How to Write Better Rules for Global Finance

In 2023, more than 3 billion people live in countries that spend more on paying interest on debt than on education or healthcare. Here is the paradox: the rules of global finance, created to promote stability and development after World War II, were written by a small group of wealthy nations and still operate primarily to their advantage today. The problem is not the lack of rules, but the fact that the existing rules have socialized the risks and privatized the profits, leaving the majority of the planet with almost no say in the decisions that shape its future. The argument here is that the real crossroads is not between nostalgia for the old order and fear of chaos, but between rules made for the few and rules designed for the common good. Today, global finance resembles an orchestra where only the concertmaster decides the music, and the others follow. The IMF and the World Bank include the word “international” in their names, but the levers of power remain concentrated in the countries of the Global North, while those who bear the brunt of their decisions — especially in the Global South — have almost no say. Mariana Mazzucato, an Italian economist and a key figure in this story, is one of the loudest voices calling for a “compass of the common good” to rewrite these rules. A striking fact: according to her calculations, from 1970 to 2023, countries in the Global South paid $2.2 trillion in interest alone to Western creditors. Meanwhile, to access new funding, they are often forced to accept conditions that reduce public spending and stifle development, creating a vicious cycle of dependency. And what about attempts to find a solution? Take the case of blended finance, the strategy launched in the 2010s to “turn billions into trillions” by attracting private investment to poor countries. The actual result: a maximum of $15 billion per year — less than 0.4% of the amount needed for the UN Sustainable Development Goals. And most of this money still came from public, not private, sources. Behind the numbers are real stories: the Bezos Earth Fund, created by the founder of Amazon, invests in climate projects, but it is funded with profits obtained in part through business practices that generate 80.9 million tons of CO₂ per year and are based on tax avoidance and labor exploitation. Another example: the Gates Foundation has donated over $100 billion to global health, but real progress against diseases like malaria depends more on clean water and public services than on individual vaccines — and the foundation's wealth comes from Microsoft, a company accused of restricting access to essential technologies through restrictive patents. Whenever institutions like the IMF and the World Bank propose solutions, they are often just band-aids on a system designed to maintain the status quo. But something is moving: initiatives such as the Bridgetown Initiative, led by Barbados Prime Minister Mia Mottley, are calling for a reform of global finance to give weaker countries access to green funds and to renegotiate debt after natural disasters. Barbados, for example, has included a clause in its bonds that suspends payments for two years in the event of disasters. And then there is the World Bank’s Mission 300, which aims to bring electricity to 300 million Africans by 2030, with joint public and private investments and a focus on social impact. But the real leap forward lies here: creating a true compass for the common good, based on five principles — clear direction, participation by all, learning and knowledge sharing, equitable distribution of benefits, and absolute transparency. It is not enough to talk about “missions”; we must ensure that every rule answers specific questions: Who decides? Who reaps the benefits? Who bears the risks? And to whom is the institution accountable? The counterpoint that is often missing from the debate is this: we are not just talking about numbers or governance, but about stories of denied autonomy and opportunities that can change the history of entire generations. As long as the Global South is forced to negotiate only the cost of capital, it will never be able to set the development agenda. The phrase to keep in mind is: The best rules are not those written for the few, but those that put the common good at the center. If this perspective has made you see global finance from a different angle, you can press I'm In on Lara Notes: it's your way of saying that this idea is now part of how you think. And if you happen to discuss the rules that determine the fate of billions of people over dinner, on Lara Notes, you can tag those who were with you with Shared Offline — so that conversation becomes part of your story. This Note comes from Foreign Policy and has saved you 15 minutes of reading.