“The watchdog is siding with the thieves”: Failing neoliberal policies and successful derisking in the Global South

In this study, we examine how a State in the Global South implemented neoliberal policies aiming at derisking private investments whose outcomes were opposite to expectations. We focus on the strategy, tactics, and maneuvers used by the State to defend these policies formally. Through an in-depth case study of the Pakistani State’s privatization efforts in its electricity sector, we confirm that the State seeks to derisk investments but also to derisk neoliberal policies in general by assuming full responsibility for their failure. This acceptance of responsibility preserves the symbolic capital of the specific policies but also of the neoliberal project in general regardless of outcomes. Our findings add texture to the notion of derisking in the Global South and document the transfer of symbolic capital to multilateral lending organizations from the State. We observe the State is not only an enabler and enforcer of neoliberal policies but also their exonerator when failures appear.