Glossary
Plain-language definitions for terms you'll encounter in geopolitics and international economics.
BRICS
An informal grouping of large non-Western economies — originally Brazil, Russia, India, China, South Africa — expanded in 2024 to include the UAE, Iran, Egypt, and Ethiopia. The grouping coordinates on alternatives to G7-led institutions but lacks treaty structure.
Bilateral Investment Treaty (BIT)
A treaty between two states that protects investments made by nationals of one state in the territory of the other. BITs typically guarantee fair and equitable treatment, protection against unlawful expropriation, and the right to international arbitration of investor-state disputes (through ICSID, UNCITRAL, or ad-hoc tribunals). Approximately 3,000 BITs exist worldwide. The investor-state dispute settlement (ISDS) mechanism is controversial — supporters argue it provides necessary legal certainty for cross-border investment; critics argue it creates a parallel legal regime that favours capital over states' regulatory discretion. Recent treaty reforms (the new generation of EU agreements with the Investment Court System) attempt to address the ISDS critiques.
Bretton Woods 2.0
An informal label for the post-1971 international monetary system, in which the original Bretton Woods regime of fixed exchange rates tied to gold-convertible dollars was replaced by floating exchange rates with the US dollar as de facto reserve currency. Economists Michael Dooley, David Folkerts-Landau, and Peter Garber coined the Bretton Woods 2.0 term in 2003 to describe the post-2000 pattern in which East Asian central banks accumulated dollar reserves to manage their currencies against the dollar, effectively recreating a quasi-fixed exchange regime through reserve management rather than treaty. The Bretton Woods 2.0 framing helped explain how the US could sustain large current account deficits for decades — the deficit was being financed by surplus countries' reserve accumulation. The 2014-2024 erosion of this pattern, as China and other surplus economies diversified reserves, suggests Bretton Woods 2.0 is gradually unwinding without a clear successor regime.
Bretton Woods system
The international monetary order designed at the July 1944 conference in Bretton Woods, New Hampshire, and in force from 1946 until 15 August 1971. Member currencies were pegged to the US dollar within a narrow band; the dollar in turn was convertible into gold at $35 per ounce for foreign central banks. The IMF and the World Bank were created to backstop balance-of-payments deficits and finance post-war reconstruction. Barry Eichengreen, in *Globalizing Capital* (1996, revised editions through 2019), traces how the system worked while US gold reserves and dollar liabilities were in rough balance, and broke when persistent US current-account deficits made the gold convertibility commitment incredible. President Nixon closed the gold window on 15 August 1971, ending fixed parities by 1973. What replaced Bretton Woods was a hybrid: floating exchange rates among the major economies, the dollar still functioning as the dominant reserve and invoicing currency, and the IMF reoriented towards crisis lending rather than parity defence. The currency-regime articles on this site treat that post-1971 order as the live system, with Bretton Woods 2.0 as one informal label for it.