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The World Bank’s previously public data on microfinance and financial inclusion has recently been locked away behind a paywall. It’s hard to figure out why. However, it raises larger questions about the Bank’s strategies for microfinance and knowledge more broadly.

(This is a background piece to an article published on the IDS blog.)

Since the 1990s, the World Bank has sought to present itself as not only as a lender, but also a global “Knowledge Bank” that collects and provides knowledge as a global public good. It has garnered some praise, and perhaps more criticism, for ostensibly seeking to monopolise knowledge about development. In 2012, the Independent Evaluation Group concluded the objective of creating a global Knowledge Bank had not been achieved, criticising a lack of uptake of knowledge within the Bank and “intellectual silos”.

So how about intellectual vaults, with knowledge securely locked away? Turning public monopolies into private (or pseudo-private) monopolies; now that doesn’t sound like something the World Bank would be in favour of, does it? It’s precisely what happened with the World Bank’s microfinance data platform earlier this month.

The MIX (also known as “Microfinance Information Exchange”, or “Mixmarket.org”) was created by the World Bank’s in-house-but-arms-length microfinance governing body, CGAP, to improve the transparency of the microfinance industry. Since 2002, the MIX (whose connections to the World Bank are not made very clear, but its headquarters are across the street) has collected data about the global microfinance sector, packaged primarily to cater to investment decision-makers.

The MIX’s “.org” suffix denotes its claim to serve the greater good. The data were made available on-line.  Anyone with an interest in microfinance could access it: “a big win for open data in international development”.

Get the “public” data – for upwards of $486

Those days, it seems, are over. All the data which were previously available for downloading and (usually after some cleaning) analysing in a spreadsheet are now behind a paywall. What used to be a “global public good” is now priced at at least $486 a year – clearly too much for most students or researchers, let alone those from developing countries.

paywall

(Image: screenshot from themix.org)

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Excerpt from “The Political Economy of Microfinance: Financializing Poverty”, Chapter 2, A Genealogy of Microfinance.

Two basic types of story are commonly told about the origins of modern microfinance. One is the underhistoricized version, whereby Dr Muhammad Yunus (and/or a handful of other pioneers) “invented” or “discovered” it: “The modern microfinance movement began in Bangladesh in 1977, as an experiment by economics professor Muhammad Yunus … Over the next three decades, the model he established became widely accepted and replicated in other countries as a way to fight poverty. Microfinance spread around the world and earned Yunus a Nobel Prize in 2006” (Wharton Business School 2011). In this and similar tales, before the 1970s, microfinance has no meaningful history.

The overhistoricized version meanwhile draws parallels and connections with various prior credit systems and financial interventions, portraying microfinance as part of a long lineage of poverty-alleviation programmes through credit. For instance, “modern microfinance did not arise de novo thirty-five years ago. The ideas within it are ancient, and their modern embodiments descend directly from older successes” (Roodman 2012a: 38). Here, today’s microfinance sector is all history, and merely the temporary pinnacle of a long, quasinatural evolution.

Both stories are unsatisfactory, not least because they downplay (or ignore) the political-economic context of microfinance; they overlook the “visible hand” of the state in its emergence; they fail to show how microfinance arose out of particular historical circumstances (neither as sudden discovery nor as revival of ancient ideas); above all they are blind to the insecurities, uncertainties and contingencies which shaped today’s microfinance sector. Microfinance was neither a sudden and miraculous discovery nor a historical necessity.

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Excerpt from “The Political Economy of Microfinance: Financializing Poverty”, Introduction, A Framework for Engaging Microfinance.

Concepts and Euphemisms

There is often confusion about some terms that are commonly used in discussions about microfinance. Before the substantial chapters begin, an explanation of terminological choices which affect the analysis [in this book] is essential.

Microfinance vs. microcredit – There is no consensus definition of microfinance. We may stick to a condensed version of CGAP’s definition [1], following which microfinance is “financial services for poor and low-income people, offered by different types of service providers, most of which designate themselves as microfinance institutions”.

Yet some readers might be irritated by the usage of the term “microfinance” in a book which pays relatively little attention to services such as microsavings or microinsurance. Though I differentiate clearly between microfinance and microcredit in a historical frame – where “microcredit” was the dominant term during an earlier period, while thereafter “microfinance” fell into favour – the term “microfinance” is used otherwise throughout this book to refer to the entire system, even where my analysis focuses on the credit dimension.

Why? First, even though “microfinance” is a relatively recent term – Seibel (2005) claims to have coined it in 1990 – hardly anyone now speaks of “microcredit”, let alone “microenterprise finance”, which was used mainly in the 1990s. The fact that “microfinance” is the dominant term may already be reason enough to use it. But, second, (a) microinsurance and (b) microsavings are more hype than reality. They are practically nowhere standalone businesses, while microcredit often is. Credit was, and remains, the essential element of microfinance, as the most profitable and prominent element.

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Unter dem Titel “Entgrenzte politische Teilhabe? Beiträge zu einer politischen Soziologie transnationaler Mobilisierungs- bzw. Partizipationsprozesse” plant der DVPW-Arbeitskreis “Soziologie der internationalen Beziehungen (SiB)” seine nächste Arbeitstagung in Kooperation mit dem Verein für Protest- und Bewegungsforschung und dem Bereich soziale Bewegungen, Technik, Konflikte des Zentrums Technik und Gesellschaft der TU Berlin. Die Arbeitstagung findet am 12. Juni 2015 in der TU Berlin statt. Für die Beteiligung an der Tagung ruft das Organisationsteam jetzt zur Einreichung von Beiträgen auf. Read the rest of this entry »

Thirteen years ago the largest-ever gathering of world leaders took place on 8 September 2000 at the United Nations (UN) General Assembly in New York, where the UN Millennium Declaration was made. The Declaration was the most supported, ambitious and specific list of global development goals agreed upon to date, and established a list of commitments to reduce extreme poverty by 2015 which became known as the Millennium Development Goals (MDGs).

The Millennium Development Goals set in 2000

Source: United Nations

The MDGs were significant for global development cooperation due to their ability to stimulate global support, specifically financial resources. Many aid agencies and donors used them to direct their funding projects, and several governments also largely founded their health strategies upon them to receive external funding, which could comprise over 50 per cent of the state’s health budget. The MDGs thereby created a specific global development agenda, which some critics however now argue was not entirely in tune with the real needs of development of low- and middle-income countries. For example, proponents of a greater focus on non-communicable diseases (NCD) criticise that despite NCDs are now the leading cause of death worldwide, they did not receive a single mention in the 2000 MDGs.

You use it whenever you need it. You want it to be clean. You sit down, you stand, or you squat. You use paper, or maybe water. You flush… and whatever your business there may have been, it disappears. You leave, you wash your hands. So simple… you take it for granted.

If you’re lucky.

Any traveler to another continent soon learns that the toilet is a highly cultural thing. Sanitation is a cultural practice. Sometimes even a trip from one country to another is enough to cause mild shock and awe – for instance, how every German holiday-maker in France feels when they (re-)discover the French squat toilet. Or how a French traveler feels when discovering the German “Flachspüler“. Or the Irish, when voting on the Lisbon Treaty. Toilets are deeply culturally embedded, so much that Slavoj Žižek has a special theory about their differences and their effects on national mindsets, politics, and philosophical traditions.

Westerners have a lot to learn

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Joseph Hanlon, Armando Barrientos, David Hulme, 2010: Just Give Money to the Poor: The Development Revolution from the Global South. Sterling: Kumarian Press.

If it sounds novel to suggest that if you want the poor to have more money, you could just give them money, these are strange times. What could be more straightforward than giving money to people in need? But cost recovery, self-help, and “financial deepening” are essential tenets of the current development ethos, so someone must go out and make the argument – as Joseph Hanlon, Armando Barrientos and David Hulme do in Just Give Money to the Poor – that simply handing out cash may be easier, and better, than anything else.

Cash transfers are a rising idea in development policy. Even The Economist likes them. Still, they are far from a hype, and little is known to most people about the successful programmes implemented by Brazil, Mexico or Indonesia, for example. This book aims to change that. Perhaps its greatest strength and weakness is its simplicity. But hard science can be discussed elsewhere. Just Give Money to the Poor introduces a broader audience, and gives impetus, to the simple but still-controversial idea: that redistribution works.

The authors recap evidence from two decades of experimental and pragmatic progress on social transfer programmes in the developing world. They argue that no-strings-attached, widespread systems of cash distribution are far more effective and cheaper than other models, such as vouchers, food subsidies (where monitoring creates costs) or microcredit. The key is that the money must be a dependable, substantial and easy source of income for the poor. Assured regular cash transfers – not charity or philanthropy – are the key, even at a relatively small scale, for achieving impressive outcomes:

“In the short term they reduce poverty levels and ameliorate suffering. In the medium term, they enable many poor people to exercise their agency and pursue micro-level plans to increase their productivity and incomes.  In the longer term, they create a generation of healthier and better educated people who can seize economic opportunities and contribute to broad-based economic growth.”

The target groups could be particularly vulnerable demographics – children, the elderly – or simply everyone. Programmes can be gradually expanded as experience grows, since garnering political support by demonstrating impact, fairness and adequacy, is key. Read the rest of this entry »

Governance across borders is all about building and/or changing institutions in a transnational realm. In this regard, existing institutions often turn out to be not so rigid or firm after all. The cartoon below, taken with permission of the author Winston Rowntree from a larger piece at viruscomix.com (via), hits the nail on the head:Institutions how they appear and how they areIn the context of copyright as an institution, I like to think of the large monster’s feet representing international copyright treaties such as WTO’s TRIPS Agreement or the WIPO Internet Treaties, the small monster being Shawn Fanning, the programmer of Napster.

(leonhard)

This entry is part two of a mini-series dedicated to the fascinating institutional landscape found on the Eastern edge of the European Union. It deals with the dearth of the public sector and the rejuvenation of religion.

Someone must have built all this infrastructure which now lies decaying throughout Eastern Europe. It bears the signs of more than twenty years of decay, so almost certainly it was the governments of the Warsaw Pact which paved the roads to the majority of villages, laid tracks between cities, erected gargantuan grain silos and stamped huge factory complexes out of the ground.

Yet many of today’s Eastern European states have too few resources (or hardly any at all) to provide the public infrastructure necessary for success in the game of capitalist competition. And, as regards the private sector, the current mode of production knows no place for means of production accumulated under the Five-Year-Plans of yesteryear.

The new European Union member states Romania and Bulgaria show many signs that transnational institutions can catalyse the development of infrastructure; while Ukraine and Moldova demonstrate the counterpoint of the damage that lack of investment by the public sector can do. All the while, across the border between the two worlds – at least that is how the border between EU and non-EU can feel, and is locally perceived – the church consoles the post-socialist sorrows of the masses. Read the rest of this entry »

When we write about such phenomena as governance across borders, our conceptualisation always hinges on dividing lines, those borders which governance may span. Especially for a research group working on transnational institutions, it’s important to contemplate: What do borders really mean?

The reality of borders takes on a wholly different dimension when leaving the comfort of Western Europe, with its checkpoint-free border crossings. Travelling along Europe’s (still somewhat wild) Eastern frontier, the significance of national boundaries and the institutions that sometimes do, sometimes don’t span them, is illuminated starkly, highlighting what one takes for granted.

Here, I’ll be sharing some – hopefully not too wanton – snapshots and insights into the fascinating institutional landscape which I encountered during some recent travels. Read the rest of this entry »

The Book

Governance across borders: transnational fields and transversal themes. Leonhard Dobusch, Philip Mader and Sigrid Quack (eds.), 2013, epubli publishers.
October 2017
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