Quick Questions on Development

Microfinance There are several structural barriers that have inhibited the progress of women to high-power positions. There are basic social structures, but then there are also manifestations of those social structures. In many (almost all) societies, the prevailing social structure has viewed women as unsuitable for high power positions. Most of the time there has been room for the odd exception, but largely women are simply not given any opportunity.

People in high-power positions are often groomed into those positions from an early age, or they benefit from having some opportunity open up later on. For the most part, women have had access to neither. Women will often be raised to see themselves in a light that does not encourage the pursuit of high level positions, taking them out of the race before the starting gun.

As an example, studies of microfinance in Nicaragua showed that women tended to invest in smaller businesses with less growth potential -- their ambitions curtailed by their social standing (Haase, 2011). These biases manifest in official policy. Bernasek (2003) notes that women have lower access to capital than men in most societies, and lower levels of land ownership. As a result, they have a lower starting point when it comes to acquiring wealth.

A lower starting point and less access to the means by which wealth can be built equate to lower levels of wealth overall. The intersectional perspective adds the necessary layers to the issue, because it allows for context to be understood -- the gender context is one, but class, race, religion and culture are all important variables when understanding access to positions of high power. Understanding who these different dimensions intersect with one another will help in setting better policies, and understanding how to help people better. 2.

Microfinance is an effective development strategy, though certainly not capable of development on its own. It is, rather, a complementary piece. Microfinance provides funding to small businesses in the developing world, typically in countries where the banking system does not serve the needs of entrepreneurs. Microfinance provides people with ideas the opportunity, which they otherwise would not have for lack of access to capital. One of the aspects of microfinance is that it can provide loans for women, who are in many cases facing greater poverty than men.

The status of women in a country like Bangladesh, where microfinance was started -- is such that they have less economic opportunity, and that cuts across the social spectrum. Microfinance helps to close that gap, by providing women with at least the opportunity to better their lives. It is not, however, a solution in and of itself. Microfinance has to work in concert with other social and economic reforms, as it merely provides one of the preconditions for economic empowerment -- access to capital.

The other preconditions are often social, political or cultural. As Bernasek (2003) notes, status is not just about wealth in Bangladesh, but also about adherence to social norms and customs. Where those social norms dictate that women not pursue entrepreneurial activity, or that they only pursue certain types, then women still will not have the full opportunity for status that men will have. In that sense, microfinance is just a starting point.

This is where an understanding of intersectionality comes into play -- addressing multiple factors that combine to create a current condition is the pathway to change, not just changing one of the conditions. It is insanity to think that microfinance was going to magically address all of the issues holding back women, and unfair of critics to even go there. Haase (2011) betrays his bias by seeking to discredit "market forces" because microfinance doesn't solve the world's problems -- nobody ever said it does unless they were engaging in political spin.

It solves one problem -- access to capital. The other issues are not so much economic in nature and therefore were never going to be solved by a finance reform; Haase's recommendation that bankers should also be responsible for changing entire cultures is absurd -- he can't even name one "activity" that should be adopted even though these "activities" are at the core of his recommendation. That's great for a rant, but makes for a very poor argument. 3.

There are several processes that have led to current disparities between developed and developing nations. Bernstein (no date) notes that during the early stages of the Industrial Revolution, the rates at which colonial powers developed were different, and that these differences were reflected in the development pathways of their colonies. This holds some explanatory power -- for instance Portuguese colonies were less-developed than English ones. But there is also a flaw here in that many post-colonial nations already existed by the time the Industrial Revolution began, certainly in North America.

The IR argument might explain the difference between Canada and Argentina, for example, but not the United States and Argentina. Many developing nations were independent by the early to mid-19th century. So there must be other explanations as well. Bernstein also notes that the time frame for colonization was different -- African nations typically experienced shorter periods of colonization, and thus had less infrastructure.

A good example of this theory might be in Africa where the areas colonized the longest (such as Cape Town) happen to be the most developed. In most of Africa, colonialism was strictly exploitative. While Bernstein ascribes racism to capitalism falsely, he is correct in noting that colonialism often came with overtones of racial superiority that left exploitation of resources to the colonizing country and the local populations were usually excluded from such gains.

None of this explains recent disparity -- most economic gains have come in the fossil fuel era,.