United Nations summits typically unfold with a feverish intensity. Official delegates battle over every verb, dollar figure, and timeline in the outcome document. But there was little drama of multilateralism at the Fourth International Conference on Financing for Development (FFD4) this July in Seville, Spain. After the United States withdrew in June, delegates agreed on the final draft—the Seville Commitment—two weeks ahead of the actual meeting.
Still, the world gathered in Seville, in sweltering temperatures topping 100 degrees Fahrenheit, a not-too-subtle omen of the climate hell we were there to ostensibly avert. Around 6,000 corporate lobbyists (nearly half the attendees) swarmed plenary halls, peddling private capital for “investible development” while delegates from the global south pleaded for debt relief and climate finance.
A decade after its launch at the FFD conference in Addis Ababa, Ethiopia, the investible development paradigm remains the unshakable consensus. In Addis Ababa, the World Bank gave it a catchy slogan: “Billions to Trillions.” Billions in public money, be it development finance or local fiscal resources, could activate the power of private cash. Institutional investors alone had the trillions to finance transformative projects and should be enticed into investible development partnerships with the state.
I termed this paradigm the Wall Street Consensus, to capture the turn to development as an asset class while tracing the continuities from the Washington Consensus, the neoliberal paradigm that reigned during the golden age of U.S. hegemony in international development. The new consensus adopted financiers’ view of development: privately owned, for-profit projects with returns improved—in financiers’ jargon, “de-risked”—by public subsidies and favorable regulations. A new hospital or housing complex becomes investible once financiers such as BlackRock or Blackstone get concessional loans from the World Bank and local fiscal resources to guarantee a certain risk-adjusted return. The same investment demands apply to renewables, education, water, highways, or carbon and biodiversity credits.
In Seville, the rhetoric shifted away from “trillions.” Even the World Bank dropped it, humbled by evidence from the Organization for Economic Cooperation and Development that every dollar of multilateral investment mobilized only about 30 cents of private investment. But the investible paradigm had bigger problems than the missing trillions. Financiers, touted as the new development partners, were in fact draining the global south rather than investing there. External debt distress loomed large, with debt-servicing costs for developing countries reaching an all-time high of $1.4 trillion in 2023. Countries that were promised trillions in private investment were instead paying trillions in debt service to private creditors, often redirected from public spending on health and education.
Grappling with these realities, the Seville Commitment acknowledges the tension between investor returns and development outcomes. It notes that de-risking often skews benefits toward private investors, that governments and multilateral development banks have allowed investors to cherry-pick revenue-generating assets in middle-income countries (74 percent of blended finance still flows there), and that de-risking commitments have generated significant fiscal burdens and debt sustainability problems. These were significant concessions to the critics of investible development. “Private investors,” we heard in Seville, “should pay attention to development outcomes.”
How naive to appeal to investors’ morality when the first decade of investible development is littered with examples of aggressive profit maximization, from Meridiam’s public-private partnership hospitals in Turkey to TPG’s hospitals in Kenya. Extractivism is the feature, not the bug, of investible development.
This was why the U.N. FFD4 expert commission I was a member of, set up by the Spanish government, proposed building state capacity to govern investible development. We suggested new institutions and metrics to measure, monitor, and, through conditionality, align “investible” projects with development outcomes; criteria for fiscally responsible de-risking, including ceilings on contingent liabilities; and de-risking debt rules to limit long-run fiscal costs.
We also advised developmental carve-outs that would ring-fence social infrastructure—such as health and education—from de-risked private ownership. A quick look at the U.S. “investible health” model is enough to understand what happens when the state surrenders welfare to private equity. Instead, some public goods should be delivered by the state. But the Seville Commitment ignores our proposals for ring-fencing and gestures vaguely toward “clear monitoring and accountability mechanisms” in de-risked projects without conditionalities for financiers.
In Seville, it became clear why the commitment was tough on diagnostics but weak on remedies. While debt campaigners debated principles, the de-riskers—lobbyists, finance ministries, multilateral banks, consultants, and financiers— were laser-focused on one goal: how to turbocharge private capital into development assets. The financiers attending the International Business Forum, held alongside FFD4, had no interest in development outcomes.
Their explanation for the “trillions failure” was that they had not received sufficient incentives. Their compradores in academia in one Seville panel joked about “de-risking our minds.” Perhaps an accurate quip for minds that speak the truth that power wants to hear, liberated from the risks of critical thinking.
But Seville raised bigger questions. Why has multilateralism converged again on a development paradigm that surrenders the state’s social contract to financiers while simultaneously weakening state capacity to pursue transformative change? And does the renewed Big Finance push for investible development really matter that much in a world of great-power competition, where another faction of capital, Big Tech, has occupied the White House and is driving the world faster toward climate disaster with its insatiable demand for energy and water? Is this the last, pathetically ineffective gasp of a moribund U.S. hegemony while China looms on the horizon?
First, investible development will remain the answer as long as the West pursues transformative economic visions while staying wedded to the macrofinancial politics of neoliberalism: the “monetary dominance” regime of independent central banks that Milton Friedman designed to constrain public financing after the Keynesian decades in which central banks were subordinated to their governments, as well as the surrender of the welfare state, particularly pensions, to institutional capital. Distracted by U.S. President Donald Trump’s chaotic trade policies, it’s easy forget that ours is now a world of competing transformative state projects.
It is not a coincidence that 2015 marked the turn toward transformative development; this was the same year that China announced its Made in China 2025 industrial policy agenda, aiming to make it the global leader in cleantech manufacturing. The competition accelerated with the Biden administration’s resuscitation of industrial policy in the hope of countering the hegemonic threat posed by China’s extraordinarily successful state-led transformation.
Like Bidenomics, investible development promises transformation through an “incremental upgrade” of the neoliberal state. It adds a thin layer of de-risking institutions (public-private partnership offices, development banks that take currency risk from investors, or country platforms such as the Just Energy Transition Partnerships). The de-risking state can decarbonize, develop, or industrialize cleanly without coercing capital and without radical institutional change. It can transform economies without transforming the state that neoliberalism created, a state where central banks control public money creation, leaving public financing a binary choice between higher taxes that threaten a capital strike and higher debt that exposes governments to the mercy of bond vigilantes.
When I pointed out in a Seville panel that, historically, successful transformative projects were financed through financial repression, capital controls, credit policy, and money printed by central banks (that is, monetary financing), I was met with polite smiles. The contemporary example, China, was dismissed as an exception for its vast scale.
Instead, we learned from a high-ranking U.N. official that central banks lobbied hard to be kept out of the Seville process. They were successful. The conference document examines the foreign and domestic, public and private resources that could finance development but does not consider even once the central bank, the key public institution that creates public money and governs the creation of private money. This invisibility is a political choice: It preserves the neoliberal design of central banks as enforcers of macroeconomic orthodoxy and guardians of a distributional status quo that benefits capital. Its consequences are not trivial.
For one, it weakens the state’s transformative capacity. It leaves countries vulnerable to the whims, and lobbying power, of foreign investors, which in turn constrains transformative public spending. To its credit, the Seville Commitment acknowledges the decades of illicit financial flows and tax injustice that benefited financiers, corporations, and the wealthy. But the final document dilutes initial commitments to a U.N. multilateral process on debt that would wrest deliberative control away from the closed-door clubs where financiers’ lobbying might prevails.
Civil society activists offered concrete steps for an effective U.N. debt process: a multilateral sovereign debt resolution mechanism, binding responsible lending and borrowing principles, an automatic mechanism for debt relief in the wake of catastrophic external shocks, a global debt registry, and, critically, domestic legislation in creditor countries to mandate private creditor involvement in debt relief.
Some of these points made it into one paragraph of the document—but only in a weaker form because Canada, the European Union, Japan, South Korea, and the United Kingdom objected heavily. These handmaidens to Big Finance first tried to remove the paragraph altogether and then eventually accepted a diluted wording while also dissociating from that paragraph. (“Dissociation” allows countries to sign the FFD4 document without considering themselves bound by a particular paragraph. Only the U.K. in that list did not dissociate.) Notably, China did not dissociate, despite being regularly portrayed as the villain in debt renegotiation.
Finally, the hype around Big Tech and artificial intelligence has reinstated the veil that neoliberalism so successfully draped around Big Finance until the 2008 crisis. The Trump administration’s gift to private equity—allowing it access to the $9 trillion U.S. retirement plan market—barely raised an eyebrow. But try this thought experiment. What if, instead of giving the BlackRocks of this world more and more public subsidies to take over our public infrastructure, we reclaimed the trillions in workers’ capital they manage? One bold move to generate trillions in public financing for development would be to nationalize pension funds. This alone would shrink private equity, along with the power of the asset managers that overshadowed Seville, by at least a third. If that sounds impossible, a 2018 International Labour Organization report titled “Reversing Pension Privatizations” shows that it is not.
The scarcity of public finance is a political fiction, maintained because it serves capital’s veto power. The money exists. The institutions can be rebuilt. Only the will to reclaim them has been de-risked into oblivion.