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Goodbye Washington Confusion, hello Wall Street Consensus: contemporary state capitalism and the spatialisation of industrial strategy

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  • Seth Schindler
  • Ilias Alami
  • Nicholas Jepson

Abstract

Recent scholarship has narrated the financialization of development, which Gabor (2021) refers to as the Wall Street Consensus (WSC), whose purpose is to facilitate the investment of global capital in Southern infrastructure by institutionalising the distribution of risk, reward and responsibility between investors and states. Gabor’s conceptualization of the ‘de-risking state’ subordinated to global finance capital stands in stark contrast with scholarship on state capitalism, which charts the unprecedented entrepreneurial role played by states as investors and market participants. Our objective in this article is to reconcile the apparent paradox presented by the simultaneous emergence of the WSC and evolution of state capitalism. We argue that the WSC affords de-risking states scope to pursue autonomous strategic visions, and many have responded by embracing infrastructure-led development designed to integrate places within global value chains in ways that foster economic diversification, industrial upgrading and balanced regional growth. We present three examples in which de-risking states have implemented spatialised industrial strategies – Saudi Arabia’s Vision 2030, Kenya’s Vision 2030 and Thailand 4.0. In each of these cases spatialised industrial strategies undertaken by de-risking states have fuelled the proliferation of large-scale infrastructure projects and served to justify political centralization.

Suggested Citation

  • Seth Schindler & Ilias Alami & Nicholas Jepson, 2023. "Goodbye Washington Confusion, hello Wall Street Consensus: contemporary state capitalism and the spatialisation of industrial strategy," New Political Economy, Taylor & Francis Journals, vol. 28(2), pages 223-240, March.
    • Handle: RePEc:taf:cnpexx:v:28:y:2023:i:2:p:223-240
    DOI: 10.1080/13563467.2022.2091534
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    Citations

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    Cited by:

    1. Nicholas Jepson & Oyuna Baldakova, 2024. "Chinese State Capital as a Partner for Resource-Based Structural Transformation? The Belt and Road Initiative and Downstream Linkages in Bolivia and Kazakhstan [¿El capital estatal chino como socio," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 36(3), pages 718-745, June.
    2. Gabor, Daniela & Braun, Benjamin, 2023. "Green macrofinancial regimes," SocArXiv 4pkv8, Center for Open Science.
    3. Dimitar Anguelov, 2024. "State‐owned Enterprises and the Politics of Financializing Infrastructure Development in Indonesia: De‐risking at the Limit?," Development and Change, International Institute of Social Studies, vol. 55(3), pages 493-529, May.
    4. Skyrman, Viktor, 2024. "Industrial policy, progressive derisking, and the financing of Europe's green transition," Working Papers 78, Austrian Foundation for Development Research (ÖFSE).

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