Any alternative to the Wall Street Consensus? Comparing the infrastructure financing models of the US, the EU, and China

Abstract

Global South countries (excluding China) need USD 40 trillion in infrastructure finance by 2035. Most of this must be sourced externally. The US’s Partnership on Global Infrastructure and Investment, the EU’s Global Gateway, and China’s Belt and Road Initiative all aim to provide parts of this capital. Conceptualising the state-capital relation of the US’s approach, the ‘Wall Street Consensus’ appoints host countries to catalyse private capital by de-risking infrastructure projects. Here, I conduct a comparative study of the state-capital relationships within the financing models of the three initiatives, drawing from 123 interviews conducted across the global North and South, official documents, and existing literature on infrastructure finance. I find that while the three models assign different roles to host countries, they all entail a heavy financial risk burden. Highlighting differences between initiatives, I conceptualise the US‘s model as ‘host country de-risking’, the EU’s as ‘ODA bargained de-risking’, and China’s as ‘state-organised risk-sharing’. Positioned between these models, I find that global South countries face a dilemma between the need for a ‘green state’ approach to drive infrastructure development and pressure for a limited risk-carrying state role imposed by the three models.