Who’s in control? Wall Street Consensus, state capitalism, and spatialised industrial policy

Developing Economics

By Seth Schindler, Ilias Alami and Nick Jepson

Recent trends may well have puzzled critical observers of global development policy. On the one hand, we witness the rise of what Daniela Gabor has aptly termed the ‘Wall Street Consensus,’ an emerging paradigm promoting the mobilisation of private finance as a developmental priority. Southern states are encouraged to re-engineer their domestic financial systems around securities and derivatives markets, create ‘investable’ opportunities in sectors such as infrastructure, water, climate adaptation, health and education, as well as deploy policies that specifically ‘de-risk’ investment for global investors. In this formulation Southern states are subordinated to global financial capital and their policy space is significantly constrained.

On the other hand, however, we observe a tendency towards state capitalism, wherein states are increasingly active within markets, as entrepreneurs and owners of capital as well as regulatory agents in the world economy. Across the income spectrum states have embraced the role of agents of transformation and development. In the global South

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