The evolution of soft balancing in informal institutions: the case of BRICS

Abstract

The concept of soft balancing emerged in 2005 to analyse how states engage in non-military balancing against the United States. By 2025, soft balancing has become extensively discussed in the context of BRICS, which has evolved from a loose grouping of diverse powers into an active, complex and rapidly growing entity. However, scholars remain divided on the nature and drivers of soft balancing within BRICS. How has BRICS developed into a robust soft balancing coalition? This article uses insights from compensatory layering—a process where transformative change occurs through sequential bargains over institutional design—to demonstrate how BRICS builds soft balancing collaborations, selectively institutionalizes some cooperative activities, and expands its scope to include both soft balancing and non-soft balancing elements. It clarifies balancing and non-balancing behaviours within BRICS, providing new insights into soft balancing in contemporary power dynamics. The study shows how states centre their cooperation around a specific informal institution, enabling effective soft balancing outcomes.

The concept of soft balancing emerged in 2005, following the 2003 decision by the United States and the United Kingdom to invade Iraq.¹ Other major powers formed an ad hoc coalition that refused to authorize this decision in the United Nations, thus using ‘nonmilitary tools to delay, frustrate, and undermine aggressive unilateral US military policies’.² As a foreign policy tool, soft balancing has evolved. According to T.V. Paul, it encompasses:

restraining the power or aggressive policies of a state through international institutions, concerted diplomacy via limited, informal ententes, and economic sanctions in order to make its aggressive actions less legitimate in the eyes of the world and hence its strategic goals more difficult to obtain.³

The challenges to US global engagements have also grown. In 2009, the BRIC countries (Brazil, Russia, India and China) became a self-standing group aiming to reform international financial institutions, support ‘a more democratic and just multi-polar world order’ and serve ‘common interests of emerging market economies and developing countries’.⁴ Although BRIC officials emphasized that the group was not anti-American, achieving multipolarity implicitly requires some form of soft balancing to restrain US hegemony and transform the system.⁵

In 2010, BRIC invited South Africa to join, forming BRICS. Since then, the group has invested in its development and created new institutions like the New Development Bank (NDB) and the Contingent Reserve Arrangement (CRA). In parallel, tensions between some BRICS countries and the US have intensified, and BRICS agendas directly restraining US power have gained prominence. The group not only refrained from isolating Russia after its invasion of Ukraine in 2022, but also increased its collaboration with the country. In 2023, South Africa's BRICS presidency sought to shield Russian President Vladimir Putin from arrest by the International Criminal Court (ICC).⁶ Moreover, BRICS officials amplified their criticism of US leadership. Before the 2023 BRICS summit in Johannesburg, South Africa's then ambassador-at-large to BRICS, Anil Sooklal, compared the international system to apartheid-era South Africa, terming it a system where a minority (‘a select few in the West’) decides for the majority.⁷ At the summit, BRICS leaders criticized unilateral sanctions and sought to accelerate de-dollarization by tasking finance officials to report on local currencies, payment instruments and platforms by the next summit.⁸ Systematic studies of BRICS cooperation demonstrate growing policy convergence among these countries and a high level of compliance with their institutional commitments.⁹ In 2024, BRICS expanded to include Egypt, Ethiopia, Iran and the United Arab Emirates as full members.¹⁰ Iran viewed its invitation a sign of the bloc's opposition to the US.¹¹ In October 2024, thirteen additional countries were invited as partners, including Algeria, Indonesia, Malaysia, Nigeria and Turkey, highlighting the group's momentum.

How has BRICS developed into a robust soft balancing coalition? The evolving complexity and unique structure of BRICS challenge our understanding of the development of soft balancing coalitions. Namely, BRICS cooperation includes both counter-hegemonic and cooperative elements, with its soft balancing aspects either remaining implicit or surfacing over time. Thus, scholars are divided on whether BRICS is a China–Russia driven soft balancing coalition or a growing entity jointly pursuing major soft balancing outcomes.¹² The lack of systematic analysis on the evolution of soft balancing coalitions reinforces critics' claims that the soft balancing research programme lacks conceptual clarity, empirical uniqueness and theoretical innovation, reducing it to diplomatic friction.¹³ Analysing BRICS' evolution highlights how soft balancing coalitions evolve and adapt to delegitimize targets and produce soft balancing outcomes. As states increasingly turn to informal institutions for policy coordination, BRICS offers valuable insights into future soft balancing strategies.¹⁴ By incorporating data on both BRICS and US policies, we complement qualitative research with quantitative evidence that distinguishes between soft balancing and institution-building strategies in BRICS' development. Additionally, we assess how the group's expansion affects its soft balancing capacity.

This study conceptualizes institutional evolution through compensatory layering—a mechanism through which transformative institutional change occurs via a sequence of compensatory bargains over institutional design.¹⁵ It demonstrates that, through this mechanism, BRICS has positioned itself as a focal institution for rising powers' soft balancing while advancing the member states' individual interests. As a result, BRICS countries strategically use the group to address mutual needs, selectively institutionalize cooperation and pursue a comprehensive agenda encompassing both balancing and non-balancing policies. These institutional characteristics shape BRICS' soft balancing outcomes, leading to effective soft balancing on certain issues while preserving the group's core cohesion.

In the next section we discuss BRICS as a soft balancing coalition and how such coalitions become robust. Then, we test the compensatory layering approach against BRICS cooperation between 2009 and 2024, and investigate BRICS institutional development concerning soft balancing outcomes. The article concludes by exploring new directions for the study of soft balancing in global governance.

BRICS as a soft balancing coalition

Robert Pape's initial soft balancing concept referred to major powers' use of ad hoc coalitions to curb the influence of the US' undesirable policies. Subsequent literature acknowledged that smaller powers can also jointly target the hegemon via issue-specific ad hoc coalitions.¹⁶ In 2002 seven African countries resisted US pressure to sign an article 98 agreement under the Rome Statute establishing the ICC, which would prevent those countries from suing US nationals for war crimes.¹⁷ Forming a coalition enabled them to scrutinize US policy while remaining major recipients of US aid.¹⁸

Soft balancing has also been discussed in the context of institutional balancing, or ‘initiating, utilizing, and dominating multilateral institutions … to pursue security under anarchy’.¹⁹ States engage in such balancing by either binding a target state within international institutions to constrain its behaviour (‘inclusive institutional balancing’), or by consolidating unity against it by excluding it from institutions (‘exclusive institutional balancing’).²⁰ Both formal and informal institutions are used to limit other states' actions, whether within or outside these structures.²¹ Informal institutions operate within established international institutional platforms, alongside them, or independently.²² For example, the ASEAN-initiated trilateral dialogue mechanism between China, Japan and South Korea after the 1998 Asian financial crisis effectively soft balanced against the US.

The contemporary power dynamic has largely revolved around rising powers engaging in informal institutions to exert pressure on the US while seeking to advance their own interests and status and diversify global leadership.²³ Balancing, in this scenario, is a long-term process of anti-hegemonic coalition-building to construct global multipolarity, rather than the rapid deepening of military cooperation aimed at external security threats.²⁴ Rising powers engage in strategic partnerships in the form of multi-issue minilaterals like the India–Brazil–South Africa (IBSA) Trilateral Dialogue, the Russia–India–China (RIC) strategic grouping, or BRICS.²⁵ Such partnerships lack strict hierarchies or full political or security coordination. They are based on advancing development, mutual political and economic support if one of the partners comes under external pressure, and promoting non-western bonding.²⁶ BRICS scholars have examined how individual member states use the group for soft balancing and manage internal balancing challenges, and how BRICS as a whole conducts soft balancing. Table 4 at the end of the article summarizes the key themes in existing BRICS soft balancing literature.

Despite valuable insights, this scholarship remains divided on the nature of BRICS as a soft balancing coalition. Some scholars view it as a China–Russia advocacy platform, while others question its soft balancing features and anti-American stance. Nonetheless, BRICS has emerged as a robust informal entity, coordinating soft balancing policies against external threats—whether a state, an unwanted policy or a systemic issue. The ‘robustness’ of an international institution refers to its capacity to withstand internal and external challenges, such as external pressures, internal disagreements and shifting power dynamics.²⁷ By this measure, BRICS' robustness has significantly increased since its first summit in 2009. Not only has the group survived, it has also expanded its membership, selectively institutionalized some areas of cooperation and developed a broad agenda that includes both balancing and non-balancing policies.

Theoretical challenges with soft balancing explanations arise, as we demonstrate here, because extant literature tends to focus on isolated aspects of BRICS' soft balancing or non-balancing activities, rather than developing a cohesive model that explains the evolution of BRICS' institutional characteristics and their connection to soft balancing outcomes.

Explaining BRICS' development and soft balancing outcomes

How did BRICS evolve into a robust soft balancing coalition with distinct institutional characteristics, while avoiding permanent structures (such as a secretariat or staff)²⁸ and maintaining its informality? To answer this question, we connect the theory of compensatory layering from institution-building studies with soft balancing theories. Scholars have traditionally divided the literature on international institutionalization into structure-driven and agent-driven approaches.²⁹ Structure-based theories, like the rational functionalist approach, are effective in ‘offering potential answers to what propelled informal minilateralism’ to balance, but fail to provide ‘sufficient tools to account for the finer dimensions of change’.³⁰ They also struggle with questions about how BRICS countries manage internal frictions.

Historical institutionalism offers deeper insights into the process of institutional development and the actors driving it.³¹ For example, James Mahoney and Kathleen Thelen examine endogenous institutional change through coalition-building, norm defection and norm reinterpretation.³² Applying this approach, scholars investigating BRICS' institutional development note the group's emergence as a natural site of cooperation over time, despite its diverse membership, and highlight its extensive cooperation infrastructure.³³ However, historical institutionalists view institutions as ongoing ‘processes’ or ‘trajectories’ without a defined equilibrium outcome.³⁴ In contrast, soft balancing analysis assumes stable input variables, such as internal power structure, institutional traits, or shared interests or identity, to explain consistent policy outputs. BRICS institutionalization has demonstrated recurring patterns, with smaller powers influencing the agenda through rotating presidencies, indicating that certain structural factors consistently influence outcomes.³⁵

Innovative theoretical approaches to institutional development in non-western contexts introduce compensatory layering as ‘a process through which transformative institutional change emerges from sequential bargaining over organizational design’.³⁶ It embeds iterated bargaining within historically contingent processes of institutional development, and occurs only when three conditions are met: when states cooperate within a focal institution, when power asymmetries among states are large, and when preferences over organizational design diverge. Then, member states can introduce new institutional layers that serve their interests by compensating the needs of others in a continuous renegotiation process, which results in ‘incremental adjustments to the organization's design’.³⁷ As states constantly apply compensatory layering in institutional bargaining, the institution can develop new traits that influence its output and soft balancing capacity.

While compensatory layering has been developed using formal organizations, its application in informal institutions is theoretically puzzling. The BRICS case is relevant because all three conditions are present. We posit that applying compensatory layering within BRICS' negotiation processes has shaped its institutional characteristics, allowing major powers to strengthen the soft balancing element in BRICS while accommodating the interests of other powers on non-balancing issues. Since 2009, China and Russia have been recognized as the only major powers in BRICS based on Correlates of War's State System Membership list.³⁸ Compensatory layering is expected to grant smaller powers (Brazil, India or South Africa) a platform to shape the BRICS agenda, request compensation from major powers and negotiate collective policies that align with their national interests. Major powers, in turn, are compelled to support these smaller states' interests to maintain group cohesion. By leveraging their greater agenda-setting capacity and compensating weaker members, major powers can often secure collective soft balancing objectives. Conversely, when policy preferences among member states diverge, they encounter increased bargaining costs, leading to more constrained soft balancing achievements. Consequently, BRICS as a group is expected to produce institutionalized soft balancing outcomes in certain issue areas, limited soft balancing in others and simultaneously engage in policy coordination in sectors not explicitly oriented towards soft balancing objectives.

Methodology

To examine the link between the BRICS group's evolution and soft balancing outcomes, we use a two-step approach. The first part of the analysis relies on the BRICS Convergence Index (BCI) dataset developed at Tufts University.³⁹ The BCI dataset, compiled from official BRICS documents and declarations, encompasses 2,444 data points, tracking the evolution of the group's cooperation across 47 issue areas between 2009 and 2021. To supplement the BCI data and measure BRICS cooperation between 2022 and 2024, we conducted a case-study analysis of the BRICS expansion, focusing on compensatory layering and linking institutional and soft balancing outcomes.

The BCI dataset categorizes 47 BRICS collaboration issues into three groups: political economy (for example IMF and World Bank reforms), security (e.g. cooperation on counterterrorism), and sustainable development (e.g. agricultural technology development). It also uses US government documents to examine US policies on the same issues and their divergence from the BRICS group's policies. Table 1 explains the three variables in the dataset that examine BRICS' institutional characteristics: 1) BRICS-level institutionalization of cooperation on specific issues, 2) the types of actors driving cooperation within BRICS, and 3) the presence of subcoalitions that can facilitate cooperation efforts, along with an additional, fourth variable: US–BRICS policy convergence. We standardized the values of all four variables to facilitate comparison. This process involved dividing each data point by the maximum value of the variable. For example, when BRICS reached level 3 (forming a working group or publishing a joint action plan) on the institutionalized output variable (with a maximum value of 5, representing the formation of a formal institution), the standardized score for this data point was calculated as 3/5 = 60 per cent. This standardization approach was consistently applied to each data point.

BRICS policy positions that deviate from those of the US are proposed as areas where BRICS aims to collectively challenge hegemonic norms through soft balancing. We posit that BRICS achieves effective collective soft balancing outcomes when it exhibits one or more of the following institutional characteristics: 1) institutionalization of soft balancing cooperation, 2) mobilization of different types of actors, and 3) the presence of subcoalitions to bolster cooperation. To examine the link between institutional characteristics and soft balancing outcomes over time, we use case-studies to investigate how BRICS increased the robustness of its soft balancing collaboration during the establishment of the NDB and the CRA in 2014, and in the years with the highest institutionalization based on the BCI: 2015 and 2017.

To examine BRICS' evolution between 2022 and 2024, and the relationship between institutional characteristics and soft balancing, this article presents a case-study of contestation over two key issues—monetary integration and expansion—that have dominated recent debates on institutional design. Data sources include the BRICS countries' official documents and BRICS summit resources from the University of Toronto's BRICS Information Centre website, as well as newspaper reports. We analyse specific instances of BRICS' soft balancing activities before and after the expansion to identify any shifts in strategy or effectiveness due to institutional changes. Additionally, US foreign policies are reviewed from a soft balancing perspective, using US government documents.

Soft balancing partnership in practice: the case of BRICS

When BRIC became an independent entity in 2009, it was one of many platforms addressing the structural challenge of unipolarity and the diversification of global leadership. The China–Russia partnership, along with IBSA and RIC trilaterals, also operated in this space. The inclusion of South Africa in the existing BRIC integrated much of IBSA's agenda, while investments in new institutions reinforced BRICS' role as a focal point for collaboration. However, with China as a member, power asymmetry became embedded into the group. Members have demonstrated preference divergence across several features of institutional design, whether in terms of scope of cooperation, content or anti-hegemonic orientation.

New BRICS institutions in 2014: institutionalizing soft balancing

BRICS' soft balancing is often discussed in the context of its new institutions, as the member countries see US and western dominance in global economic governance—especially finance—as a collective threat to their economic stability and national sovereignty. During the 2012 BRICS summit in New Delhi, India proposed establishing a new Development Bank to support global growth and development, complementing existing multilateral and regional financial institutions.⁴⁰ BRICS leaders established a joint working group for finance ministers, leading to the creation of the NDB and the related CRA.⁴¹

Compensatory layering The establishment of these entities in 2014 marked a major step in BRICS' efforts towards financial soft balancing, challenging the traditional dominance of western financial institutions.⁴² However, reaching consensus on the NDB's implementation was difficult. A point of contention was India's concern over China's potential financial dominance, leading India to propose opening its membership to western financial institutions to counterbalance China's influence.⁴³ China, seeking a bank with robust capabilities, proposed an initial capital subscription that proved too high for smaller BRICS economies like South Africa.⁴⁴ China and India also competed for the bank's headquarters, its voting share structure and the inaugural presidency.⁴⁵ These disputes were resolved through compensatory measures: China agreed to lower the initial capital requirement and support South Africa's bid for African headquarters in Johannesburg. In return, South Africa endorsed China's bid to host the bank headquarters in Shanghai. India agreed to this arrangement and ensured the first chairperson would be Indian.⁴⁶ Russia backed both China's revised capital subscription plan and India's chair, provided that the first chair of the board of governors would be Russian.⁴⁷

During this period, BRICS countries have also employed compensatory layering to influence institutional development in other cooperation areas. For instance, South Africa leveraged its role as the host of the 2013 BRICS summit to introduce various cooperative projects centred on infrastructure development in Africa.⁴⁸ Similarly, Brazil, when hosting the following year's summit, introduced various working groups, including the BRICS Expert Dialogue on e-Commerce, the BRICS Memorandum of Understanding on Cooperation in Science, Technology and Innovation, and a working group of BRICS experts of cyber security.⁴⁹

BRICS' use of compensatory layering through issue-trading and mutual concessions has enabled members to improve negotiation outcomes, reinforced its role as a focal point for cooperation, and facilitated the development of its collective identity. For example, at the 2014 China-hosted conference on the modernization of BRICS' governance system, BRICS officials and scholars discussed the group's internal tensions.⁵⁰ They acknowledged that issues like the ongoing China–India border dispute posed significant challenges to BRICS cooperation. However, they argued that such internal tensions could be managed by forging a strong collective identity through successful collaborations in global financial governance, sustainable development, climate, energy and maritime security, cybersecurity and other areas.⁵¹ This strategy proved effective, as BRICS not only remained resilient despite increasing tensions, but its summits also brought the leaders together, facilitating conflict resolution.

Institutional characteristics and soft balancing outcomes The use of compensatory layering has fostered distinct institutional traits that characterize BRICS' soft balancing. First, the establishment of the NDB and the CRA represents effective external institutional balancing. The NDB underscored BRICS countries' willingness to collectively invest major funds in creating non-western institutions that can help BRICS reduce reliance on the US dollar and on American influence in global finance.⁵² Second, all member states have shaped the BRICS agenda, contributing layers of institutional cooperation across various issues, not solely aimed at countering the hegemon (evidenced, for example, by the institutional contributions of South Africa and Brazil). Third, BRICS has engaged various domestic actors and facilitated the formation of subcoalitions to strengthen collaborative efforts.

Table 2 draws on the variables introduced in table 1 to examine the link between BRICS' institutional characteristics and soft balancing outcomes. We used the standardized percentage measurement introduced in the methodology section to calculate the average score of BRICS' institutional characteristics for specific years. For example, table 2 shows that in 2014, BRICS' institutionalized output on issues with divergent interests from the US averaged 31 per cent. This score suggests that BRICS' institutionalized output on divergent-interest issues fell between the ‘one out of five’ category (representing a joint statement by state leaders) and the ‘two out of five’ category (indicating an expert report or plan). Using these average scores, table 2 compares how BRICS' institutional characteristics differ on issues where the interests of BRICS and the US diverge, as opposed to those where they align.

In 2014, as table 2 shows, the BRICS group's policy positions diverged from US positions on 19 per cent of the examined issues. These issues include NDB-related developments, criticism of US military interventions abroad, supporting the UN as the only legitimate international authority to sanction foreign interventions,⁵³ cooperation on space arms control, and advocating for regulation through UN frameworks.⁵⁴ One could expect BRICS to effectively strengthen institutionalized cooperation on these issues as a soft balancing strategy. However, table 2 shows that BRICS' institutionalization on issues where it diverged from the US averaged 31 per cent, which is one percentage point lower than its institutionalized output on issues where BRICS' interests did not diverge from those of the US. Aside from the formation of the NDB and the CRA, BRICS' cooperation on issues divergent from US interests remains minimally institutionalized. Meanwhile, through repeated compensatory layering, BRICS has strengthened cooperation on issues where its interests align with those of the US. It deepened cooperation in science, technology, and innovation from 2014 by establishing regular ministerial meetings.⁵⁵ It also launched working groups or released joint action plans on international drug control, food security and agricultural development, and anti-corruption data sharing.⁵⁶ Additionally, BRICS saw greater mobilization of domestic actors and presence of subcoalitions in 2014 than it had in 2009. Table 2 also shows that in 2014, BRICS countries were more likely to mobilize domestic actors on issues with aligned interests with the US (scoring 40 per cent) than on those with divergent interests (scoring 33 per cent).

Overall, by 2014 BRICS had displayed some institutional characteristics, achieving successful institutionalization on certain soft balancing issues while cooperating on a wide range of issues—including both balancing and non-balancing elements. The US' stance toward BRICS' initiatives was complex: while the Obama administration did not oppose new funding for infrastructure, it criticized BRICS members' efforts to work around sanctions, impeded IMF voting reforms and resisted BRICS' initiatives to regulate cross-border ‘hot money’ flows.⁵⁷

A return to major power politics in 2015 and 2017?

While all BRICS members can influence the group's institutional characteristics through compensatory layering, major powers—specifically Russia and China—would be expected to have greater capacity to compensate other states and steer the institution in their favour. However, their influence is constrained by the need to maintain the group's internal cohesion and preserve its role as the focal point for cooperation. The 2015 and 2017 BRICS summits illustrate these institution-building dynamics. During these years, BRICS substantially broadened its scope of cooperation and deepened institutionalization of issues of particular interest to China and Russia, strengthening the group's soft balancing capabilities but also heightening internal frictions.

Compensatory layering In response to western sanctions following its annexation of Crimea in 2014, Russia sought to strengthen BRICS' institutional framework to counter western influence, capitalizing on its BRICS presidency in 2015.⁵⁸ That year, Russia's proactive institutional development had three distinct features. Firstly, Russia extensively employed joint working groups and action plans to institutionalize and synchronize BRICS policies. Secondly, it enhanced BRICS security cooperation by including new sectors and establishing more joint working groups. Lastly, Russia notably contributed to expanding societal cooperation within BRICS. Since Russia is interested in developing BRICS security cooperation, and China prioritizes economic and development issues, we expect each to advance their priorities in BRICS institutionalization during their presidencies. Table 3 illustrates the advancement of BRICS' institutional characteristics in 2015 (i.e. during Russia's presidency) and 2017 (China's presidency) compared to other years.

BRICS began collaborating on security matters before 2015, advocating for a comprehensive anti-terrorism agreement at the UN and opposing unilateral military interventions. However, much of this cooperation was largely rhetorical, reflected in joint statements, with BRICS' institutionalized output on security averaging just 19 per cent in 2014. Yet, in 2015, Russia's proactive approach led to the establishment of ten new working groups and joint action plans, causing institutionalized security cooperation to rise to 43 per cent. Notable initiatives in 2015 included the establishment of the BRICS Council on Anti-Money Laundering and Countering the Financing of Terrorism,⁵⁹ a working group to bolster cybersecurity cooperation, and a consultation mechanism for outer space security.⁶⁰ Introducing information exchange on counterterrorism and cybersecurity among BRICS countries and establishing related working groups broadened the scope of security collaboration and helped steer subsequent cooperative efforts.⁶¹ In 2015 Russia initiated the BRICS Consultative Meeting on the Middle East and North Africa (CMMENA) at deputy foreign minister level.⁶² The CMMENA became a key platform for Russia to align BRICS policies on critical regional issues, including the Syrian civil war. Notably, on 20 June 2018 the CMMENA issued a statement endorsing the Congress of the Syrian National Dialogue organized by Russia in Sochi, despite a boycott by the Syrian opposition.⁶³

Russia also significantly intensified BRICS' institutionalized cooperation in sustainable development, elevating it from 26 per cent in 2014 to 49 per cent in 2015. Sustainable development has always been a priority for BRICS members, and enhancing cooperation in this area has strengthened the group's cohesion and role as the focal point for cooperation. Moreover, Russia significantly widened the participation of various domestic actors within BRICS, including subnational governments, state-owned enterprises, the private sector, research institutions, think tanks and non-governmental organizations. Consequently, table 3 shows that the involvement of these domestic actors across all three issue areas saw a notable increase in 2015. For example, the 2015 BRICS summit introduced the Civil BRICS Forum to discuss strengthening ‘BRICS from below’ and ‘exploring more people- and environment-centered options through the focus on the development and empowerment of human capital’.⁶⁴ Russia's institution-building strategies were well received and strengthened the group's centrality.

However, some BRICS members were concerned about deepening security cooperation and Russia-led efforts to transform the group into a political or military alliance. Chinese expert Yu Changjiang noted that ‘[c]urrent BRICS collaboration is issue-based, essentially forming a network of partnerships. It is not equipped to shoulder the geopolitical and strategic objectives that Russia envisages’.⁶⁵ Indeed, in 2015 Russia was unable to elevate the institutionalization of BRICS security cooperation beyond the establishment of working groups or action plans. Nonetheless, the mechanisms established that year continued in subsequent BRICS engagements, demonstrating path dependence resulting from Russia's compensatory layering efforts in 2015.

Mirroring Russia's approach, China used its 2017 BRICS presidency to advance its own priority agenda—fostering economic cooperation within BRICS and with the global South, while seeking to assert its leadership in BRICS. To achieve these goals, China implemented a strategy of compensatory layering. It emphasized political economy and sustainable development, while deprioritizing security cooperation. The average levels of institutionalization of BRICS security issues decreased from 43 per cent in 2015 to 29 per cent in 2017. Political economy themes saw an increase in institutionalized output from 29 per cent in 2016 to 48 per cent in 2017. For instance, China's efforts to establish the CRA-aligned System of Exchange of Macroeconomic Information significantly reinforced the CRA's capacity. Also in 2017, under China's presidency, the BRICS countries established a local currency bond market and a local currency fund, representing a significant step in the group's efforts towards de-dollarization.⁶⁶ On the sustainable development front, China achieved an unprecedented 60 per cent rate of institutionalization and an 82 per cent rate of domestic actor involvement. Domestic actor involvement for political economy issues also increased to 78 per cent in 2017.

During the 2017 BRICS summit, China proposed a major institutional change to transform the BRICS group into a formidable economic and political platform capable of reforming global economic governance. China's foreign minister, Wang Yi, asserted that China wanted to ‘widen the circle of friends of the BRICS and turn it into the most influential platform for South–South cooperation in the world’.⁶⁷ The ‘BRICS+’ concept would expand BRICS membership while forming a broad, integrative platform to foster extensive economic collaboration, elevate BRICS' global status, and cement China's leadership within the group. South Africa and Russia endorsed China's expansion proposal.⁶⁸ However, Brazil and India, concerned about China's growing dominance within BRICS, omitted this topic from joint declarations during the 2019 and 2021 summits.

Institutional characteristics and soft balancing outcomes  Tables 2 and 3 present the institutional characteristics and soft balancing behaviours of BRICS in 2015 and 2017, with comparative data from India's BRICS presidency in 2016. By 2017 the number of issues across which BRICS and the US had diverging interests rose to 32 per cent of the total, up from 17 per cent in 2015 and just 9 per cent in 2009. This increase was partly due to the change in US leadership. The administration of Donald Trump (2017–2021) retreated from supporting multilateral institutions like the UN, the World Health Organization and the World Trade Organization, leading to vocal opposition from BRICS and increased divergence from the US between 2017 and 2020.⁶⁹

The above tables also show that, starting in 2015, BRICS has consistently realized higher degrees of institutionalization (institutionalized output—see table 2) on issues where the group's interests diverged from those of the US. The differential was 7 per cent (44 per cent minus 37 per cent) in 2015, escalating to 19 per cent (51 per cent minus 32 per cent) in 2017, which indicates a trend towards more institutionally entrenched exclusive institutional balancing against the US. Concurrently, there has been a significant increase in the involvement of domestic actors within BRICS. The mobilization of domestic actors on issues where BRICS and the US have diverging interests shows coordinated internal balancing efforts. In 2015 BRICS involved all three categories of domestic actor (state leaders, ministries/subnational governments and societal actors) in 74 per cent of the issues where BRICS' interests diverged from those of the US, and in 54 per cent of issues where there was no divergence. By 2017, these figures were 74 per cent and 71 percent, respectively, a sizeable increase from the 2014 levels of 33 percent and 40 percent. Overall, major BRICS powers shaped the coalition's institutional characteristics during their presidencies, fostering a stronger trend towards exclusive institutional balancing and some internal balancing against the US. However, China and Russia had to engage in compensatory layering to sway the coalition.

Reinforcing BRICS as a focal point in 2022–2024: between de-dollarization and expansion

Between 2022 and 2024, BRICS faced several major geopolitical developments, including the impact of the COVID-19 pandemic, the Russian invasion of Ukraine and the situation in the Middle East. These events have challenged the group's cohesion. The conflict in Ukraine adversely affected the NDB—the group's flagship project—by affecting its credit ratings, investor confidence and project-financing capabilities. Simultaneously, BRICS members demonstrated solidarity and mutual support by not isolating Russia and by deepening their health cooperation in the aftermath of the pandemic. The outbreak of war in the Middle East united BRICS countries in condemning Israel's military operation in Rafah in May and June 2024 and in endorsing Palestine's full membership in the UN.⁷⁰

Although the US does not formally recognize BRICS as a geopolitical threat, BRICS has undermined its priority agendas, especially in terms of isolating Russia. In response, the administration of Joe Biden (2021–2025) worked with G7 and EU allies and partners to adopt various measures to counter major BRICS powers and decrease the effects of soft balancing. Such measures have included imposing oil price caps at the G7 level to reduce Russia's revenues⁷¹ and threatening to expel some Chinese banks from the SWIFT financial messaging system, to halt their financial support to Russia.⁷² The administration also deepened cooperation through the Quadrilateral Security Dialogue (known as the Quad and involving Australia, India, Japan and the US) and the AUKUS security trilateral (between Australia, the UK and the US). Russia views the Quad as a ‘divisive’ and ‘exclusivist’ tool to pit India against China and strain Russia's partnership with India.⁷³ Against this broader geopolitical background, BRICS' internal dynamics between 2022 and 2024 revolved around the presidencies of China in 2022, of South Africa in 2023 and of Russia in 2024. Two themes stand out in terms of BRICS' institutional evolution as a soft balancing coalition during this period: de-dollarization and expansion.

Compensatory layering In 2022, as Russia was cut off from western financial mechanisms, it sought to intensify monetary cooperation within BRICS and accelerate progress on establishing a common currency.⁷⁴ The US' decision to sanction Russia and freeze its foreign reserves had a chilling effect on the willingness of other BRICS members to hold US assets, prompting an increase in demand for gold. It also reinforced BRICS' well-established stance against unilateral coercive measures. Although BRICS countries were committed to diversifying their currency portfolios, they were not ready to launch a non-dollar-based international payment system. Developing a BRICS currency was even more challenging, requiring institutional adjustments for deeper monetary integration. As Russia focused on currency issues, China—as the host of the 2022 BRICS summit—prioritized BRICS expansion. While other BRICS countries were not ready to enlarge the group, that year's summit declaration supported establishing expansion criteria.⁷⁵

The IBSA countries were generally less enthusiastic about these agendas. Media reports indicated concerns from Brazil and India about adding new members, and contestation over membership criteria.⁷⁶ Similarly, India argued that there was ‘no idea of a BRICS currency’, denying any plans for such discussions at the 2023 BRICS summit, despite South Africa, the host, previously indicating it as an agenda item.⁷⁷ Previously, the IBSA countries also found China and Russia's support for their increased status in the UN Security Council limited, and BRICS was falling short on accelerating UN reforms.

The results of the 2023 BRICS summit meant advances on all of these fronts. The summit declaration tasked BRICS' finance ministers and central bank governors ‘to consider the issue of local currencies, payment instruments and platforms and report back’ to the leaders by the time of the 2024 summit.⁷⁸ BRICS endorsed criteria for new members, which included ‘support[ing] the legitimate aspirations of emerging and developing countries from Africa, Asia and Latin America, including Brazil, India and South Africa, to play a greater role in international affairs, in particular in the United Nations, including its Security Council’.⁷⁹ Thus, the IBSA countries created an expectation for a broader group of countries to mobilize around their global goals. They also delayed decisions on currencies, shaped expansion criteria and added their trading partners as new members. Additionally, Russia sought to strengthen the expanded group by constructing the International North–South Transport Corridor to connect with Gulf countries and Africa, establishing a BRICS commission on transport, and supporting India's proposal to form a BRICS space exploration commission.⁸⁰

Institutional characteristics and soft balancing outcomes BRICS was initially designed to advance the interests of emerging markets and developing countries while advocating for multipolarity and reform of global institutions. Although it is not the only institution advancing these agendas, its cooperation has grown exponentially, and the NDB has become a well-funded entity. Even with less BRICS-friendly leaders in power such as Brazilian President Jair Bolsonaro (2019–2022), the group continued to develop, integrating various agendas from other groups like IBSA and RIC and reducing their appeal as outside options. Given the ongoing compensatory layering and limited alternatives, BRICS has remained a focal point for cooperation. However, the new institutional characteristics introduced after the 2023 BRICS summit could affect its soft balancing potential.

The January 2024 expansion of BRICS increased its membership, raising questions about the group's exclusive institutional balancing against the US and internal balancing within it. The inclusion of major trading partners, petrostates and states seeking to de-dollarize, along with the accelerated ambition to deliver on the BRICS payment mechanism and create a BRICS grain exchange, enhance the group's soft balancing orientation. China and Russia are now ‘actively working to consolidate the global majority’, positioning themselves as a force for democratization at the global level and using BRICS, along with the China-led Shanghai Cooperation Organisation, as the main pillars of the multipolar world order.⁸¹ Heightened political competition and crises have increased demand for BRICS membership, as non-BRICS states generally seek multi-alignment to hedge against uncertainty. This surge of interest highlights the broad appeal of BRICS' strategic narrative and its positioning as a focal point for cooperation. However, greater soft balancing orientation makes BRICS less appealing to some states like Saudi Arabia, which is still considering membership, and Argentina, which has left the group.

BRICS enlargement also complicates the process of consensus-building, as old members need to integrate new members and produce joint outputs. Additionally, host countries have previously relied on their frequent consecutive presidencies to accelerate action on their priorities, which is now less feasible; weaker powers will require extensive diplomatic engagement to affect institutional change. Soft balancing efforts against the US are likely to be most directly affected by the ability of China, Iran and Russia to influence the BRICS agenda and mobilize support for their interests. Although BRICS paused⁸² adding new full members, in 2024 the group introduced a new “partner country” category at the Kazan summit.⁸³ Moving forward, it will consider the preparedness of various countries to join its multidimensional agenda in some form, so the US may contend with BRICS-affiliated coalitions across institutions and issue areas.

Conclusion

The rapid evolution of BRICS as a soft balancing coalition, focused on accelerating systemic reform and challenging key aspects of US hegemony—such as the dominance of the US dollar in global finance—raises important institutional questions. The idea of forming coalitions to reshape the global order is not new; many past and present coalitions have sought to balance dominant powers and establish a more equitable economic system for emerging and developing countries. However, what sets BRICS apart is its development into a robust soft balancing coalition, generating new institutions and attracting a growing list of prospective members during a time of geopolitical conflict.

To examine the logic behind the transformative, incremental and largely unanticipated changes to BRICS, this study applied the compensatory layering mechanism to conceptualize the group's evolution. We demonstrated how BRICS' current design evolved through iterative bargaining, with successive agreements leading to the creation of institutional layers that expanded the coalition's scope and consequently improved soft balancing outcomes. Weaker states' demand for compensation both affected institutional characteristics and constrained the ability of major powers to dictate the group's institutional orientation.

While compensatory layering was first used to study formal organizations, we demonstrate that it also works in informal settings when its core conditions are met. Connecting it with soft balancing advances our understanding of contestation over institutional design. First, it reveals how soft balancing-orientated actors navigate challenging negotiations and develop new initiatives—both informal (within the group) and formal (like the NDB)—to advance their interests. Second, it highlights how different institutional layers—such as India's NDB initiative, China's push for expansion or Russia's de-dollarization efforts—not only broaden the group's scope but also have geopolitical impacts. While compensatory layering gives weaker actors some leverage, sequential agreements tend to solidify BRICS as a focal point for informal, club-like cooperation rather than directly expanding broader multilateral protections. Finally, prior literature argued that China and Russia influenced BRICS' soft balancing orientation without empirically explaining how. This soft balancing-focused analysis reveals the mix of balancing and non-balancing initiatives strengthening BRICS as a soft balancing focal point.

Similar patterns may potentially be observed in other informal groups like the Quad and the G7, which could be useful for a comparative study investigating the link between compensatory layering and soft balancing practices. For example, the Quad, an informal institution established in 2007, has evolved into a soft balancing coalition aimed at checking and containing China in Asia. Since 2020 it has broadened its focus to economic development, joint technology efforts, climate change and international health cooperation. Similarly, the G7 transitioned from engaging Russia to adopting a soft balancing orientation, shifting from a management-focused global club to one with a clear soft balancing agenda. Leading states in these groups can also use compensatory layering to strengthen their soft balancing initiatives.

The key question for BRICS is whether compensatory layering can further strengthen its centrality and expand cooperation, positioning it at the core of a future global governance system aligned with Russia's vision of BRICS as the ‘world majority’ platform.⁸⁴ If new members continue to strengthen the group and tensions between BRICS and the West escalate, the larger issue is whether global collective action will remain feasible. Together with UN reforms, the performance of the G20, which convenes the world's largest economies, will be crucial in enabling such action.

Footnotes

Author notes