♦ The Political Economy of Microfinance: Financializing Poverty. London: Palgrave Macmillan, 2015.
“In this richly documented book, Mader dispels the myth that debt can move the poor out of poverty. Far from an economics of liberation, microfinance is part of a politics of repression: it extracts more wealth than it creates, and reinforces economic dependence.” – Wolfgang Streeck
This book helps understand the enigmatic microfinance sector by analysing how it works as a financial system. Microfinance heralds less the end of poverty than a more financialised form of poverty; while it promises to empower, microfinance generates discipline and social control through a system of financial governmentality and extracts substantial resources from the poor, producing new crises and new forms of dispossession.
→Sample chapter (via IDS OpenDocs).
♦ Rendite machen und Gutes tun? Mikrokredite und die Folgen neoliberaler Entwicklungspolitik (Ed. with Gerhard Klas). Frankfurt: Campus, 2014.
This book presents researchers’, practitioners’ and journalists’ critical perspectives on microfinance and the broader developmental politics. It is the first to collect critical voices in German. It includes the topics of social business, water, overindebtedness, impact evaluation, commercialisation, financialisation, and post-development critiques (and country case studies from Bangladesh, Cambodia, India and Sudan), and questions contemporary development approaches which expect poor people to pay their own way out of poverty. (Also published as: bpb Schriftenreihe Band 1483, Bundeszentrale für Politische Bildung, Bonn 2014.)
♦ Governance across Borders: Transnational Fields and Transversal Themes (Ed. with Leonhard Dobusch and Sigrid Quack). Berlin: Epubli, 2013.
The book assembles key articles from the research blog “governance across borders” from a group of fourteen scholars all working on issues in global and transnational governance. The topics include accounting, labour, development, standardisation, financial regulation ecology, copyright, microfinance, water collective goods, and pirates.
Peer-reviewed journal articles
Microfinance is turning into “financial inclusion”, prompting the question: does financial inclusion work – in terms of driving development, promoting poverty alleviation, and being a viable business? A review of the logic and evidence must lead to skeptical conclusions.
As part of a special issue on recursivity in transnational governance, this article examines the workings of the microfinance industry. Recent efforts have sought to make microfinance more responsive and accountable. But the structure of the industry still restricts clients’ voice in practice, leading to occasional outbursts of discontent.
♦ Card Crusaders, Cash Infidels and the Holy Grails of Digital Financial Inclusion. Behemoth 9, 2, 59-81 (December 2016).
This article analyses and critiques the turn toward digital financial inclusion within development policy. Despite being fought in the name of the poor, profit-oriented logics and a thirst for new forms of power, rather than poverty alleviation, are fueling this current “crusade” for digitalised currency and against cash.
♦ All Myth and Ceremony? Examining the Causes and Logic of the Mission Shift in Microfinance from Microenterprise Credit to Financial Inclusion. (with Sophia Sabrow) Forum for Social Economics, 1-27 (2015). (→working paper version).
This article uses a discourse analysis to explain the (still ongoing) shift in the mission of microfinance from providing small loans for entrepreneurship to broader agendas of financial inclusion. It analyses this change through the theoretical lenses of instrumental rationalism and sociological institutionalism.
♦ Financialisation through Microfinance: Civil Society and Market Building in Water and Sanitation in India. Asian Studies Review 38, 4, 605-623 (October 2014).
This article presents some nuts and bolts of the book “The Political Economy of Microfinance”. It discusses the functionality of microfinance at expanding the frontier of financial accumulation, by establishing credit-based linkages between owners and borrowers of capital, and shows how microfinance works to build market relations through NGO projects for access to water and sanitation.
♦ Armutsbekämpfung als Mythos und Zeremonie? Ursachen und Logiken eines Strategiewechsels in der Mikrofinanz. (with Sophia Sabrow) Zeitschrift für Außen- und Sicherheitspolitik 7, 2 (April 2014), 175-198.
An earlier, more detailed (and German) version of the “All Myth and Ceremony?” article, dealing with the mission shift from microfinance to financial inclusion.
♦ Rise and Fall of Microfinance in India: The Andhra Pradesh Crisis in Perspective. Strategic Change 22, 1-2, 47-66 (2013).
This article presents an analytical narrative that explains the causes of the crisis of Indian microfinance in 2010, and a critique of the microfinance industry’s denial of culpability. Contrary to common claims that government interference caused the crisis, it shows how competition among profit-maximising lenders in an environment of chronic indebtedness fueled both the industry’s growth and its subsequent demise.
This paper discusses how microfinance projects for water and sanitation are based on individualism and a cost-recovery paradigm, and thereby ignore important collective action aspects and the underlying distributional problems. (See the discussion paper “Making the Poor Pay for Public Goods via Microfinance” for a deeper analysis of these issues.)
Working papers, book chapters, etc.
A short (German) think piece on the problematic intermeshing of political, profit and poverty motives in the global financial inclusion agenda.
♦ Poverty Reduction or the Financialisation of Poverty? (with Maren Duvendack) Chapter in Seduced and Betrayed: Exposing the Contemporary Microfinance Phenomenon. Bateman, Milford / Maclean, Kate (eds.). Albuquerque: University of New Mexico Press. pp. 33-48.
♦ Public Goods Provision Aided by Microfinance: Thanks to Groupthink, Ideological Blinkers, and Stories of Success. Chapter in Seduced and Betrayed: Exposing the Contemporary Microfinance Phenomenon. Bateman, Milford / Maclean, Kate (eds.). Albuquerque: University of New Mexico Press. pp. 183-202.
♦ How Do State–Business Relations Shape Sustainable Development? (with Jodie Thorpe) IDS Policy Briefing 141 (March 2017).
Key findings and policy recommendations from IDS’ recent work on state-business relations; development outcomes are shaped by the balance of power in negotiation between business and state actors.
♦ Book review of “The Crises of Microcredit”. Journal of International Development, 29, 2, 281-283 (March 2017).
♦ Failing Young People? Addressing the Supply-side Bias and Individualisation in Youth Employment Programming. (with Justin Flynn, Marjoke Oosterom, and Santiago Ripoll) IDS Evidence Report 216 (January 2017).
Youth employment is seen as a major global challenge, and many donor-funded programmes aim to train young people to better find work. But where are the jobs? We find that current programming is failing young people, with a bias towards enhancing what they individually supply to the labour market, rather than what the market collectively offers them. Efforts to widely raise aggregate demand and create jobs, rather than create more job-seekers and unsustainable micro-entreprenterprises, are needed. (See also this blog article.)
♦ State-Business Relations Beyond Growth: Bringing in Development. (with Seife Ayele, Jodie Thorpe, Jing Gu, Mar Morales, and Philip Reed). IDS Evidence Report 215 (December 2016).
We argue that state-business relations are at the heart of the Sustainable Development agenda. Our political economy perspective suggests paying greater attention to the essentially political processes of negotiation through which business and state actors interact to shape development outcomes including, but going far beyond, economic growth.
♦ Questioning Three Fundamental Assumptions in Financial Inclusion. IDS Evidence Report 176 (February 2016).
This paper looks critically at three core assumptions in the financial inclusion discourse: that financial inclusion drives development (and not vice-versa); that the poor demonstrably benefit from financial inclusion; and that financial inclusion is a good business opportunity. Neither of these assumptions is disproved, but they are shown to be problematic. (See also this blog article.)
♦ Microfinance and Financial Inclusion. Chapter 37 in the Oxford Handbook on the Social Science of Poverty, by Brady, David / Burton, Linda (eds.) (2016). New York, NY: Oxford University Press. (→pre-edit version)
The Handbook chapter summarises (for students and researchers) the debates on microfinance impact, narrates a concise history of microfinance and recent financial inclusion efforts, and analyses recent crises, ongoing changes in methods and mission, and the broadening of scope (for instance microfinance in wealthier countries).
♦ Financialisation through Microfinance: Civil Society and Market-Building in India. Book chapter, in: Jarvis, Darryl and Toby Carroll (eds.) (2015): Financialisation and Development in Asia. London: Routledge. pp. 69-87. (see also article, above)
♦ The Extractive Success of Financial Systems: Microfinance and the Financialisation of Poverty. Working/conference paper (April 2015).
♦ Mikrofinanz zwischen „Finanzieller Inklusion“ und Finanzialisierung. Book chapter in: Heires, Marcel / Nölke, Andreas (eds.) (2014): Politische Ökonomie der Finanzialisierung. Berlin: Springer. pp. 163-177.
♦ Financialisation through Microfinance: Credit Relations and Market Building. New Approaches to Building Markets in Asia Working Paper 40. Singapore: Centre on Asia and Globalisation, Lee Kuan Yew School of Public Policy, National University of Singapore, 2012.
♦ Making the Poor Pay for Public Goods via Microfinance: Economic and Political Pitfalls in the Case of Water and Sanitation. MPIfG Discussion Paper 11/14. Cologne: Max Planck Institute for the Study of Societies, 2011.