For patient capital

Bretton Woods was built to steer cross-border finance toward patient capital and to lend where private capital is not available on reasonable terms. Eighty years on, no ledger says which members have reached reasonable terms — the Bank's rating, the agencies' grades and debt-to-GDP each measure something else.

You weigh capital that is meant to stay: a development bank’s book, a sovereign fund’s allocation, a pension’s thirty-year horizon, a foundation’s program investment. The question is not how fast a member is growing, which is a flow, nor only what it owns and owes, which is a stock. It is whether the place can absorb more capital at a reasonable rate — whether a road, a grid or a school built there will earn what its appraisal says. Debt-to-GDP divides a liability by a year’s output and cannot say. The agencies’ grades and the Bank’s own Country Performance Rating are composites whose weights rest on the authority of those who set them. None reads a balance sheet, because for most members none exists.

FAND builds one for most World Bank members since 1950, on the construction the Bank’s 1995 Monitoring Environmental Progress left on page 65: capitalized Atlas GNI, split among four types of capital — produced assets, natural capital, human resources, and a fourth the national accounts do not carry, social infrastructure, which FAND books as Other Substantive Rights. It is the largest asset of every income group and the one whose shortfall impairs the return on the other three. Below a floor, set in this prototype at 20 percent of a member’s wealth, FAND books the shortfall as a liability, Deferred Maintenance of Trust, and prices it as a premium over a base rate. That Wealth Risk Premium says how far a member is from private capital at reasonable rates — the test Bretton Woods was set up to help members pass.

Priced that way, the drag fell to nothing in high-income members by 1990 and in both middle-income groups by about 2010. It never left the low-income group: near 50 basis points today, after 200 in the 1990s. A small premium has returned to the middle-income groups since 2015. Set beside what others charge the same people, the ladder runs as it should — about 370 basis points over high income at the FDI tier, 230 at the debt tier, single digits at the Bank tier, where FAND’s premium belongs — and the raters part in the middle. Markets price middle-income members that still draw on IDA almost like the low-income group; FAND finds almost none of them on the floor. The market is pricing treasuries under strain; FAND is pricing places where trust has slipped. A member can have either problem without the other, and the sequence matters: where the fourth capital is on the floor, money for roads, forests or schools is booked as deferred maintenance until it is not.

The bottom line is Net Worth: wealth plus what nonresidents owe residents, less what residents owe them. The two differ by under 1 percent of wealth for high-income members and almost 5 percent for low-income ones — arithmetically small, effectively large, since 5 percent of wealth is most of a year’s income owed at the highest premiums on the ladder. Whether a net position is patient capital arriving or overhang is decided by the premium, not the position; the United States owes about the same share and pays nothing on it. Start with the four figures. Then open the US ledger to see the anchor, and read the convergence record the premium is read against. Every figure carries its pedigree, and the balance sheets say on their face that they are rough and systematized: a labeled draft of the right question, not a confident answer to the wrong one.