The political economy of microfinance: a Nicaraguan case study

This thesis eschews an econometric approach to the analysis of microfinance initiatives in favour of a wider, political economy approach. It paints a picture of the international financial and socio-economic environment in which microfinance as a practice has developed since the mid-1970s, and the introduction outlines the political agendas that fuel the theoretical debate over development, and the manner in which the self-proclaimedly objective scientific rationale that underlines the dominant neoliberal hegemony is in reality no such thing. The introduction is followed by a methodological explanation of the necessity to examine microfinance in such a context, and then deals with the combination of approaches included in the thesis, sources, and data-collection methods of the fieldwork in Nicaragua. The next three chapters comprise the body of theoretical and literary evidence in support of this methodology, from the international down to the sectoral level within Nicaragua. Having located the Nicaraguan microfinance sector within a theoretical, international and national context, the subsequent chapter moves to examine the local context. The fieldwork in Nicaragua culminates in a combined map- and questionnaire-based exercise set in Masaya, a city some 27 kilometres roughly south of Managua, the capital. The chapter examines the structure and functions of two local microfinance organisations, FAMA and ADIM, and conducts a close examination of the population amongst which these microfinance organisations operate. The survey of the socioeconomy of households within the Masaya area concludes by casting doubts on, traditional methods of microfinance impact assessment, and suggests a different approach to studying microfinance. The thesis concludes by suggesting that the current vogue for envisaging microfinance initiatives as purely financial operations to be analysed as an accounting phenomenon is not only mistaken, but has potentially damaging consequences. The thesis argues that microfinance must be seen within local, national and international political contexts, and that doing so will help avoid costly errors. The thesis also suggests that the demand for new client-orientated initiatives will be assisted by taking the political economic reality into account, and by using methods such as those suggested by this thesis

Key myths about corruption (Briefing Paper)

Corruption has been one of the major international concerns of the past decade. It is an issue that affects all countries, rich and poor, in different ways and to differing degrees. Exactly how corruption affects particular societies has, however, been the subject of some discussion in the literature. The major international institutions promoting governance reforms have, for example, persistently argued that corruption has a direct negative impact upon overall economic growth levels and can depress the climate for attracting international investment; although these are far from universally-held assumptions, even in the mainstream economics literature. Amidst heightened international concern for tackling the abject poverty which continues to affect such large sections of humanity (expressed most clearly in the evolution of the millennium development goals or MDGs), perhaps the most important concern that has been expressed about corruption is that it disproportionately affects the poor and marginalized, through excluding them from access to services or reducing the funds available for direct use in social programmes. Donor-country fears over corruption in the handling of development aid monies may also act to erode the political will necessary to ensure adequate international funding of the actions needed to meet MDG targets, whilst within Southern countries perceptions of widespread corruption within political life can act decisively to depress popular support for state reforms and/or open democratic political systems. Clearly, then, corruption – its extent, nature, dynamics, causation and how it might be tackled – is an issue of fundamental importance to those working in the field of international development. One of the things noticeable on a first exploration of the literature on corruption and development is the singular lack of attention that was devoted to the issue for most of the period since the second world war and, in turn, the sudden rediscovery of the issue towards the end of the 1980s and the explosion of international legislative initiatives, institutional formation and academic work that has occurred since then. Clearly, the end of the bipolar geopolitical world of the cold war and the onslaught of contemporary globalization appear to have presented considerable opportunities for international collaboration in placing the issue at the centre of the international stage. Nevertheless, those very same global processes also present Preliminary version – not for citation without the permission of the authors important challenges to the international community in dealing with the issue because of the difficulties involved in tracing international flows of capital, the increasing complexity of international criminal networks and non-criminal tax evasion networks and the complex and hazy lines between the private and public sectors. Since the early 1990s large amounts of public money have been spent on the development of new legislation at national and international levels, the creation of national anti-corruption programmes and the evolution of anticorruption departments within just about every major international development institution. The impact of such measures, however, has been, at best, partial. As such, whilst the international community should continue to do what it can to raise the international profile of corruption and how it might be better combatted, we argue that it is even more important that a more detailed independent assessment of the effectiveness of existing interventions is carried out. Our position is that the first steps towards such a review of international anticorruption initiatives must involve subjecting the ways in which the issue has been constructed in the mainstream development arenas to closer scrutiny. This workshop is intended to be a first step in this direction. As such, this paper is intended to generate debate about the meaning of corruption, its complexity, how it relates to particular areas of development policy intervention and the means whereby it might be combated (if indeed this is considered feasible or even desirable). Given this, what follows is (i) deliberately provocative, (ii) deliberately broad and (iii) deliberately polemical. We thought long and hard about how best to organize this session and in the end decided to organize it around the presentation of a series of key myths which we have identified as important amongst those involved in anticorruption activities and research. Some of these myths relate to the academic community, some to a kind of general common sense amongst development practitioners and some to those involved in the implementation of anti-corruption initiatives. Here, they are organized into four broad sections dealing with (a) basic definitions, (b) states and markets, (c) actors and anticorruption initiatives and (d) economic factors

Mapping the UK research & innovation landscape: Energy & development

The UK is already a major player in terms of research and innovation into low carbon transitions within the countries of the developing world. However, there are significant opportunities for the UK to enhance its presence within these markets whilst also making a major contribution to meeting international development targets and climate commitments. At the core of the research analysed in the report is that it reflects disparate, research initiatives funded with different research/innovation targets in mind; much latent strength in UK research for low carbon energy for development therefore is implicit in linkage possibilities enhancing systemic effectiveness, particularly by cross-fertilizing innovations taking place in the private sector. Gaps and weaknesses are reflected as much in the lack of collaborative initiatives and ‘siloization’ as in the absence of actual research/funding. The Low Carbon Energy for Development Network (LCEDN) is currently taking the initiative in one aspect of this through the provision of a programme of capacity building and partnership activities to support the development of DfID’s Transforming Energy Access research initiative. What is required of UK energy for development research for the purposes of building a functional system, however, is that the discrete areas of research outlined in this report be re-assembled as coherent, overall research narratives addressing the apparent contradiction of increasing energy access whilst transitioning to the low-carbon economy. Part of this work involves identifying the state and dynamics of UK research capacity in this sector, facilitating greater integration between research funders active in this area, evaluating gaps and key research needs and mapping potential future directions for research interventions and collaborations that build on, and develop, existing UK research capacity. It is expected that this will lead to a range of UK-led energy innovations developed, tested and scaled across developing countries by 2020. The much-needed harmonization of energy access and low carbon transition as a UK research theme however has ultimately to be created out of rethinking research fields from a combination of existing research, plus demand known to be ‘out there’ but which has yet to enter the field of vision of research-funders. This report presents the first part of this work with an overview of current UK research and innovation capacity in a widely defined ‘Energy and International Development’ research area. It identifies key institutions and research centres, thematic areas of excellence, research funding trends over the last decade, emerging research themes plus an overview of grant funding for innovation on the ground. A number of key areas/questions for potential further development of UK research and innovation capacity have been identified and are up for discussion and consultation. The work has been undertaken by LCEDN in partnership with the Knowledge Transfer Network, Energy 4 Impact and IOD PARC