Publications /
Policy Paper

Back
Economic Development of the New South after the Washington Consensus
December 20, 2024

This Paper was originally published on geopolitique.eu

In an era of unprecedented global interconnectedness, developing countries face an increasingly complex and often hostile economic landscape. This landscape is shaped by three main groups of policy constraints. First, the rise among major powers of protectionist tendencies has made the global environment more challenging, particularly as advanced economies increasingly turn to industrial policies to achieve specific economic objectives, and intensifying geopolitical rivalries lead to restructuring of global value chains and regrouping of countries into economic blocs. Second, at a time when demand for government services is at an all-time high, the macroeconomic policy space in developing countries has become significantly constrained, leaving little room for maneuver. A series of crises—from the Global Financial Crisis to COVID-19 to commodity price shocks—has drained government budgetary resources. Third, rapid technological advances are disruptive, rendering traditional policy reforms for growth and structural transformation outdated, and thus necessitating policy experimentation in new, uncharted areas.

These three groups of policy constraints have created a perfect storm of challenges for developing countries. This paper examines the multifaceted impact of these global shifts on the economic policy options available to developing countries. Currently, these countries face the challenge of operating without a clear and coherent framework for their development policies and strategies. This has led to a paradigm shift characterized by a landscape where ‘every country is for itself,’ resulting in the absence of clear policy objectives or instruments to navigate this new reality. Such an approach is unsustainable and poses significant risks to global economic stability and inclusive development. This paper proposes an alternative: a robust, nuanced, and tailored economic policy framework that addresses the unique challenges of developing countries while leveraging their inherent strengths and potential.

RELATED CONTENT

  • Authors
    Luladay Berhanu Mengistie
    Guillaume Gérout Suominen
    September 21, 2026
    The African Union Summit of February 2026 instructed the African Continental Free Trade Area (AfCFTA) Council of Ministers to negotiate a Protocol on Industrial Policy and Development. This work, handled without adequate preparation, is likely to reproduce the weaknesses it is meant to remedy. This paper is a conceptual mapping exercise, written to raise the preparatory questions before drafting begins, rather than to prescribe outcomes.It proceeds in five sections:1. It works towar ...
  • Authors
    Pedro Henrique de Christo
    Travis Knoll
    September 18, 2026
    The Brazilian context involving a clean-electricity base, a more balanced lobbying landscape, and mounting climate and social pressure, makes it more difficult for the kind of abrupt and unrestrained energy policy swing seen in Colombia. The trend in Brazil tends to be more economically viable for renewables. However, these structural conditions by themselves will not guarantee the success of the transition. Fruition will depend on whether policymakers use this window to prepare for ...
  • Authors
    September 17, 2026
    Various competing cross-border payment networks have become vehicles for geopolitical competition. As tensions have risen, many countries want to secure access to cross-border payment systems by joining with like-minded countries to form interoperable networks, either via tokenization or Instant Payment Systems (IPSs). Three major projects are under development, serving the strategic interests of the US, China and the Rest of the World—corresponding to the three trading spheres taki ...
  • Authors
    September 14, 2026
    Le déclenchement de la Guerre en Iran et le blocage du détroit d’Ormuz ont eu des conséquences majeures sur un grand nombre de marchés mondiaux de matières premières. Si l’attention médiatique s’est logiquement portée sur le pétrole et le gaz naturel, ainsi que sur l’aluminium, en raison de la forte dépendance de l’offre de ce métal aux prix de l’énergie, le soufre, comme l’hélium, l’éthylène, le propylène ou l’urée, a également été pris dans les rets de ce conflit. Loin d’être une ...
  • September 11, 2026
    Le marché du travail marocain connaît, depuis les années 2000, une expansion continue de la scolarisation qui ne s'est pas accompagnée d'une transformation équivalente de la structure productive de l'économie, ouvrant la voie à des situations d'inadéquation verticale entre le niveau de formation des actifs occupés et les exigences des emplois qu'ils occupent. La présente étude analyse les déterminants du déclassement (sur-éducation) et du surclassement (sous- éducation) à partir des ...
  • September 11, 2026
    Since the early 2000s, the Moroccan labour market has experienced continuous educational expansion that has not been matched by an equivalent transformation of the economy's productive structure, giving rise to situations of vertical mismatch between employed workers' education levels and the requirements of the jobs they hold. This study analyzes the determinants of overeducation and undereducation using anonymized microdata from the 2014 General Population and Housing Census (RGPH ...
  • Authors
    September 9, 2026
    This paper was originally published as a chapter in the ISPI report The Pursuit of Smart Mobility in Urban Nodes: Trends and Innovation for Citizens and Freight. Agglomeration economies have historically supported industrialisation and global integration by concentrating firms, labour and infrastructure in dynamic urban cores. However, these same forces have also generated persistent patterns of territorial polarisation. Drawing on New Economic Geography, this chapter interpret ...