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The Wall Street Consensus

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  • Gabor, Daniela

Abstract

The Wall Street Consensus (WSC) is an elaborate effort to reorganize development interventions around selling development finance to the market. The Billions to Trillions agenda, the World Bank 'Maximizing Finance for Development' or the G20 'Infrastructure as an Asset Class' all call on international development institutions and governments of poor countries to ‘escort capital’ – the trillions of institutional investors – into ‘investable development bonds’, preferably in local currency. For this, the 10 WSC commandments aim to simultaneously reorganize local financial systems around bond market-based finance and forge the de-risking state. The state derisks bond finance for institutional investors by extending guarantees and subsidies to cover (i) demand risks attached to user-fees for (PPP) infrastructure, (ii) political risk attached to policies such as nationalization, higher minimum wages and climate regulation, (iii) climate risks that may become part of regulatory frameworks as material credit risks and (iv) bond market (liquidity) risks that complicate foreign investors’ exit from development assets. The WSC narrows the scope for a green developmental state that could design a just transition to low- carbon economies.

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  • Gabor, Daniela, 2020. "The Wall Street Consensus," SocArXiv wab8m, Center for Open Science.
    • Handle: RePEc:osf:socarx:wab8m
    DOI: 10.31219/osf.io/wab8m
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    2. Bortz, Pablo Gabriel & Toftum, Nicole, 2020. "Climate Change and Green Finance in Emerging Market Economies: The Open Economy Dimension," MPRA Paper 101722, University Library of Munich, Germany.
    3. Max Ajl, 2022. "Everything Stays the Same while Everything Changes," Development and Change, International Institute of Social Studies, vol. 53(6), pages 1398-1420, November.
    4. Bayliss, Kate & Pollen, Gabriel, 2021. "The power paradigm in practice: A critical review of developments in the Zambian electricity sector," World Development, Elsevier, vol. 140(C).
    5. Franziska Müller & Manuel Neumann & Carsten Elsner & Simone Claar, 2021. "Assessing African Energy Transitions: Renewable Energy Policies, Energy Justice, and SDG 7," Politics and Governance, Cogitatio Press, vol. 9(1), pages 119-130.
    6. J Miguel Kanai & Seth Schindler, 2022. "Infrastructure-led development and the peri-urban question: Furthering crossover comparisons," Urban Studies, Urban Studies Journal Limited, vol. 59(8), pages 1597-1617, June.

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