The Global Political Economy of Development

DEVS 230/3.0

Applies global political economy perspectives to key aspects of development finance. Topics include the introduction of basic economic terms, the role of the International Monetary Fund, World Bank, World Trade Organization, and the growing roles of Transnational Corporations and financial markets in development.


This course introduces students to important debates within the political economy of development. In using a political economy perspective we examine how different types of power relations are formed around the production, distribution and consumption of goods across local, national and international settings.

We examine how these power relations structure the institutions, processes and outcomes of ‘global development’ and we do this historically, by examining the ways in which post-colonial countries were integrated into the world economy in the decades following the Second World War.

Subsequently, we use this basis to examine more contemporary issues, from free trade to good governance to corporate social responsibility. No prior study of economics is needed for this course – we will be concerned with the real world of development, not abstract mathematical models.

There are three main sections to the course:

First, we examine how the key institutions of the contemporary global economy were established and evolved in the period following the Second World War. We assess in detail the context that many newly-independent countries found themselves in following the colonial era and the strategies that many followed in order to try and achieve ‘development’ through industrialization. Despite strong economic growth in the 1950s and 1960s, this ‘golden era of development’ ground to a halt in the 1970s and, by the 1980s, many countries became mired in debt. We examine different perspectives on what caused this ‘Debt Crisis’ and examine the means used to resolve it, particularly the role of the International Monetary Fund (IMF) and World Bank in promulgating structural adjustment programs.

We then build on this to examine contemporary debates over the strategies that countries should follow in order to promote ‘development’. We focus on recent debates over trade liberalization, foreign direct investment, financial flows and good governance. These issues have stirred controversy within development studies: there are contrasting views on how policies such as trade liberalization and openness to foreign capital should fit (if at all) into a country’s development strategy. Moreover, opinions are divided over who are the winners and losers when such policies are pursued. We examine the various sides of these debates and ask how a political economy perspective helps us understand them.

For the final two weeks, we turn to the issues of corporate social responsibility and the role of NGOs in development.  Again, we use a political economy perspective to reflect on the promises and pitfalls of both as vehicles of progressive change in global development.

Online discussion forums will take place each week to provide a space for you to discuss the key debates around the topic and allow you to explore the week’s material with your peers in order to improve your understanding. The forums will be an opportunity to discuss the readings and to clarify the main points of contention between them. You will be expected to elaborate on what the strengths of the readings are, how they relate to each other, and how they help us understand the issue at hand.


Learning Outcomes:

On completing this course it is envisaged that students will have:

  • A solid grounding in the political economy of development
  • An ability to present and evaluate some of the key debates over development strategy, from trade liberalization to the role of NGOs and global finance
  • A conceptualization of the power relations between the various actors that shape the processes and outcomes of global development
  • A clear understanding of the functions (past and present) of the three key institutions in global development: the International Monetary Fund (IMF), World Bank and World Trade Organisation (WTO)

Week 1


The first week introduces the general themes and content of the course, the grading scheme and what is expected of students.


  • Susan Strange – “Power in the World Economy”
  • Ananya Mukherjee Reed – “Conceptualizing Human Development: Towards A Social Power Approach”

Week 2

From Colonialism to the Development Project: The Institutions and Politics of Development

In this section we examine the role of development finance in the establishment of the ‘Development Project’ in the era following World War II. We look at the establishment of the IMF and World Bank as part of the Bretton Woods System and examine their original purposes and functions. We examine the strategies that many developing world countries used to try and achieve ‘national development’. Finally, we look at the power politics that defined the period. Within the Cold War period aid was almost universally tied to wide geo-political objectives, a situation that led many countries of the South to attempt a ‘non-aligned’ movement that would divorce economic assistance from Cold War politics.


  • Peet, Richard (2003), “Bretton Woods: Emergence of a Global Economic Regime,” in Unholy Trinity: The IMF, World Bank and WTO. London: Zed Books.
  • Prashad Ch5 “Buenos Airies: Imagining an Economy” (p. 62-74) from form the Darker Nations

*Africa: The Rise of Nationalism and the Legacy

Week 3

The Debt Crisis

The 1982 debt crisis is a pivotal moment in the history of development. It brought to a close an era of optimism about development in post-colonial countries. It opened a new era in which very different solutions to development problems would emerge. The crisis erupted in 1982 when Mexico declared itself unable to meet its debt obligations and it soon spread to other countries in the South. Not only were a number of sovereign countries such as Mexico and Brazil facing bankruptcy, but also by potentially defaulting on massive loans from major international banks, a collapse of the global financial architecture seemed a very real possibility. In this context, the 1982 debt crisis was a watershed moment in global history. It led to major changes in the structure of the global economy, as well as the roles and operations of international financial institutions such as the IMF and World Bank. Here we look at the causes and consequences of the debt crisis, including breaking down and explaining some of the technical vocabulary that forms part of the analysis.


  • Ferrero, Vincent & Melissa Rosser (1994) – “Global Debt and Third World Development,” pp. 314-321 in M. Klare & D. Thomas (eds), World Security: Challenges for a New Century. New York: St. Martin’s Press.
  • GATT-Fly (1985) – “The Origins of the Debt Crisis,” in Debt Bondage or Self Reliance: A Popular Perspective on the Global Debt Crisis. Toronto: GATT-Fly

* “Debt and Dictators”

Week 4

Conditionality and Structural Adjustment

Following the 1982 debt crisis, the World Bank and IMF greatly intensified the conditions attached to loans made to the financially stricken developing world. Specifically, they suggested that the countries of the developing world needed to undertake a period of ‘structural adjustment’ in order to correct macroeconomic imbalances and re-orientate their economies towards export promotion. This policy prescription – also sometimes referred to as the ‘Washington Consensus’ or ‘neoliberalism’ – has become the source of considerable debate. In the following two articles – both written following a joint World Bank and NGO evaluation of Structural Adjustment – the two sides reach very different conclusions about what went well, what went badly – and why. Which set of arguments seems more convincing to you?


  • World Bank (2001) Adjustment from Within: Lessons from the Structural Adjustment Participatory Review Initiative.
  • SAPRIN (Structural Adjustment Participatory Review International Network). 2004. “Structural Adjustment, Poverty and Inequality,” pp. 203-224 in Structural Adjustment: The Policy Roots of Economic Crisis, Poverty and Inequality. London: Zed Books

* “The New Rulers of the World”

Week 5

Trade and Development: Comparative Advantage for Everyone or Imperialism for the Few?

Structural adjustment promoted policies of trade liberalization as a key element of macroeconomic restructuring. Countries were expected to remove barriers to foreign products entering and being sold in national markets. Trade liberalization has been a particularly divisive issue in development debates: there are divided opinions over both the effectiveness of trade liberalization in promoting development and over which interests within the global economy benefit from liberalized trade. A key player in promoting trade liberalization has been the World Trade Organisation (WTO) and therefore it has been a lightening rod for both praise and criticism. The WTO suggests its mission is to promote global economic integration through trade liberalisation in order to encourage the spread of capital from North to South. Given the importance of the free trade agenda within debates over development finance, we examine the basic arguments of both pro- and anti- free trade lobbies, and look at the workings of the WTO.


  • WTO (2003) – Ten Benefits of the WTO Trading System.
  • O’Hearn, Denis (2003) – “Is Trade an Agent of Development?,” pp. 111-124 in McCann and McCloskey (eds), From the Global to the Local. London: Pluto Press.
  • Keneth Surin – The WTO: A Flawed Conception
  • The Economist – “The Future of Globalization” (July 27th, 2006)

*The Global Banquet

Week 6

Midterm Exam

Thursday June 13 from 12:01AM to 11:59PM

Week 7

Foreign Direct Investment – The Motor of Development?

Within the context of structural adjustment, it is widely argued that increased levels of foreign direct investment (FDI) – that is, relatively long-term investment in local enterprises from foreign companies or investors – can be the motor for development. FDI is suggested to provide capital and expertise that leads to employment and upgraded industry and services in the recipient country. The ultimate result, as argued by the OECD report below, is economic growth and poverty reduction. Others, however, have criticized the emphasis on FDI as a motor for development, suggesting that building local capacity is more important for most developing world countries. We examine various sides of the debate.


Week 8

Financial Flows, Financial Crises

Alongside FDI, the 1990s saw an emphasis placed on development countries attracting foreign portfolio investment (FPI) – that is, potentially short-term investment from abroad in domestic stocks, government bonds and other financial instruments. The International Monetary Fund (IMF) has insisted that FPI is an invaluable form of development finance. Others have critiqued the volatility of financial flows of this nature, which they suggest led to devastating crises in Mexico (1994), East Asia (1997-8), Brazil (1998), Russia (1998) and Argentina (2001). The current crisis has reignited some of these older debates, particularly on the issue of crisis management in the global economy.


  • Jeffrey Frankel (1998) - The Asian Model, the Miracle, the Crisis and the Fund, paper delivered at the U.S. International Trade Commission, April 16, 1998
  • Joe Stiglitz (2002) – The East Asian Crisis, from Globalization and Its Discontents. New York: Norton.
  • Devesh Kapur (1998) – The IMF: Cure or Curse? Foreign Policy; Summer 1998.

* “The Crash”

Week 9

Good Governance and Investment Climate: A New Conditionality?

Over the 1980s and 1990s, the structural adjustment policies of the IMF and World Bank were seen to have extremely mixed results and attracted growing levels of criticism. By the turn of the new millennium, the World Bank had come to emphasise a new set of reforms – aimed at creating the correct social and institutional structures for market expansion – that they suggested were needed for sound development and poverty reduction. In an initiative with the IMF called the ‘Poverty Reduction Strategy Papers’ (PRSPs), the Bank mandated that the most impoverished countries embrace this ‘comprehensive development framework’ in order to receive development finance. The first reading – by James Wolfensohn, president of the World Bank 1995-2005, sets out the ideas behind comprehensive development. Pender offers a more critical examination.


  • Paul Wolfowitz (2006) - Good Governance and Development: A Time For Action
  • Matt Andrews (2008) – The Good Governance Agenda: Beyond Indicators Without Theory, Oxford Development Studies, 36:4, 379 — 407.
  • John Pender (2001) – From Structural Adjustment to Comprehensive Development. Third World Quarterly, 22(3).

Week 10

Corporate Social Responsibility and Development: The Way Forward or a Blind Alley?

As we have seen in previous weeks, the financing of development on a global scale has been placed increasingly in the hands of private corporations and investors. One question that has garnered increasing attention over recent years is whether or not corporations that invest in the developing world do so in a socially responsible manner. This has led to growing calls for codes of conduct for corporations and investors, and simultaneously the proliferation of voluntary codes of conduct created by corporations themselves. Is corporate social responsibility (CSR) the new method of ensuring equitable and sustainable development, or is it a sham, as its critics suggest?


  • Michael Blowfield (2005) - Corporate Social Responsibility: reinventing the meaning of development? International Affairs 81(3), 515-524.
  • Anita Chan et al. (2006) - Critical perspectives on CSR and development: what we know, what we don’t know, and what we need to know, International Affairs, 82(5), 987-997.
  • The Economist – Corporate Social Responsibility: Two Faced Capitalism (Jan 22nd, 2004)

Between Midnight and the Rooster’s Crow

Week 11

Aid, NGOs and Private Financing for Development: The New Saviours or the New Colonialists?

Our final topic looks at the aid industry. Over the last decade the number and size of non-governmental organisations involved in development projects has increased dramatically. It is now estimated that significantly more development finance is channeled through NGOs than the World Bank. Often in the development literature NGOs are given a very positive spin, portrayed as progressive grassroots organisations that can be a driving force of development. However, new literature is challenging this portrayal and has questioned the developmental effects of these private organisations, whose primary accountability is to their own financers in the North rather than populations in the South. Could the proliferation of NGOs be creating a crisis of accountability in the South? Have the positive effects of NGO actions been vastly overstated? Could NGOs be a new type of colonial endeavour? To gain some perspective on these questions, we examine questions of power within the aid industry, focusing on the ways different kinds of NGOs receive funding and how this effects their actions in the global South.


  • Manji, Firoze (1998) – The Depoliticisation of Poverty
  • Bob, Clifford (2006) – Marketing Humanitarian Crisis
  • Binyavanga Wainaina – The Power of Love

"The Ethics of Aid: One Kenyan’s Perspective” (2009)

Week 12

Review Week for Final Exam

Time Commitment

To complete the readings, assignments, and course activities, students can expect to spend, on average, about 10 - 12 hours per week on the course.

Course Resources


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Queen’s courses are weighted in credit units. A typical one-term course is worth 3.0 units, and a typical two-term course is worth 6.0 units. You combine these units to create your degree. A general (three-year) BA requires a total of 90 credit units.

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