O'Neill in
2001, a Goldman Sachs economist, and today, nearly fifteen years later, BRICS is considered
as a new international platform with a possibly increasing importance at the international
stage. Besides, other countries have declared their interest to become a BRICS member such
as Turkey and Indonesia. Permeable BRICS borders and several constellations (BRICS plus
Indonesia and Turkey BRIICTS or BRICS plus the ASEAN and Mexico BRICSAM, see
Wade, 2011) are therefore conceivable.3
To discuss the theoretical embedding of the BRICS, the political sciences use the so-called
power transition theory (PTT) associating the BRICS with a global change from a uni- to a bior multipolar world (Glosny, 2010). Introduced by Organski (1968a,b), the PTT describes the
international relations as hierarchic system between countries in which national power is
changing over time. A transition period starts when a great power in a secondary position
challenges the top nation.
The economic science is focused on economic integration of the five emerging countries, for
example related to intra-BRICS trade (Chatterjee, Jena and Singh, 2014 and Sharma,
Kallummal, 2012) and FDI policy (Mlachila and Takebe, 2011). Developed by Balassa
(2013), the economic integration theory (EIT) assumes that increasing globalization and
technological progress leads to freer trade and movement of economic factors as well as to
1
See survey among experts: Sperlich and Trachsel, DEGIT XX Geneva, 2015.
See Walt (1985), Wade (2011)
3
One future research question is to analyze the determinants of being a BRICS country
2
2
deeper integration over time.4 Economic integration is defined as an empirically observable
process of increasing cross-border activities, cooperation and coordination within a group of
countries (Ziltener, 2003). Originally, the concept of economic integration has been based on
economic cooperation between natural partners (neighboring countries or countries at the
same continent). But since technological progress reduced transaction costs, also intercontinental and global economic integration has become important in recent decades.
Thus, this paper answers the three following questions: What have so far been the findings in
both disciplines? Does the BRICS formation confirm the predictions of the PTT and EIT?
And can the BRICS become a system-relevant alliance?
But first of all, we describe in detail this cooperation. BRICS brings together the re-emerging
country Russia with the emerging nations Brazil,5 China, India, and South Africa. The last
one is considered as a catalyst for an integrated Sub-Sahara-Africa, see Kornegay (2014)6.
The first formal meeting between foreign ministers of the BRIC states (without South Africa)
took place in 2006. In 2009, the first BRIC summit was held in Yekaterinburg (Russia) with
the official focus on improving the global economic situation for emerging and developing
countries as well as reforming financial institutions. Already at that time, the members
claimed their involvement in the decision-making processes at the multilateral level. At the
end of 2010, South Africa became a member. At the sixth BRICS summit in Fortaleza
(Brazil) in 2014, the members founded the New Development Bank (NDB, with a budget of
$100 billion) as an alternative to the Western-based institutions (like the World Bank) and a
reserve currency pool (Contingent Reserve Arrangement) with another budget of $100 billion.
Presently, both can just slightly counter the influence of Western institutions; for example, the
credit volume of NDB is around $3.5 billion, whereas that of the World Bank amounts to $60
billion. However, the foundation has an important symbolic significance. Moreover, several
agreements are concluded 2014 concerning the cooperation between BRICS export credit
agencies, collaboration in energy policy, defense policy, and cooperation in the fields of
4
Deeper integration means to move from informal economic integration to a formal agreement such as a free
trade agreement, to a common market.
5
Brazil is not a classic emerging market from the economic point of view. The catching up period was in the 60s
and 70s (e.g. 1973 growth rate 14%), whereas today has Brazil only moderate growth rates. But structural
problems (like high income inequality, lack of rural development etc) have repeatedly led to decelerate
development and to a necessity of new alliances
6
South Africa is considered as "atypical" BRICS member (see smallest population, military expenditures etc),
but is considered as important gateway to Sub-Sahara- Africa. Other African countries such as Nigeria or
Namibia would have been possible alternatives, but such an entry into an existing alliance depends on political
will, internal situation and previous relations with the alliance partners.
3
innovation and research. Currently, a planned free trade agreement (FTA) between the BRICS
is examined for its feasibility. The China Association of International Trade proposes bilateral
FTAs of China with each BRICS as a first step to a BRICS-wide FTA. A reason is that the
Chinese trade flow with other BRICS plays the most important role (see next sections). But
till today, only the FTA between the Mercosur (Brazil) and India has been signed (in 2009,
see Sharma (2014) and appendix I).
Today, the five BRICS states represent around 40 percent of the world population (ca. 3.01
billion people in 2013) and 25 percent of the global GDP in 2011 (projected for 2020 are
about 33%).7 The BRICS will probably replace the G7 in GDP (in PPP) during the next ten
years. Only the US and Japan +will still be among the largest economies worldwide (Wilson,
2003; Armijo, 2007 and Wade, 2011). Another important issue that works in favor of BRICS
is that global problems are unsolvable without the large and fast-growing emerging markets of
China and India (Pritchett, 2015). As a consequence, some representatives of the emerging
markets were temporarily involved in the G8 plus 5 (China, India, Mexico, South Africa and
Brazil), but this process (G8+5) is presently not pursued further because some of the G8 states
have been against an enlargement of the G8, and Russia has been suspended in 2014 as a
consequence of the Ukraine crisis. This means that the BRICS (whatever the composition
may be) and the G7 might be the two partners or competitors to discuss and struggle for
answers to global problems.8 In this context Pritchett (2015) mentions that developing and
emerging countries are establishing their own institutions (like the Development Bank of
Latin America) to get reliable partners to build up appropriate infrastructure and sustainable
development. Western institutions are tending now to less growth-focused development
agendas, e.g. promoting democratic societies; but these policies often miss the goal.
Our empirical analysis reveals a steady increase of national power of the BRICS members,
mainly driven by China and Russia. This supports the indications by several authors, that
member(s) of this alliance could challenge the dominant nation, US, and overturn the existing
distribution of power. The five countries show an increasing economic interdependence, e.g.
the inter-continental BRICS trade increases by more than 1400 percent! It seems that the
economic integration process and the development of national power go hand in hand in the
case of BRICS. One might conclude that this alliance has the potential as a system-relevant
7
8
See World Development Indicator database.
Another platform could be G7 plus G77; but presently the G77 is just a loose coalition of developing countries.
4
platform for the international order and world economy. But its development depends on the
political will in all of the five countries. The latter cannot be taken for granted as we refer to
five quite different political systems.
The rest of this paper is organized as follows. In Section 2 we summarize the previous
findings of political science and economics along with the details of the above-mentioned
theories (PTT and EIT). Section 3 is dedicated to the illustration and discussion of the
political and economic development of BRICS, underpinned by empirical evidences. Finally,
in Section 4 we discuss our conclusions and derive the challenges for future research.
2. Literature overview & theoretical embedding
Most of the scientific work on the BRICS has been aimed at fathoming how global change
from a uni-polar to a bi- or multipolar world can occur in a peaceful way. In other words,
BRICS is regarded as a challenge for the presently established international order. The work
of political scientists is mainly based on the PTT. Several studies explain the power
distribution, measures for national power and (dis-)satisfaction with the existing international
order (Chan, 2008; Biersteker and Moret, 2014; Abdollahian and Kang, 2008; Glosny, 2010;
Efird, Kugler and Genna, 2002; Brawley, 2007 etc). Only quite recently, some studies on
BRICS have been published in economics; for example about intra-BRICS trade (Chatterjee,
Jena and Singh, 2014; Mathur and Dasgupta, 2013; Sandrey and Jensen, 2007 or Sharma and
Kallummal, 2012) and about FDI policy (Mlachila and Takebe, 2011). The economic studies
are mainly focused on economic integration.
2.1 Political science approach
The political science analyzes the reasons of the formation of this alliance in various studies
coming to different conclusions. Based on PTT, four possible (and certainly not only) reasons
dominate the literature. First, national power comes from alliances with other countries or
from internal capacities. It is assumed that national power is the key instrument to enforce or
defend own interests in a hierarchical world. Alliances like the BRICS platform offer the
opportunity to multiplicate influence and power worldwide. Thus, power is used to enforce its
own interests and improve geostrategic position (Kornegay, 2014). Common BRICS interests
are for example improving bargaining power at the multilateral level, the expansion of
regional influence, the ensuring of access to markets and natural resources, financial
cooperation, and finally the filling of the geopolitical interstice to usher in the post-unipolar
world (Kornegay, 2014 and Mathur and Dasgupta, 2013).
5
A second thinkable motivation to form such an alliance is to reduce the increasing influence
of the US and its allies in Asia, Latin America and the Middle East (think also of the NATO
East enlargement9), see MacFarlane (2006). For instance, some authors see the formation of
BRICS directly connected with desire for regional leadership, e.g. some former Soviet Union
countries like the Ukraine align itself to the Europe and the Western hemisphere and Russia
loses old allies. Clearly, Russia tries to prevent this.
Third, this BRICS alliance allows holding each other in check (Glosny, 2010). No emerging
country shall become a super power alone, e.g. to form a bi-polar world with the US. To avoid
such a bi-polar world is -- at least for Brazil, India and Russia -- a crucial motive (Garrett,
2010). As a consequence, the rivalry between China and Russia could be directed in a
constructive track via the BRICS platform. This goes in line with some individual reasons for
some BRICS members to participate. For example, Brazil hopes to boost its economy and to
improve its acceptance as a regional leader in Latin America (Sotero and Armijo, 2007).
Finally, the planned FTA between the US and the EU (Transatlantic Trade and Investment
Partnership agreement, TTIP10) as well as the established FTA between Canada and the EU
(Comprehensive Economic and Trade Agreement, CETA11) show on the one hand the race for
economically strategic partnerships worldwide but on the other hand the closer cooperation
between the Western economic powers. Consequently, TTIP and CETA are considered as a
great incentive to form a BRICS-FTA or sub BRICS FTAs (Krugman, 1991)12.
It remains to be seen whether the BRICS countries can translate their rapid economic growth
into long-term and sustainable development as well as in political power (see Brawley, 2007).
Hurdles can be the upcoming demand for political changes in China and Russia, social unrest
caused by social inequality in Brazil or India, and the still somewhat weak infrastructure in
South Africa. Mathur and Dasgupta (2013) see a lack of new key technologies in the BRICS,
but there is a huge potential to cooperate in this field in order to catch up with the G7 (in areas
like energy efficiency, aerospace engineering, geospatial technology, etc.). Some authors ask
whether the BRICS will be responsible contributors in a rapidly changing world (e.g. in the
9
NATO East enlargement in three waves: 1999: Hungary, Czech Rep. and Poland joined in the NATO. 2004:
Estonia, Latvia, Lithuania, Slovenia, Slovakia, Bulgaria and Romania; and 2009: Albania and Croatia.
10
TIPP – firstly initiated in the 1990s, since 2013 under negotiations.
11
CETA – signed in 2013; will be in force from 2016 on.
12
Krugman (1991) points out that a one bloc situation would maximize the global welfare (global free trade). He
assumes that for example a three-bloc world (planned TTIP, BRICS, FTAA (Free Trade Area of Americas))
would lead to the strongest welfare loss globally.
6
case of epidemics or natural disasters; see Biersteker and Moret, 2014 or Wade, 2011). China
and other emerging countries quite often asserts itself as a new great power but at the same
time defends itself as a developing country when the world is appealing to their reasonability
(‘too poor to bear international responsibility’: in 2013 China ranks still 84 in GDPpc).
As political scientists use the PTT to explain theoretically the global change and formation of
the BRICS, we sketch the main ideas of this approach. It is assumed that the international
political system is anarchic,13 where the main actors are states. The PTT is used to predict
potential tensions or conflicts when a dominant state loses its power, or a new one (or a
group) gains power. Organski (1968 a, b) uses a pyramid (Figure 1) with the most powerful
nation at the top (at present, the US), and the least powerful countries at the bottom.
Figure 1: Power distribution in the PPT14
A transition period starts when a great power in a secondary position challenges the top nation
to catch up with it in power. There are two preconditions to start such a transition period: first,
the contender is powerful enough to exercise global power, and second, this country is quite
dissatisfied with the status quo concerning the international distribution of power, see Lim
(2014). In such a situation, is assumed that powerful and dissatisfied states tend to overturn
the existing international order, because the dominant nation (and its allies) is usually not
willing to give up established privileges and advantages. However, we know from history that
13
The assumption of an anarchic structure does not mean that the international system is characterized by a
Hobbesian war of all against all; states cooperate with each other and create inter-state institutions (Gilpin, 2001)
14
Source: http://valueofdissent.blogspot.ch/2012/07/power-soft-power-china.html
7
the distribution of power and therewith the international system is changing over time.
Upcoming powers establish new institutions, forge alliances and campaign for less (and
maybe even non-) powerful states in order to replace the existing super-power, and to pursue
own interests. 15 The latter might be just the maximizing of economic benefits. A peaceful
change is possible when the dominant nation shares (or resigns) privileges and power, or
when the challenger holds back until it is as powerful as the dominant nation (and allies). In
those cases peaceful arrangements are very likely.
Table 1: Summary of BRICS papers in political science
Reference
Issues
Armijo (2007)
BRICs
Approach
countries
as
analytical Analysis of different indicators
category
Brawley (2007)
Theoretical embedding of BRICS Discussion of four different theory
foundation
Chan (2008)
approaches, including PTT
Analysis of national power of PTT, use of a composite index of
China and US over time (until national
2001) to test for power transition
Glosny (2010)
capacity,
Relative
Capacity Scores, etc.
Discussion about restraints of a Comparative
politics
methods
politics
methods
unipolar world and possibility of (includes PPT)
BRICS cooperation
Kahler, M.(2013)
Discussion about the rising powers Comparative
(Brazil, China and India) and (includes PPT)
global
change
in
multilateral
institutions
Lim (2014)
Assesses China’s satisfaction with PTT,
status quo
three
Assesses the role of Russia as an Comparative
(2006)
emerging power
15
et
to
assess
satisfaction
MacFarlane
Olinski
criteria
politics
methods
(includes PPT)
al Analysis of importance of IBSA Measures for national capacity
See also Lin (2015): he discusses China’s role as development partner for low-income countries in Africa.
8
(2014)
forum to regional leadership
Papa (2013)
Analysis of US response to the Comparative
BRICS foundation
Sciubba (2014)
politics
methods
(includes PPT)
Russia’s foreign policy is analyzed PTT but focusing on demographic
with
PTT;
connection
with extension
demographic development
Sotero & Armijo Disucssion about question which Comparative
(2007)
politics
methods
country is a BRICS countries , (includes PPT)
taking Brazil as example
Lemke and Werner (1996) argue that national power erodes by increasing distance in a
globalized world. They offer a modified PTT approach with regional hierarchies (see also
Gilpin, 2001). For example, Figure 2 shows different smaller and larger regional powers (see
cone B, C, etc.), which are ‘responsible’ for ‘smaller’ (in the sense of less powerful) countries
within their region. The super power A does not intervene at the regional level but just
delegate tasks. Another essential point is that cone A - being the super power - bears the
global responsibility, and therewith the highest costs (as we will see when looking for
example at the military expenditures). It remains to be seen whether one nation will be able or
willing to accept these obligations in the future (although cone A would have seemingly the
largest benefits). It is conceivable that cone A is a consortium of representatives from each
world region (e.g. the UN).
Figure 2: Distribution of power in a globalized world (Lemke and Werner, 1996)
If one wants to quantify some of these aspects, then a challenging point is to measure national
power. Obviously, there are several possibilities: GDP, military expenditures, the composite
9
index of national capacity’ (CINC)16, see for example De Soysa, Oneal and Park (1997) or
Houweling and Siccama (1988). The advantage of the latter is that for this composite index
we have a pretty long time series going back till the Congress of Vienna in 1815 (see
Appendix III for upward and downward power mobility of several states from 1816 to today).
A shortfall is that this index measures only the national material capabilities and strongly
emphasizes industrialization (De Soysa, Oneal and Park, 1997).
To assess dissatisfaction, different indicators are used: military expenditures, similarity of
domestic political system with hegemonic power, and participation in alliances. Lemke and
Werner (1996) claim that the rapid growth of military expenditures and military
modernization of China is a clear sign for dissatisfaction. Lim (2014) points out that the
deepening of regional integration in East and South East Asia shows the attempt to establish a
non-Western area of influence. In 1992 the ten ASEAN countries signed an FTA, and a few
years later, in 1997, ASEAN+3 was founded together with Japan, South Korea and China.
2.2 The Economic approach
In the economic literature, the EIT is used to explain the increasing economic
interdependence between countries as a result of globalization and technological progress.
Before becoming more specific it has to be said that the EIT is not a unique, self-contained
and clearly defined theory, but rather a mix of approaches. One may define economic
integration along Ziltener (2003) as an "…empirically observable process of increasing crossborder activities, cooperation and coordination …" between countries. It was developed by
Viner (1950) and Balassa (2013). The former introduced the concepts of trade creation and
diversion in the case of customs unions, and the latter introduced several extensions. The EIT
predicts three welfare effects: First, the static welfare effect (trade creation v. diversion);
second, the dynamic welfare effects (medium or even long-term growth effects via using
economies of scale and technological spillovers); third, other effects such as agglomeration
versus spread effects (see Sapir, 2011). The integration theory is closely intertwined with
growth theory and trade theory (Balassa, 2013; Baldwin and Venables, 1995; De Melo and
Panagariya, 1993). For example, take the Human Capital Augmented Solow growth model,
which predicts conditional income convergence worldwide. The main statement is that poorer
countries grow faster than richer countries over time, especially if one controls for growth-
16
CINC, developed by J. D. Singer, COW project, is composed of six variables: total population, urban
population, iron and steel production, energy consumption, military personnel and military expenditures.
10
relevant determinants (Mankiw, Romer and Weil, 1992). According to this, there are
countries or groups of countries which run successfully through the predicted catching-up
process like Japan did during the 60s and 70s, or later South Korea and Singapore (Shin,
1996, Mathews, 2009). With increasing GDP growth and successful catching-up process,
these countries integrate more and more in the world economy, and therefore increasingly
participate in the international trade.
According to the trade theory (see for example Anderson and Wincoop, 2003, and Disdier and
Head, 2008), countries trade more if they share a common border, language and/or culture
and/or colonial links. The so called “natural trading partner” hypothesis is based on the idea
that such trade relations raise welfare because the probability of trade diversion is reduced and
transport costs are minimized (Schiff, 1999). Thus, bilateral trade and FDI flows decrease
with increasing distance relating to geographical remoteness, as well as cultural, historical
and/or linguistic dis-similarities. As a consequence, inter-regional cooperation is theoretically
not that successful, and often driven by politics.17 After the Cold War, there has been a huge
wave of regionalization, and many agreements were signed among countries on the same
continent (Gil-Pareja et al, 2012). But technological progress and globalization lead also to an
increasing number of inter-regional or intercontinental agreements. The reasons are various:
access to a broader market (e.g. China-Switzerland FTA), improvement of competitiveness
(Japan-Mexico FTA) and geopolitical objectives (US-Israel FTA). Decreasing transportation
costs and increasing international division of labor lead automatically to more intensive
interregional trade relations (Bougheas, et al, 1999 and Gil-Pareja et al, 2012). For example,
the intra-BRICS trade has increased eleven-fold and the intra-FDI almost doubled since 2001,
see Figure 4.
Chatterjee, Jena and Singh (2014) analyze the intra-BRICS trade flow over the last five years.
They use the Finger-Kreinin Index to illustrate the degree of similarity in the BRICS export
structure and the Relative Export Competitive Pressure Index (RECPI) to calculate the
average degree of competition within the BRICS. For example, between 2009 and 2013,
China, India and Russia's trade complementarity was low and the RECPI shows only
moderate competition among them.
17
Other inter-regional cooperations are for example: Japan-Mexico FTA (2005); China-Switzerland FTA (2014);
Israel-Canada (1997); Turkey-Chile (2011); China-Costa Rica (2011); South Africa-EU (2000) etc – see
http://rtais.wto.org/ui/PublicMaintainRTAHome.aspx
11
Sharma and Kallummal (2012) simulate a scenario of a full BRICS FTA. Not surprisingly,
they predict that the five member states would experience net welfare gains; especially China
and Brazil. India's and China's agricultural sectors would suffer under an FTA, but the
Brazilian and the Russian agricultural sector would have growth effects in their output. In the
manufacturing sectors all BRICS countries, except Brazil, are expected to have positive
production growth effects by such an FTA. The simulation shows a significant increase of
intra-BRICS trade, especially for manufacturing goods. A maybe less obvious outcome of the
simulation is that non-BRICS members like the European Union and the US would
experience negative welfare effects.
Table 2: Summary of economic BRICS paper
Reference
Issues
Bhattacharya
Approach
& Simulate trade potentials of a Gravity model to analyze
Bhattacharyay (2007)
planned FTA between India and trade creation and diversion
China
Canela,
Collazo
& Analysis of factors which explain Panel data analysis, 1995-
Santiso (2006)
capital flow to the four BRIC
2005
(before
BRIC
foundation)
Chatterjee,
Jena
& Analysis
Singh (2014)
of
intra-BRICS
trade Finger-Kreinin
and
2009-2013 focusing on India and Relative Export Competitive
competitiveness
Griffith-Jones (2014)
Index
Pressure Index
Discussion of New Development Descriptive statistics
Bank
(BRICS
Bank)
and
its
potential
Mathur & Dasgupta Empirical analysis of trade and FDI Descriptive statistics
(2013)
among BRICS with special focus on
institutions
Mlachila & Takebe Analysis of FDI flow from BRIC to Descriptive statistics
(2011)
low income countries with focus on
China’s FDI
Pradhan, Dasgupta & Examine
the
causality between Panel
data
vector
12
Bele (2013)
financial
development
and autoregression models
economic growth
Sandrey
&
(2007)
Jensen Detailed
analysis
of
triangular GTAP database; 2001-2005
trading relations between India, simulations
Brazil and South Africa (IBSA)
Sharma (2014)
Analysis of trade policy of BRICS Descriptive analysis
countries based on FTA policy
Sharma & Kallummal Study of impacts of planned BRIC GTAP trade analysis
(2012)
FTA (for different sectors)
Wilson (2003)
Overview to economic development Statistical approaches
of BRICS till 2050
Mlachila and Takebe (2011) analyze the increasing FDI flow from the BRICS to low income
countries (LIC), and ask whether these five countries act as growth drivers for developing
countries. They use case studies to investigate for example China's FDI flow in Africa. In the
last ten years, the Chinese FDIs in Africa went mainly to South Africa, Nigeria and Zambia.
In these countries, China invested predominantly in the agricultural sector, infrastructure and
agro-processing manufacturing industries.
Mathur and Dasgupta (2013) give a detailed overview of trade, institutions, and sectoral
policy of each BRICS country. The BRICS is an increasingly important alliance in the world
economy in terms of their trade flows, investment volume and demand, but with unexploited
potential for closer cooperation in R&D, trade policy and sectoral coordination. The two
authors point out that a next step for a deeper cooperation could be a network of bilateral or
trilateral FTAs among the BRICS. First steps have been made with the India-Mercosur FTA
in 2009, and with the current negotiations of an FTA between India and the Southern African
Customs Union (SACU). We assume that the planned BRICS FTA is an answer to the
question what middle and low income countries can do in the light of such "mega" FTAs like
the planned TTIP. This agreement is not only seen as an attempt to improve trade flows
between the European Union and the US, but also as a strategy to preserve the Western
influence and status quo in power distribution. In this context, Baldwin’s (2011) demand for
wide-range reforms of the WTO could bring constructive changes. The WTO could establish
a binding, standardized form of trade agreements to protect countries, consumers and firms
and to prevent this uncontrolled growth of FTAs.
13
3. New empirical evidences
We highlight some empirical facts regarding the development of national power (to address
the PTT approach) and economic integration of the BRICS. To measure power, we use the
recommended indicators GDP, population, size of armed forces and military expenditures
over time (Walt, 1985). To compare national power, we use ratios of capabilities between the
dominant state and the challengers (Table 3) to illustrate relative capability ratios of power
within the international system.
The EIT asks whether there are increasingly cross-border activities, cooperation and
coordination among partner countries (Ziltener, 2003). To analyze the economic integration,
we investigate trade relationships and FDI flows of the BRICS. The observation period covers
2001 to 2014, taking about six years before the foundation,18 and six years after. In addition,
we illustrate the economic development of the BRICS. Some basic statistics are summarized
in Table 1 providing important indicators of the BRICS countries, together with those for the
US, EU, and the LIC Mali for comparison. Russia exhibits the largest GDP pc with 23309.8
US$ among the BRICS, followed at some distance by Brazil and South Africa. India is by far
the poorest member of this group. Its GDP pc is only one-fifth of the Russian in 2012. China's
GDP pc is only half as large as that of Russia.
On the other hand, China has the largest GDP (PPP US$), followed at some distance by India
and Russia. South Africa shows the lowest GDP with 629.4$ billion in 2012. The GDP of
China is twenty-three-fold higher than the one of South-Africa. China's GDP is more than
twice as large as the Indian income. As presumed, China is the BRICS country with the
highest average GDP growth rates, but it should be emphasized that also India lies above the
global average growth rates during the last ten years. In contrast, Brazil and South Africa
show lower GDP growth rates. It is often argued that this is due to structural problems such as
corruption, high inequality, but also weak rural development.
Measured in schooling years, the education level is highest in Russia with an average of 11.59
years (the European average is 10.8 years). India has the lowest one with 6.69 years; followed
by China with 7.66 years. But we see clear progresses in basic education and elimination of
illiteracy in all five countries. The Indian literacy rate has increased from 40.8% in 1981 to
62.8 % in 2006; and the Chinese literacy rate increased from 65.5% in 1982 to 95.1% in 2010.
18
Note that there is no clear foundation date but the first meetings with effective decisions were hold in 2006
such that 2007 or 2008 can be seen as the real starting points.
14
Table 3: Economic indicators of BRICS, 201219
Population
total, mill.
GDP,
PPP
GDP pc
GDP
growth
Life
expectancy
Schooling
Military
years (Ø) expenditures
Brazil
198.6
2845.3
14323.1
3.7
73.6
8.34
31456
China
1350.3
14528.6
10756.5
10.2
75.1
7.66
188460
India
1236.1
6245.4
5050.1
7.5
66.2
6.69
47398
Russia
143.1
3337.4
23309.8
4.1
70.4
11.59
87836
SAfrica
52.2
629.4
12041.6
3.4
56.1
9.72
4108
USA
313.8
15877.5
50585.7
1.7
78.7
13.18
640221
EU-28
507.4
17422.2
34429.6
1.0
80.5
10.80
276047
14.8
24.3
1602.7
4.1
54.6
1.97
154
reference
Mali
Table 4 shows us different indices to measure development, inequality and globalization.
Looking at the inequality-adjusted Human Development Index (HDI) we notice that three of
the BRICS countries are ranked among the top-hundred countries in the HDI-ranking, but no
country is under the top fifty. That means they are still emerging countries with typical
weaknesses of middle income countries (less developed health care systems, lack of human
resource management, high inequality, etc.). Interesting is that Russia, the only re-emerging
country, is still ranked as 57th (best among the BRICS, though) despite declining life
expectancy. There is a significant difference in development between Russia on the top of the
BRICS and India with rank 135. Comparing with the reference value of the US, then we note
the huge distance from the 9th ranked country US and the best performer Russia, and get also
an idea of the relative distance between the BRICS states.
The Gini-Index indicates a very high inequality for Brazil and South Africa with 52.7
respectively 65.0, where a wealthy upper class is facing a still very poor underclass. China
reports a moderate Gini value of 42.1 since 2002, surprisingly (and generally much doubted)
when having in mind the increasing rural-urban income inequality in China. In India we
observe more inequality in the last two decades (from 30.8 in 1994 to 33.9 in 2013).
19
Note: GDP growth rates (in ten year average) and military expenditure by country (SIPRI database) in
constant US$ million); GDP PPP (US$ in billion) and GDP pc in PPP$ in constant US$, 2011; Average
schooling years: Barro Lee database; Reference values for HIC the US; for LIC Mali.
15
Table 4: Economic indicators of BRICS, 201420
Giniindex
HDI index
KOF globalization Corruption index
index
Brazil
52.7
79th rank
76th rank (59.21)
69th rank
China
42.1
91st rank
73th rank (59.43)
100th rank
India
33.9
135th rank
107th rank (51.57)
85th rank
Russia
39.7
57th rank
48th rank (67.78)
136th rank
South Africa
65.0
118th rank
54th rank (64.39)
67nd rank
Reference values for comparison:
USA
41.1
9th rank
32nd rank (74.94)
17th rank
Mali
33.0
176th rank
128th rank (46.65)
115th rank
The corruption index of Transparency International shows us an interesting picture: Brazil
and South Africa have the lowest corruption among the five countries; Russia and China are
the most corruptive countries of the BRICS. The USA serves again as a benchmark being here
at rank 17. It can be concluded that there is a huge potential of development in areas such as
combating corruption, reduction of inequality and the improvement of human development.
According to the KOF globalization index, Russia is the most globalized country among the
BRICS, whereas India is the less globalized one. This index measures the following three
dimensions of globalization: economic, social and political indicators. We observe a rapid
globalization of the BRICS over the last decades, but it remains a significant distance to the
USA (32nd rank with 74.94).
Another interesting point is that the BRICS nations face different demographic challenges.
The population growth rates for China and Russia are very low with 0.49 respectively 0.22
percent in 2013 (Scuibba, 2014)). The population starts ageing much earlier than in other
middle income countries (take Turkey with 1.25 or Pakistan with 1.65 percentages). For
Russia this can lead to a shortage of labour, higher health costs and less innovativeness. While
China has often be considered as threatened by overcrowding in the past, it now has loosened
the one-child policy (i.e. since 2014).
20
Note: KOF globalization index: 1st rank Belgium; Corruption Index by Transparency International;
http://cpi.transparency.org/cpi2013/results/#myAnchor2 (best ranked Denmark with 92 scores); HDI best ranked
country Norway with 0.944; Inequality adjusted HDI: no changes for China, India and South Africa, but three
ranks higher for Russia and sixteen ranks down for Brazil.
16
In Table 5 we use the Lemke and Reed (1996) – but see also Walt (1985) - approach and
calculate the relative national power with different variables. The US as current superpower
(and the G7, respectively) serves for giving reference points. As can be seen in Table 5, the
Western alliance has an incontrovertible ‘advantage’ in military expenditures. The US budget
alone composes 640 billion US$, whereas the BRICS expenditures amount to only 359 billion
US$. The BRICS are faced with a ratio of 0.56 in military expenditures: that means the US
military expenditures are almost twice as much as the BRICS expenditures. However, Russian
and Chinese military expenditures have increased strongly over the last ten years: Chinas
military budget increases from 45422 billion US$ in 2001 to 188460 US$ in 2012; and the
Russian budget increased from 33700 billion US$ in 2001 to 87836 billion US$ in 2012, with a further increasing tendency. 21 Due to the huge populations in China and India, the
picture is reversed regarding the total armed forces of the BRICS.
Table 5: Ratios of capabilities of BRICS in 2012 (reference the US and other G7)
Coalitions
GDP
Population
Armed forces Military expend.
China/US
0.91
4.30
2.00
0.29
BRICS/US
1.73
9.49
5.26
0.56
China+Russia/US
1.12
4.75
2.91
0.43
BRICS/G7
0.85
3.99
2.74
0.39
Note: Authors calculations; sources WDI and SIPRI.
The GDP ratio shows us a nearly balanced situation between China and the US as well as
between China & Russia and the G7 countries, but there is a clear advantage regarding the
future for the five emerging countries due to the growth dynamics (see also Wilson, 2003).
As indicated, the BRICS phenomenon is to a good part considered from the economic
integration and trade point of view. The five emerging markets account for almost 20
percentage of global trade. According to the BRICS Action Plan (signed 2014 in Fortaleza), a
major objective is to increase significantly the intra-trade and intra-investment flows among
the five member states. Intra-BRICS trade was already about US$ 296 billion in 2013, but
their goal is to increase the intra-trade to 500 US$ billion in 2015. In fact, the share of intra
BRICS trade was very low with only 3 percentages in 1990, but we have been observing an
21
See SIPRI data: Russia's military expenditures in 1988 371073 billion US$; more than China today. But after
the collapse of the Soviet Union, the investment in the military sectors decreased rapidly.
17
amazing increase over the last two decades. Since the nineties, the trade openness of the five
countries increased from 24.8 (export plus import of goods and services as a percentage of
GDP) in 1992 to 56.6 in 2013 (world average 61 percent). The main trade goods of the five
BRICS countries are: 1) mineral fuels, oils, distillation products; 2) ores, slag and ash; 3)
organic chemicals; 4) electrical, electronic equipment; 5) machinery, nuclear reactors, boilers;
6) plastics and articles thereof; 7) iron and steel; 8) vehicles other than railway, tramway.22
The export structures seem to be similar (Mathur and Dasgupta, 2013); Brazil and Russia
export natural resources and commodities, while China and India imports those goods.
China is the strongest exporter in the manufacturing sector and India in pharmaceuticals,
software engineering and textiles. In the nearest future, trade facilitations will help to boost
intra-BRICS trade, but a significantly large increase of intra-BRICS trade can only be reached
by promotion of intra-industrial trade in the framework of a comprehensive economic
partnership agreement (Chatterjee, Jena and Singh, 2014). This agreement would naturally
cover behind-the-border issues such as intellectual property rights, competition regulations,
SMEs and investment promotion, etc. The question will be whether it needs a detour though
bilateral or trilateral agreements to generate a BRICS-wide agreement.
Figure 3: Intra-BRICS trade flows (exports), 2001-2013 (ITC data)
Trade Value (in US$Mn)
45200
27
40200
84
35200
85
30200
26
25200
12
20200
29
87
15200
39
10200
72
5200
52
200
2001
2003
2005
2007
2009
2011
2013
Note: Trade codes: 27 Mineral fuels, oils and distillation products; 84 Machinery, nuclear reactors and boilers;
85 Electrical, electronic equipment; 26 Ores, slag and ash; 12 Oil seed, oleagic fruits, grain and seed; 29 Organic
chemicals; 87 Vehicles other than railway, tramway; 39 Plastics and articles thereof; 72 Iron and steel; 52 Cotton
22
See International Trade Center ITC database; UNCOMTRADE data, WITS 2013
18
Figure 3 shows the intra-BRICS trade from 2001 to 2013 for the ten most important trading
product categories. There is a huge raise of trade volume in these categories since 2001, see
for example product groups 27, 84 and 85. In 2001, the product category 85 “electrical and
electronical equipment” was most traded. But since 2007, the product group “mineral fuels,
oils and distillation products” is the most important trade good. The BRICS trade of mineral
fuels and oils has multiplied thirty-five-fold. Product group 26 “ores, slag and ash”, used in
cement industry and road construction, increases rapidly over the time; from 955 million US$
in 2001 to 28665 million US$ in 2013.
The intra-BRICS trade of machinery products (84) is steadily growing over the observation
period and is today the second most traded product category. For example the trade between
China and the other members is focused on "automatic data processing machines” (code
8471) within this category. The trade of product group 12 “oil seed, oleagic fruits, grain and
seed” is concentrated on six products; for example locust and soya beans and groundnuts for
the food industry, medical plants for pharmaceuticals, and oil seeds and seeds for sowing. The
trade of goods of category 12 has multiplied twenty-nine-fold from 2001 to 2013. An
interesting point is that the product category 29 “organic chemicals” shows only a tenfold
increase over the last twelve years. This product category is used in cosmetic industry,
medicine, pharmaceutical industry, farming, and agricultural sector. The trade of products
such as vehicles, iron and steel and plastics might increase with a free trade agreement in the
future. To mention is the high share of intra-trade regarding raw material (e.g. fuels, ores,
ashes).
The dark-dashed (top) line in Figure 4 illustrates the intra-BRICS exports over all product
categories from 2001 to 2013. There is doubtless a strong (from 21084 million US$ in 2001 to
296403 million US$ in 2013) and steadily (except for 2009 due to the international crises)
increase of intra-trade between the five members, especially since 2007. The question is
whether this is really due to BRICS cooperation or just due to globalization and decreasing
transportation costs. This might be answered when we compare it with synthetic clones,23 i.e.
taking five other emerging country groups. For example, the lowest (solid) line in Figure 4
shows the trade development between Nigeria, Turkey, Pakistan, Mexico and Latvia. This
clone shows only a very slightly increase of trade flow among each other from 2001 and
23
Selection of clones: We have selected five different inter-continental clone groups. All countries are from
different continents, and/or have high GDP growth rates over the last ten years and/or play an important role in
its region (such as Pakistan) and/or are populous countries.
19
2013. Two other potential clones are Chile, Indonesia, Ukraine, Turkey and Nigeria (solid line
with squares) or Botswana, India, Chile, Ukraine and Vietnam (dot-dashed line). Also they
stay clearly behind the BRICS development. One might then argue that most of the trade
increase is driven by the Chinese exports but not the BRICS platform. So let us include China
in the clone and look for example at Argentina, China, Egypt, Namibia and Ukraine (medium
dashed – third from the top - line) or at Argentina, China, Indonesia, Kazakhstan and
Tanzania (dotted line – second from the top).
Figure 4: Intra-BRICS exports, total over all product categories, 2001-2013 (darkdashed) compared to synthetic clones that have no official cooperation initiative.
Trade value in US$mn
250800
200800
150800
100800
50800
800
2001
2003
2005
2007
2009
2011
2013
The latter clone groups show that China does indeed play an important role, but also these
synthetic groups are far below the strong increase we observe for the BRICS. So we see that
alternative constellations of emerging countries show not such a steady increase of the trade
flow, but it is interesting to see that China is such an important driver for trade relations
among emerging countries in any constellation. Geographical distance may stay important for
trade flows but intercontinental relations of emerging countries record a steady rise of trade
relations (Gil-Pareja et al, 2012).
Figure 5 shows the (decomposed by country of origin) intra-BRICS FDI outflow among the
five markets. For reasons of data (non-)availability, we compare only 2007 with 2012. The
FDI flow has increased during this period by 39 percentages. In 2007 the Chinese share of the
intra BRICS FDI was 72 percentage, but in 2012 ‘only’ 55 percentage what was mainly
driven by the stronger engagement of the other members but not an outflow reduction by
20
China. For example, the Brazilian share of intra-FDI has increased more than sevenfold, and
the Russian share has more than doubled. But BRICS states still invest primarily in their own
respective regions, e.g. around 66 percentages of the Chinese FDIs go to Asia (in 2012).
Figure 5: Intra-BRICS FDI outflow (in mill US$) 2007 and 2012
2500
2000
Russia
1500
SouthA
China
1000
India
Brazil
500
0
1
2
Figure 6: Comparison of intra-trade BRICS with military expenditures (in US$mn)
351400
301400
251400
201400
151400
101400
51400
1400
1997 1999 2001 2003 2005 2007 2009 2011 2013
Milex
BRICStrade
To bring PTT and EIT together, Figure 6 compares the trend of a power measure (here
military expenditures) with the trend of an economic integration proxy (here intra-BRICS
trade). Since 2001, there is a significant increase in military expenditures of the BRICS,
mainly caused by China and Russia. At the same time, the intra-BRICS trade relations
become more and more important (with a little setback during the financial crisis 2008/09). It
is amazing to see that these two lines exhibit almost parallel movements except for 2008/9.
21
Figure 7: Distance measure (Military expenditures BRICS v. clones' average)
300000
250000
200000
150000
100000
50000
0
2001
2003
2005
2007
diff_milex
2009
2011
diff_trade
2013
Note: In Figure 4 we use five clones; here we take the average of these clones' military expenditures over time.
As time series are measured in absolute values, they often exhibit similar (though not
parallel!) trends over time just by nature. In Figure 7 we calculate the distances of military
expenditures of BRICS with the average military expenditures of the five clone groups (see
diff_milex). This corresponds to a natural detrending of these series. The resulting blue line
shows us an increasing distance of military expenditures between the clone groups and the
BRICS over time. The red line shows the distance of intra-BRICS trade with the average
intra-trade of the five clones. Again we observe an increasing distance. This exercise shows
that no matter whether we look at the absolute values or at the distances to the clones, in both
cases we detect a strong co-integration between economic integration and power development
for the BRICS. This can also be seen when plotting the economic integration measure (intraBRICS trade) against the power measure (military expenditures). We can see in Figure 8 that
the relation between power and economic integration is almost a monotonic relationship for
these emerging countries. That means, with an increasing economic integration (globally,
inter-regional and national), the BRICS countries try to raise their national power (here used
proxy military expenditures), mainly driven by China and Russia. Furthermore, alliances
between emerging countries trade more and more, and in parallel also national power
increases. Note that over all countries, one would expect an inverted U-shaped curve as LICs
trade less and have no power, but high income countries (with a finished catching-up process)
trade much and have moderate or less power (excluding the dominant state).
22
Figure 8: Power measures v. intra-BRICS trade24
In Table 6 we compare the growth rates of intra-regional trade of the respective BRICS
countries with its regional integration partners (e.g. Brazil and Mercosur partner) with the
growth rates of inter-regional trade of a BRICS country with all other BRICS members. We
select the following regional integration groups for the five BRICS: For Brazil the Mercosur,
for China the China-ASEAN-FTA 25 (CAFTA), for India the South Asian Association of
Regional Cooperation (SAARC), for Russia the Commonwealth of Independent States (CIS)
and for South Africa the SACU.
Table 6: Comparison of intra- and inter trade growth for BRICS, 2001-2014
Brazil
China
India
Russia
South Africa
Intra-trade
0.52
2.49
2.51
2.10
1.52
BRICS-trade
1.13
2.61
1.50
2.38
2.90
Note: Intraregional trade growth covers trade development of Mercosur, CAFTA, SAARC, CIS and SACU from
2001 to 2014. Interregional trade growth gives information relating to the five countries' exports to the other
BRICS partners. Trade data: ITC, author's calculation (differences of log exports)
Let us take for an example Brazil and its trade with the Mercosur partners and the BRICS,
respectively: In 2001, the intra-regional trade of the Mercosur amounted to 17402 mn US$,
but the Brazilian exports with the other BRICS accounted only for 1734 mn US$. The intraregional trade was much higher in 2001, also due to the foundation of the Mercosur in 1991.
In 2014, the intra-regional and inter-BRICS trade is almost approximated: intra-trade: 58323
24
Left picture: BRIC average of the CINC index (without South Africa) plotted to intra-BRICS trade; Right
picture: Proxy for power: sum of military expenditures plotted to intra-BRICS trade.
25
Since 2005 in force
23
mn and inter-trade (BRICS) 50459 mn US$. This means, the Brazilian trade with the BRICS
has grown twice as much as the intra-Mercosur trade in this period. Due to increasing
globalization, technological progress and political will, the inter-regional trade has gained in
importance, despite geographical the distances (Gil-Pareja et al, 2012).
We observe the same development for the other BRICS members with CAFTA, the CIS and
the SACU, respectively. Note, that the intra-regional trade between the SACU members was
significantly lower (462mn US$) than between South Africa and the BRICS (2064 mn US$);
and these proportions have remained. Interestingly, the intra-trade of SAARC has increased
significantly more than the BRICS internal trade in this period. Due to sub-continental
conflicts, the SAARC members show a belated regional economic integration among each
other.
In this section, we have seen that economic integration processes and development of national
power go hand in hand in the case of the BRICS. Both the economic interdependence as well
as national power of the five BRICs countries gets increasingly stronger.
4. Conclusion
This article summarizes the previous insights concerning the BRICS formation from the
economics and political science. We use the most used theoretical approach to analyse the
BRICS from each discipline and test whether these theories can be confirmed. The PTT
assumes that the distribution of power is changing over time. A transition period starts when a
contender (group of contenders) is dissatisfied with the current distribution of power and
strong enough to challenge the dominant state. The empirical studies have shown that the
BRICS cooperation is not yet strong enough to challenge the US if we use military
expenditures as proxy for national power. But there is a catching up process. If we use the
CINC index to measure national power, then China is the country with the largest national
power and capability since 2001 to challenge the US. The EIT supposes that globalization and
technological progress leads to economic integration and interdependence. This empirical
study show that the intra-BRICS trade grows steadily. But we ask whether this is really due to
the BRICS cooperation or just in line with decreasing transportation cost. If it is just in line
with for example decreasing trade cost, then also other emerging countries would show such a
strong inter-continental trade growth over the last years. We test it for five synthetic groups
among emerging countries and find that alternative constellations do not show such a strong
intra-continental trade flow. The results have shown that the BRICS or parts of the BRICS
have a potential for a system-relevant alliance.
24
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Global Economic Working Paper, no. 99.
Ziltener, P. (2003) Gibt es einen regionalen Integrationsprozess in Ostasien? MPIFG
Diskussion Paper 02/3.
Appendix I: BRICS and respective regional partners
Brazil
Mercosur
Argentina
Paraguay
Uruguay
Venezuela
Assoc. states
Bolivia
Chile
Colombia
Ecuador
Peru
China
ASEAN+3
Indonesia
Malaysia
Thailand
Philippines
Singapore
Brunei
Cambodia
Laos│
Myanmar
Vietnam
plus
Japan
South Korea
India
SAARC
Afghanistan
Bangladesh
Bhutan
Maldives
Nepal
Pakistan
Sri Lanka
BIMSTEC
Bangladesh
Myanmar
Bhutan
Nepal
Sri Lanka
Thailand
Russia
EurAsEC
Belarus
Kazakhstan
Kyrgyzstan
Tajikistan
Uzbekistan*
CIS (1991)
Armenia
Belarus
Geogria*
Kazakhstan
Kyrgyz Rep
Moldova Rep
Tajikistan
Turkmenistan*
Ukraine*
Trilateral FTA
Belarus
Kazakhstan (1997)
South Africa
SACU
Botswana
Lesotho
Namibia
Swaziland
SADC
Angola
Botswana
Dem. Congo
Lesotho
Madagascar
Malawi
Mauritius
Mozambique
Nambia
Seychelles
Swaziland
Tanzania
Zambia
Zimbabwe
Bilateral FTAs
Armenia (93)
Azerbaijan (93)
Belarus (93)
Georgia (94)
Kazakhstan (93)
Kyrgyz Rep (93)
Moldova (93)
Serbia (2006)
Tajikistan (93)
Turkmenistan (93)
Ukraine (94)
Uzbekistan (93)
Notes: CIS: Georgia contracted out 2008; Ukraine left the CIS 2014; Turkmenistan only associate member.
Eurasec: Uzbekistan suspended his membership in 2008. Sources: WTO RTA-IS 2014 and bilateral.org.
28
Appendix II
Composite Index of National Capability, 1942-2007
USA CHN RUS IND BRA
JP
KOR
UK
FRA ITA GER TUR
1946
.345
.104
.110
-
.011 .060
- .093
.020 .020
.149
.006
1951
.296
.112
.166 .015
.012 .040
.004 .071
.033 .018
.030
.010
1956
.286
.095
.175 .011
.011 .030
.008 .053
.032 .017
.038
.007
1961
.228
.109
.170 .012
.013 .035
.009 .043
.032 .018
.041
.007
1966
.206
.107
.169 .012
.016 .040
.008 .036
.028 .020
.037
.007
1971
.191
.108
.170 .012
.018 .051
.008 .030
.024 .020
.034
.008
1976
.151
.114
.172 .011
.020 .055
.010 .027
.023 .020
.033
.008
1981
.136
.118
.171 .011
.022 .052
.012 .025
.023 .019
.029
.009
1986
.131
.112
.170 .012
.024 .053
.015 .023
.020 .018
.026
.011
1991
.137
.108
.137 .012
.025 .056
.018 .025
.021 .019
.028
.013
1996
.144
.129
.060 .013
.025 .058
.024 .025
.024 .020
.032
.015
2001
.141
.150
.050 .014
.025 .053
.025 .022
.022 .019
.029
.015
2007
.144
.181
.043 .013
.024 .046
.024 .021
.019 .018
.026
.014
Sources: Five year averages. Original data are from COW:
www.correlatesofwar.org/COW2%20Data/Capabilities/nmc4.htm;
Appendix III
Long-term trend of CINC variable from 1816 to 2007
0.4
0.35
0.3
USA
0.25
UK
0.2
CHN
JP
0.15
RUS
0.1
GER
0.05
2007
1996
1986
1976
1966
1956
1946
1936
1926
1916
1906
1898
1888
1878
1868
1858
1848
1838
1828
1816
0
29