Explaining Brazil’s inconsistent engagement in global economic governance: neither accommodation or contestation, but both

The growing significance of rising powers has led to debates about their role in global economic governance, with expectations they will either challenge its neoliberal agenda or become ‘responsible stakeholders’. However, the reality is that the role of rising powers is inconsistent: in some areas they accept the neoliberal consensus, while in others they contest it. This article utilises the State Transformation Approach to explain the inconsistent positions of Brazil: its support for free trade at the WTO, and its contestation of capital account liberalisation at the IMF, followed by a reversal and acceptance of it after 2014. The article argues this inconsistency can only be understood by analysing the domestic context of foreign policymaking, particularly the fragmentation of its state and the balance of forces in its political economy. In relation to trade, the fragmentation of the state enabled the agro-export sector to dominate formulation of policy. In finance, on the other hand, the greater autonomy of policymakers, and a balance of forces favouring intervention enabled the promotion of capital controls. However, this was a contingent outcome of socio-political struggles, and once the balance of forces shifted from 2014, financial forces reasserted themselves provoking a return to the orthodoxy.