The crisis of neoliberalism is making way for a return of the state in the Global North, which now has turned to green industrial policies on the back of rising geopolitical tensions, and for the return of developmentalism in the Global South – a political and institutional commitment to active state intervention geared towards (green) structural upgrading, as expressed in the Bridgetown Agenda.

Thus, beyond the ongoing external debt vulnerabilities affecting a majority of countries on the African continent, there is an opportunity to revive early post-independence developmentalist ambitions, while carefully integrating questions of social justice. However, success in updating such ambitions requires the emerging developmentalist communities to first diagnose the specific global economic and financial environment that shapes any collective efforts, and then map out the range of developmentalist models within or outside those constraints.

The resurgence of developmentalism takes place against an increasingly powerful development paradigm centered on derisking private investment in a range of public policy priorities. This paradigm – the Wall Street Consensus – informs a broad range of initiatives aimed at the African continent.

The Wall Street Consensus redefines developmentalism as a question of ‘investibility’: it starts from the assumption that the state does not have the fiscal/institutional capacity for direct public investment and ownership, and instead re-allocates public resources towards creating ‘investible’ projects in infrastructure, green hydrogen or renewable energy plants, or green industries.

Investibility requires derisking: public subsidies, guarantees and regulations are used to shift some risks to the public sector in order to mobilise/leverage private capital. Derisking is rarely a localised set of practices in the Global South, but is rather organised through what can be conceived as global derisking chains that involve Global North donors and initiatives, multilateral development institutions, foreign financial and corporate investors, philanthropic organisations and national governments.

Research has identified three sets of concerns around derisking developmentalism:

• Distributional: The question of investibility is inherently (gendered) distributional. The derisking state acts as an inequality machine by weakening the direct state provision of public goods and commodifying these under the pressures of investibility.
• Macrofinancial: It threatens to reinforce systematic debt vulnerabilities and can generate regressive fiscal burdens that may compromise external solvency and lead to painful economic adjustments.
• Structural: It offers a plausible narrative of transformation for a green and just low-carbon transition without altering the macrofinancial status quo, ultimately putting private capital in the driving seat instead of being disciplined by the state.

Yet such concerns are largely absent from global debates around climate, the current Global South’s debt crisis or even the Bridgetown Agenda. In part, this is a data/knowledge problem, as there is little systematic information on the extent to which countries rely on derisking to pursue public policies.

The REDCAJU project fills these data and conceptual gaps, as critical steps towards articulating alternatives. Though this project has an empirical focus on the African continent, its scope is global, as derisking developmentalism has a global footprint.