President Jacob Zuma observes a silent guard of honour on arrival at the Galeao Air Force Base in Brazil. President Zuma is on a working visit to Brazil where he will attend the Final Match of the FIFA Soccer World Cup 2014 in Rio De Janeiro, Brazil and the 6th BRICS Summit to be held in Fortaleza and Brasilia. 12/07/2014, Elmond Jiyane, GCIS Photo Studio

Conveniently scheduled at the end of the World Cup, Brazil hosts the leaders of fellow Brics members Russia, India, China and South Africa in a meeting that presents them with a truly historic opportunity. While in Brazil, the five countries hope to establish a new development bank and reserve currency pool arrangement.

This action could hit a trifecta: recharge global economic governance and the prospects for development as well as put pressure on the World Bank and the International Monetary Fund (IMF) to get back on the right track.

The Bretton Woods institutions, headquartered in Washington, originally put financial stability, employment and development as their core missions, with good reason. That focus, however, was derailed in the last quarter of the 20th century.

During the 1980s and 1990s, the World Bank and the IMF pushed the Washington Consensus, which offered countries financing conditional on a doctrine of deregulation.

With the benefit of hindsight, the era of the Washington Consensus is seen as a painful one. It inflicted significant economic and political costs across the developing the world.

What is more, the operations of the World Bank and the IMF are perceived as rigged against emerging market and developing countries. The unwritten rule that the head of the IMF is always a European and the World Bank chief is to be an American is a superficial but no less grating public expression of that.

Worse is the fact that the voting structure of both institutions is skewed towards industrialised countries, and grants the US veto power.

It was not always that way.

As Eric Helleiner shows in one of his two new books, Forgotten Foundations of Bretton Woods: International Development and the Making of the Postwar Order, China, Brazil, India and other countries wanted development goals to remain a core part of the Bretton Woods institutions. Some of their proposals eventually made it into the policy mix of the World Bank and the IMF, including short-term financing, capital controls and policy space for industrial policy.

When these institutions failed to predict the global financial crisis of 2008, however, the Brics and other emerging market and developing countries said enough was enough. First, they tried to work inside the system by proposing reforms that would grant them more say in voting procedures.

However, the US Congress has failed to approve reforms.

Brics and other emerging market nations also joined the Group of 20 (G20) in hopes that it would be a more pluralistic venue. The G20 held a landmark 2009 meeting where a new vision was articulated for global economic governance, but none of the promises – especially the co-ordination of macroeconomic stimuli to recover from the crisis and comprehensive reform to prevent the next one – was realised.

Now the Brics powers are taking matters into their own hands. Their governments have been diligently putting together two new institutions that hold great promise: a new development bank and a new reserve pooling arrangement.

The development bank would provide financing to Brics and other developing countries for infrastructure, industrialisation and productive development. The reserve pool would allow Brics and other nations to draw on pooled reserves in the event of balance of payments crises or threats to their currencies.

When these institutions are launched in Rio de Janiero, the Brics leaders could and should forge a “Rio Consensus” – provided they do not make the mistakes of other, mostly Western-inspired, “models” in the past.

The key is to make it a model for global economic governance in the 21st century. The vital elements of a Rio Consensus are a definite step in that direction. At its core is a commitment to financial stability and productive development in a manner that is inclusive, honours human rights and is environmentally sustainable.

Organisations carrying out such a mission should also have a more equitable organisational structure with open and transparent rules. This includes the mechanism for picking leaders and a more equal voting system for existing and new members.

Not only will such a framework and structure enable more appropriate finance for development and stability, it can also serve as a moral model of reform that can someday be achieved in the two Washington-based institutions themselves. This will give Brics more leverage, and an opt-out if the industrialised countries stay set in their ways.

* Kevin Gallagher is a professor of international relations at Boston University and a contributing editor to The Globalist, where this article initially appeared. Follow The Globalist on Twitter: @theGlobalist