Reflection on Interplay of Power, Conflict, and Development Finance

This chapter provides a critical reflection on the interplay between power, conflict, and development finance, situating power theory at the core of economic development analysis. It highlights how economic power manifests in governance, institutions, and financial systems, shaping both opportunities and constraints for sustainable growth. Drawing on perspectives from Marxist, structuralist, and institutionalist theories, the chapter examines how resource allocation, institutional capture, and asymmetries in global and domestic financial flows contribute to persistent inequalities. The relationship between power and conflict is explored through the political economy of resource-based economies, where elite dominance and exclusionary policies often fuel instability. Sub-Saharan Africa serves as a key reference point, where the “resource curse” demonstrates how resource wealth, absent strong institutions, exacerbates poverty and underdevelopment. The chapter then turns to development finance, assessing how global financial institutions, multilateral lenders, and domestic financial systems both mitigate and reproduce power imbalances. Structural adjustment programmes and conditional financing by institutions such as the International Monetary Fund and World Bank are critically assessed for reinforcing dependency, while alternative approaches, such as inclusive microfinance and participatory governance frameworks, are presented as more equitable pathways. Case studies—including Latin America’s structural adjustment experiences, Rwanda’s financial inclusion initiatives, and Chinese development financing in Africa—illustrate diverse outcomes in managing power asymmetries. Policy recommendations emphasise strengthening institutions, decentralising economic power, embedding conflict-sensitive approaches, and reforming international financial governance. Finally, the chapter reflects on whether sub-Saharan Africa and other developing regions require an “economic revolution”—a fundamental rethinking of growth models to prioritise structural transformation, equity, and sustainability. The paradox of resource endowment without prosperity underscores the centrality of governance, institutional design, and participatory development in transforming economic potential into inclusive growth.