Who Governs Development?
How successive institutions came to shape the terms on which development is financed
In 2025, debt service payments exceeded public spending on education in 113 countries across the Global South, a group encompassing some 6.1 billion people (UNESCO, 2026). In sub-Saharan Africa, governments now direct on average 3.6 times more of their public resources toward creditors than toward classrooms, a ratio that climbs to 3.8 times in the poorest countries in the region.
The obvious response is to treat this as a debt problem, a ratings problem, or an education financing problem, each with its own fix. None of those fixes explain why the same pattern recurs across a century of African development finance, under institutions that shared almost nothing except one thing: the authority to decide on what terms development would be financed at all, an authority that has rarely, if ever, sat inside the country or even continent being developed.
I
In the colonial period, that authority sat with the coloniser, and it was economic before it was political. Extraction operated directly, through goods and labour, and indirectly, through taxation denominated in a foreign currency and remitted to the metropole (Assa, 2022). Colonies were steered toward cash crops and raw materials, processed abroad and frequently reimported at a markup. Industrial development was foreclosed rather than merely neglected, because an industrialising colony had less need of its coloniser. Colonial banking reinforced the pattern: a handful of foreign institutions, among them the Bank of British West Africa and Barclays DCO, financed extraction rather than domestic production, under a doctrine of colonial self-sufficiency that anticipated, by decades, the fiscal orthodoxy later imposed on independent states (Assa, 2022).
Decolonisation, across the 1960s, transferred sovereignty without transferring the authority that had governed finance under it. The infrastructure that might have eased independent trade had rarely been built for that purpose, and the capital that had underwritten the colonial economy withdrew alongside its administrators (Cash, 2023). The administrator’s authority over the terms of finance did not disappear with the administrator. It simply needed a new occupant.
II
That occupant was, in the first instance, the bilateral donor and the new multilateral lender. Aid financed what was then understood as development through the 1960s and 1970s, extended by former colonial powers and institutions such as the World Bank for reasons that mixed genuine developmental interest with the maintenance of influence (Cash, 2023). Commercial debt followed, as recycled petrodollars sought a return after the oil shocks, and by 1982 the accumulation had produced a developing-world debt crisis. What followed made the transfer of authority explicit rather than incidental. Structural adjustment, designed substantially around the World Bank’s own Berg Report, made continued access to finance conditional on policy commitments authored in Washington rather than in the borrowing capital. The institution providing the money and the institution defining the terms of its provision had become the same institution, openly. Between 1973 and 1986, the Paris Club restructured sub-Saharan African debt fifty-five times across twenty-two countries, and in nearly half of those cases it restructured debt already restructured once (Cash, 2023), a record that reads less as a string of national failures than as an authority repeatedly resetting terms it had itself set too high.
HIPC, from 1996, and the deeper relief that followed under MDRI, cancelled more than a hundred billion dollars in debt and briefly inverted the ratio this essay opened with, lifting several countries’ social spending to several times their debt service (Cash, 2023). It also did something no prior period had allowed: a constituency outside creditor and debtor alike, through the Jubilee 2000 campaign, could contest the terms of relief rather than simply receive them. The campaign changed who could speak, not who ultimately decided. The IMF’s own account of HIPC described the initiative as a clean exit from debt difficulty, a framing that retained, even at the moment of relief, the authority to declare the story finished (Cash, 2023).
III
Within a decade, that authority moved again, from multilateral creditor to private capital market, mediated by sovereign credit ratings. In 2002, then Secretary of State Colin Powell told African officials at a Washington conference that a sovereign credit rating could be their country’s “ticket to the benefits of the global economy” (Reuters, 2024). Washington underwrote Fitch’s entry into the region, the UNDP did the same for S&P, and twenty-two African countries received their first ratings from the Big Three credit rating agencies over the following decade.
The obvious reason for the shift is that concessional finance could never scale to meet development need. True, but it explains the demand for more capital, not why ratings became the mechanism for reaching it. A credit rating solves a problem of trust, not of capital. Institutional investors manage other people’s money under obligations that make a borrower’s word worthless as security, and what they need instead is a standardised third-party signal they can act on without verifying the underlying facts themselves. A rating supplies exactly that: an alphanumeric shorthand built on the reputation of an institution whose only asset is having got the assessment right before (Cash, 2023). The effect relocated authority a second time, from the treasuries of Washington to institutions with no state affiliation at all, and made the relocation look like a retreat rather than a transfer: a number appears more neutral than a policy condition.
That appearance was the appeal, for governments especially. Concessional finance came with visible, negotiated conditionality, a process one financing scholar interviewed by Reuters described as slow and often humiliating for the governments involved (Reuters, 2024). Market finance looked like the alternative: a technical judgement rather than a political one. What it concealed was that the authority to set terms had not weakened so much as become harder to locate, and harder to contest. Credit rating agencies have consistently maintained, with courts largely in agreement, that their ratings are opinions protected by the constitutional right to free speech, a status that has shielded them from most of the liability a judgement with this much consequence would ordinarily carry (Cash, 2023). Their methodologies are self-determined, and the analysts assessing sovereign risk work almost entirely from offices in New York, London, Paris, and Hong Kong rather than the countries under review (Reuters, 2024). A structural adjustment programme could be negotiated line by line and written into a communiqué whereas a rating could not. What had looked like a retreat of external authority was, in institutional terms, its most difficult form to contest.
The costs were uneven. Mozambique’s 2013 bond issue concealed 1.4 billion dollars in undisclosed loans, exposed only in the default that followed in 2016; Ghana’s 2020 Eurobond, raised partly for the long-planned Pwalugu dam, met the COVID-19 downgrade wave before construction finished, and Ghana defaulted in 2022. Different triggers, the same exposure: continued access to finance depended on a process the borrower could not appeal in the moment of shock. Sub-Saharan sovereigns borrowed close to 200 billion dollars this way over two decades; the region’s average debt-to-GDP ratio nearly doubled between 2013 and 2022, and seven have since defaulted on their Eurobonds (Reuters, 2024).
IV
The UNESCO finding this essay opened with belongs to the same sequence. Since 2017, each additional dollar of debt service has been associated with a real-terms decline in education spending of roughly twenty-eight cents (UNESCO, 2026), not because education is inherently residual, but because the institutions authorised to judge debt sustainability were never authorised to weigh education alongside it. A country can be certified sustainable by the very framework presiding over the erosion of the sector most responsible for its future revenue. Social spending floors, meant to prevent exactly this, remain broad and indicative rather than binding, and the costs fall first on the programmes, school meals, scholarships, menstrual hygiene support, that keep the most marginal children enrolled (UNESCO, 2026). A newer instrument, short-maturity domestic debt held by a narrow base of local commercial creditors, is already outpacing external debt as a pressure on education budgets, evidence that this authority is still finding new institutions to inhabit.
Four periods, four institutions in the same position: colonial administrations, then bilateral and multilateral donors, then the IMF and World Bank through conditionality, then capital markets through sovereign evaluation. Each was created to solve a genuine problem, and each did, for a time. None was designed as a successor to the last in any deliberate sense; colonial administrators did not anticipate the Eurobond market, and the officials who sponsored African sovereign ratings in 2002 were not trying to constrain education budgets two decades later. What repeats across all four is not intent but position. In every period, the body recognised as competent to define the conditions of financeability sat outside the state whose development those conditions governed.
Read this way, the ratio this essay opened with stops looking like an anomaly and starts looking like a signature. A country spending more to satisfy its creditors than to educate its children has not departed from how African development has been financed for a century. It is that system, arrived at its present address. The institutions doing the financing will change again, as they always have. What has not yet changed, across four of them, is where the authority to set the terms actually resides.
References
Assa, J. (2022) Decolonization 2.0: Realizing Africa’s Promise through Economic Sovereignty and Strategic Finance. Draft 1.1. New York: UNDP.
Cash, D. (2023) Sovereign Debt Sustainability: Multilateral Debt Treatment and the Credit Rating Impasse. Abingdon: Routledge.
Reuters (2024) How Africa’s ‘ticket’ to prosperity fueled a debt bomb (Aug 1) https://www.reuters.com/investigations/how-africas-ticket-prosperity-fueled-debt-bomb-2024-08-01/.
UNESCO (2026) Breaking the Debt Trap: Policy Paper on Restoring Fiscal Space to Save Education. Paris: UNESCO https://unesdoc.unesco.org/ark:/48223/pf0000398572