Global Finance and Development

The question of money and how to provide and acquire it where needed is axiomatic to development: how to fund development has been central to the growth of the discipline and the project of development ever since its inception. But the relationship between finance and development is more contested and complex than this. The question of finance took on a different form with the debt crisis from the 1980s, and again during the currency crises of the 1990s - finance also has distinctly anti-development tendencies. Global Finance and Development offers a broad and critical understanding of these different connections and perspectives. Meanwhile, the debate about funding development is now, again, central to poverty reduction. Public interest and mobilization over debt cancellation and the push towards the MDGs in 2015 means that financing for development has re-emerged as the hot topic. Understanding finance and development is essential for all those concerned with poverty, inequality and development. Global Finance and Development describes and explains the variety of relationships between finance and development. Finance is broken down into its various aspects in separate chapters on aid, debt, portfolio investment, FDI, microfinance and remittances (see sections three and four for details). Throughout the text finance is presented as a double-edged sword: it is a vital tool towards poverty reduction, helping to fund development, but also more critical approaches remind us about the ways in which finance can hinder development - for example the developmental impact of financial crises, the exploitation of sweatshop labour. It is because of this dual perspective the title 'Global Finance and Development' is the most appropriate, rather than, say, 'Financing Development'. The text develops a number of themes through the different chapters, these include: the relationship between public and private sources of finance in concrete terms - as the changing composition of capital flows to the developing world - as well as the debates about direct funding versus the allocation of credit through commercial financial markets. Another central theme is the interaction of different levels, from the global structure of finance through to local and everyday practices. As such, the text will emphasize the global context, but illustrate its operation through specific and grounded case studies. The text will help the reader develop a critical understanding of the nature of finance and development. Using the various perspectives and examples introduced in the text the reader will be able to develop their own position on questions of finance and financing. Throughout the text the reader is encouraged to see financial processes as embedded within the broader structure of social relationships. Finance is defined and demonstrated to be money and credit, but also, crucially, the social relationships and institutions that enable the creation and distribution of credit and the consequences thereof.