Doing ‘Development’ Direct to Sector: The International Finance Corporation and the Financialisation of ‘Development’ in Asia

Abstract

This paper describes an important new push taking place in development practice, whereby international public organisations are broadening and deepening private sector activity in the underdeveloped world in ways well beyond Washington consensus structural adjustment or even post-Washington consensus (PWC) forms of institutionally-oriented ‘participatory neoliberalism’. Described here as the ‘financialisation of development’ (FoD), this process – which dovetails with the late PWC agenda – is attracting increasing resources that are formally allocated directly to private actors around states, yet which also demand and promote shifts in state form and function that relate to cultivating an ‘enabling environment’ for capital. The International Finance Corporation (IFC) – the World Bank’s private sector arm – is at the vanguard of this process, bridging the ‘public-private divide’ in myriad ways. This paper first conceptualises the project that the likes of the IFC are involved in, drawing upon a framework based upon various lineages of critical political economy. From this perspective, FoD is seen as a rapidly expanding new push within neoliberalism, emerging out of the frustrations of earlier phases of orthodox ‘development’ practice. This approach entails rolling out the market state and establishing market society, two tasks that FoD’s instruments are highly tuned towards achieving. Focusing on the work of the IFC in the Asia-Pacific, the second section of the paper then presents three snapshots of FoD in action. These serve to illustrate the strategies and ‘logic’ underpinning the push, while also pointing to the risks accompanying it.