What is fraying today, amid resurgent nationalism and geopolitical tensions of a kind not seen since World War II, is not the rule of law in the global economy; it is the legitimacy of rules that socialized risks while privatizing rewards and that gave a majority of the world’s countries—and people—little voice in the decisions that shaped their futures. The task ahead is therefore not to restore the old order, or to resign ourselves to a lawless vacuum, but to write new rules around a different organizing principle: the common good.

Currently, economic policy is trapped in a harmful cycle. The global system treats markets as natural and efficient, while it casts governments as fixers of “market failures,” intervening only when things go wrong—a public good here, a subsidy there, a bailout when crisis hits. But a framework built on failures is, by definition, negative and reactive. So long as “public goods” are understood merely as what the private sector fails to provide, we do not have a theory of the public good; we have a theory of what the private sector is missing. The same logic plays out internationally: As long as the global system treats challenges such as pandemic preparedness, water security, and a stable climate as gaps that it must fill through aid, charity, and after-the-fact corrections, we will keep picking up the pieces of crises we could have prevented. The common good is not what is left over once failures are corrected. It is an objective we must choose and reach together.

Reaching it requires paying attention to how economic actors, including governments, businesses, workers, and communities, relate to one another. Just as an orchestra is judged not only on what it plays but on how its musicians play together, economies must be evaluated not only on what they produce but on how participants collaborate with and value one another. Markets are always shaped—by rules, incentives, and institutions. The question is not whether to shape them but whether we direct them toward collective flourishing or let them drift wherever the loudest soloist, or the strongest actor, dictates.

To hold that direction—and to ensure that the “common good” does not become another meaningless slogan—the international community needs a framework to guide its reforms and decision-making. A common-good compass should consist of five elements: purpose and directionality, co-creation and participation, collective learning and knowledge sharing, access for all and reward sharing, and transparency and accountability. It is the interaction of all five that matters. Neglect any one, and the framework will be captured by special interests.

Nowhere is this compass more urgently needed than in the institutions that govern global finance. The IMF and World Bank carry the words “international” and “world” in their names, but their decision-making power remains concentrated in a handful of countries in the global north, while the global south, which is home to a majority of the world’s population and the principal recipient of their programs, has minimal say. In order to construct an international order worthy of the name, the world must begin by redesigning these institutions.

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It is important to recognize that there has been a shift in recent years by new IMF and World Bank leadership toward greater decentralization within these institutions, with efforts to strengthen country-level leadership, operational capacity, and responsiveness to local contexts. While still limited in scope, these steps reflect growing recognition that legitimacy and effectiveness depend increasingly on proximity to the realities and priorities of borrowing countries rather than on decisions concentrated in Washington or other headquarters.

Nonetheless, inequitable governance structures continue to prevent deep and transformative reforms from taking place. In both the IMF and World Bank, voting power is based on financial contributions, not democratic representation. This gives disproportionate influence to wealthy nations, especially the United States, which maintains de facto veto power in the IMF. Meanwhile, most countries in the global south frequently pay higher borrowing costs and must comply with conditions that can undermine domestic policy and development goals.

The consequences have been severe. Between 1970 and 2023, global south countries paid a staggering $2.2 trillion in interest to Western creditors. Heavy debt burdens have drained resources from essential public services, while austerity-driven structural adjustment programs have curtailed government spending, restricted taxation of transnational corporations, and hindered domestic industrial development. As a result, the global south has become increasingly dependent on foreign borrowing. Today, more than 3 billion people—including roughly 57 percent of Africa’s total population—live in countries that spend more on debt servicing than on education or healthcare.

Many problems in the global south are rooted in the historical development of the global north, which must take responsibility for providing solutions. This includes financing climate mitigation and development through grants and official development assistance, rather than relying primarily on loans. Philanthropy, while often well intentioned, is also not sufficient, as it obscures the deeper structural issues it claims to address. For instance, the Bezos Earth Fund, established by Amazon founder Jeff Bezos, has made important investments in climate adaptation. Yet it is funded by wealth generated through deeply problematic business practices. Amazon has relied on tax avoidance and labor exploitation to accumulate massive profits while also producing 80.9 million metric tons of carbon dioxide equivalent in 2025, comparable to a midsize European country. Its carbon footprint is expected to grow further due to its data center expansion. While the Bezos Earth Fund provides some support for addressing climate change, it cannot offset the harm caused by Amazon’s core business practices.

Similarly, the Gates Foundation has played a significant role in global health, contributing more than $100 billion since 1994 and supporting lifesaving vaccines for diseases such as malaria. Yet while vaccines can reduce child deaths, a broader public health approach that ensures universal access to clean water and sanitation would address the root causes of these diseases. It is true that governments are responsible for building these systems, but corporate tax avoidance and the use of restrictive intellectual property rights by companies including Microsoft—the source of the Gates Foundation’s wealth—have exacerbated gaps in public health infrastructure.

Real development requires investment in local and national capacity, including building a capable civil service and diversifying economies beyond natural resources into sectors such as digital services and manufacturing. In other words, development demands that actors in the global north, including philanthropic ones, engage in well-designed partnerships that reflect the principles of the common good and support a degree of autonomy, enabling global south countries to lead their own development agendas.

Unfortunately, many of the solutions that international institutions have proposed to address development challenges in the global south have been ineffective efforts to patch over problems rooted in a deeply inequitable financial system, without reforming the system itself. One such approach is “blended finance,” the strategic use of public funding to attract private investment. This gained recognition in the 2010s as a tool to mobilize additional resources to address the lack of progress on the Sustainable Development Goals, or SDGs, which all United Nations members adopted in 2015 as a global framework for assessing national well-being. The logic was that public resources could “crowd in” private capital, turning “billions into trillions.” Yet the lack of progress over the past decade suggests that the problem lies not only in the scale of finance but in the system’s design and incentives.

At its peak, blended finance mobilized only around $15 billion per year—less than 0.4 percent of SDG financing needs. Moreover, the majority of these funds originated from public or concessional sources rather than new private investment, while the projects that did attract private participation were often in already profitable sectors or middle-income countries. These outcomes highlight the need for a deeper structural transformation in development finance.

The World Bank and other development banks have recently begun to move away from the “billions to trillions” narrative toward a catalytic approach, using innovative financial instruments and updated policies to mobilize investment and expand their lending capacity without compromising financial integrity. For instance, the World Bank is experimenting with risk-sharing tools, such as the International Finance Corp.’s first collateralized loan obligation. It has also introduced new mechanisms, such as hybrid capital and the Livable Planet Fund, to support climate resilience, food security, and pandemic preparedness. These efforts reflect a move toward “more, but better, debt,” accompanied by transparent reporting and mutually agreed conditions that protect fiscal sustainability.

While this progress is encouraging, the challenge ahead is to ensure that these reforms contribute to a deeper transformation of the international financial architecture. This is a matter not only of finance but also of governance and power. Genuine reform requires a shift to a system that grants all countries true ownership of global priorities.

The common-good compass offers a practical guide for reforming the international financial system in ways that truly serve people and communities. Consider again the five elements of the compass. First, direction matters because investments and finance must create real, measurable impact, rather than simply circulating through global markets or de-risking private activity. All stakeholders, including countries in the global south, must shape that direction. Institutions thus need new governance structures that bring all countries to the table, instead of perpetuating a system where the richest nations make decisions that often come at the expense of poorer ones.

Tackling global challenges such as pandemics and climate change also demands structured collaboration and knowledge sharing—for example, through patent pools, which are agreements between organizations or states to license patents collectively. Such mechanisms have proved especially valuable during health crises and could help develop solutions to pressing issues such as clean energy and technology access.

Equally important is the fair distribution of the rewards from collective investments. The benefits derived from the extraction of natural resources in the global south should first and foremost support development in that region, rather than enriching external actors. Ensuring that these rewards are shared equitably would help strengthen domestic finances and reduce dependency on external loans, which often come with restrictive or harmful conditions. A global financial transaction tax could play a central role in this effort, generating funds from cross-border financial trades and flows that could be reinvested in social infrastructure, global public goods such as health and water, and sustainable development initiatives.

Finally, there must be protections in place to make all actors, public and private, answerable for outcomes and prevent further debt burdens from undermining countries’ development. Transparency is also essential to reveal hidden liabilities and fiscal risks that could destabilize economies. Together, these principles provide a road map for reform that is not only fair and effective but capable of fostering shared prosperity, resilience, and a more equitable global order.

These ideas are not utopian. Several movements are already advancing them. The Bridgetown Initiative, launched by Barbadian Prime Minister Mia Mottley in 2022, aims to redesign the international financial architecture to provide low- and middle-income countries with debt relief and affordable access to green finance. Its key policy proposals include expanding liquidity through the IMF by suspending surcharges and improving access to rapid-financing facilities, as well as redirecting at least $100 billion worth of unused Special Drawing Rights—international reserve assets created by the IMF to supplement countries’ official reserves—to low-income and climate-vulnerable nations.

The initiative also calls for sovereign debt restructuring through the inclusion of natural disaster and pandemic clauses, scaling up concessional lending from multilateral development banks, and reforming global financial governance to amplify the voices of developing countries. For example, Barbados has already introduced a natural disaster clause in its sovereign bonds that pauses debt repayments for up to two years following a major disaster. It has also influenced major international discussions, leading to the establishment of the loss and damage fund at the 2022 U.N. Climate Change Conference and the 2023 Summit for a New Global Financing Pact in Paris, which produced the Pact for Prosperity, People, and the Planet.

Similarly, efforts such as the Jubilee Commission, a Vatican-backed expert panel I belong to that aims to address the global sovereign debt and development crises, point to the growing recognition that the international financial system must evolve.

Yet for these initiatives to succeed, they must form part of a more coherent and transformative strategy—one that gives global south countries genuine agency over their own development paths. High levels of public debt, for which the global financial system bears substantial responsibility, currently constrain this possibility. They confine the global south to narrow negotiations over the cost of capital or mechanisms such as loss and damage funds, instead of enabling them to participate in shaping a fairer and more sustainable international order.

There are already signs that the global financial system as a whole is starting to reorient itself. The BRICS bloc—originally composed of Brazil, Russia, India, China, and South Africa and now including Egypt, Ethiopia, Indonesia, Iran, and the United Arab Emirates—is set to play an increasingly influential role. Over the past two decades, BRICS has grown to represent more than a third of the global economy and half of the world’s population, and it aims to provide a counterbalance to Western dominance in international institutions.

This shift is also evident in the growing emphasis on mission-oriented finance, although the term “missions” is often used without the institutional transformation needed to make them truly outcome driven. The World Bank’s Mission 300, which aims to provide electricity to 300 million people in Africa by 2030, combines public and private investment to expand power generation and transmission, scale up decentralized renewable solutions such as minigrids, and improve affordability and regional integration. It also emphasizes community empowerment, particularly for women, by enabling access to clean energy that fosters local enterprise.

In many ways, Mission 300 aligns with several principles of the common-good compass. It promotes co-creation through collaboration with governments and local partners, supports collective learning via open data and shared platforms, and seeks fairer reward sharing by linking investment to social outcomes rather than short-term returns. It also emphasizes accountability and transparency through public reporting and feedback mechanisms, indicating a move toward more participatory governance. At the same time, the initiative highlights the need for a more rigorous and explicit framework grounded in the common good to ensure these elements are applied consistently and not left to chance.

As organizations increasingly adopt “mission” or outcome-driven language, the real challenge lies in ensuring that they design and implement these missions effectively, with careful attention to the common good. The success of Mission 300 and similar initiatives will depend on practical details such as governance structures, accountability mechanisms, and sustained financing—factors that determine whether missions can deliver tangible and lasting change.

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This is also not a task for some distant constitutional moment. Every capital increase and replenishment round, every review of the capital adequacy framework, every debt restructuring, every new fund, from loss and damage to Mission 300, is an opportunity to embed the compass in institutional design. The questions that negotiators, ministers, and multilateral leaders should carry into every room are concrete: Does this instrument serve a clearly articulated mission, or does it merely move money? Who sat at the table when it was designed? Will the knowledge it generates be shared or enclosed? Who bears the risks, and who captures the rewards? And to whom, exactly, is this institution accountable?

Bridgetown, the Jubilee Commission, natural disaster clauses in sovereign bonds—the seeds of a common-good architecture already exist. What they lack is not ambition but a coherent framework that connects them and holds every actor, from the IMF to the largest asset managers, answerable to outcomes.

Surviving in a world without rules, in other words, does not depend on nostalgia, and it certainly does not depend on nationalism. It depends on our willingness to write the rules again—this time together and with the common good at the center. This is not utopian. Countries commit to goals of this kind every year in international forums. What has been missing is a systemic framework that holds them to account. The compass provides one. Now, we just need to use it.