MANG6255 Development Finance & Sustainability
Finance is of particular importance in order to develop an economy. However, many finance courses neglect this aspect. In this module, by contrast, the role of finance in development will be a central feature. At the same time, many observers have become aware of the limits to growth, due to resource constraints. This has implications for the sustainability of growth and development. In this module students learn about the role and function of banking in connection with economic development, and in connection with the issue of resource constraints and sustainability. Concerning the first topic, it is noticeable that economies that developed rapidly during the 19th and 20th century were mainly utilising the banking sector to fund their growth. Some of the questions covered include: Is using bank funding superior to funding via the issuance of securities? What is the role of borrowing from abroad for economic growth and development? What is the role of international financial organisations, such as the IMF, the World Bank and regional development banks? Concerning the second topic, in this course the limits to growth are discussed, including the need for sustainability, the costs and consequences of environmental degradation and depletion of finite real resources. A central feature of the module is to discuss the role of the banking sector in this problem, and how it could play a constructive role in order to tackle it.
Aims and Objectives
1. To apply banking and international finance concepts specifically to developing countries. 2. To acquaint students with the latest empirical research, theory and practical applications in the areas of development finance on the one hand, and sustainability on the other, while also focusing on the connection between the two areas. 3. To demonstrate how rational behaviour of individual agents and financial institutions may produce unexpected or undesirable overall outcomes in markets and the economy (such as banking, balance of payments or debt crises), which have a negative feedback to the financial sector. 4. To instil a recognition and understanding of sustainability issues, the role played by the financial sector in this, and create awareness of potential solutions. 5. To acquaint students with the work of the international development banks (and other relevant international organisations) in the area of international banking and finance (a topic that cannot be covered in the International Banking module). 6. To acquaint students with alternative financial systems, including public and cooperative (third sector) financial institutions, Islamic and non-interest banking, as well as the recent innovations in microfinance (micro-credit, micro-equity).
Knowledge and Understanding
Having successfully completed this module, you will be able to demonstrate knowledge and understanding of:
- The main theories and techniques underlying the topics of development finance and sustainability
- Important case studies of diverse experiences in development finance
- The mechanics and links of banking, balance of payments and debt crises
- The meaning and implications of the sustainability concept, applied to economies and financial systems
- The role of the financial sector in affecting the degree of sustainability of sectors and economies
- Alternative approaches to development finance and policy implications
Transferable and Generic Skills
Having successfully completed this module you will be able to:
- Through the semester examinations, group discussions and assignments, you will demonstrate skills in written and oral communication regarding the analysis of issues relating to development finance and sustainability
- Analyse alternative development finance strategies.
- Make effective recommendations on how to finance sustainable development strategies.
- Offer skills directly applicable in employment in the public sector, development banks and international organisations.
- Impress with analytical and critical thinking abilities and greater motivation to affect positive change.
Subject Specific Intellectual and Research Skills
Having successfully completed this module you will be able to:
- Tackle and suggest solutions to key problems in global banking and finance
- Apply analytical tools that help avoid the fallacy of composition (pars pro toto fallacy) in finance
- Analyse micro-macro feedback loops
- Critically evaluate the relative merits of alternative development finance strategies.
- Critically evaluate the sustainability of financial sector activity and its impact on the sustainability of other agents in the economy
- Recognise the shortcomings of conventional approaches that fail to consider sustainability and tackle problems from a sustainability perspective
- Development finance in neoclassical thought - Empirical reality of development finance; some problems - The role of international and regional development banks - Domestic-led finance vs. foreign borrowing: case studies - Domestic-led finance vs. foreign borrowing: pros and cons - The recurring banking, balance of payments and debt crises: micro-macro feedback - Finance constraints and capital structure - Market structure, corporate governance, incentivisation and the design of financial systems - Cooperative financial institutions and microfinance - Sustainability in economics and finance - The financial system and sustainability - Case studies: sustainable development vs. unsustainable development - Alternative financial systems: cooperative finance - Alternative financial systems: Islamic finance
Learning and Teaching
Teaching and learning methods
The course will consist of 6 weekly 4-hour lectures. Discussion threads will be set up for each of the syllabus topics, to which you should post any questions that you have concerning the material. The module content will be delivered through a series of lectures with lecture material being posted on Blackboard to allow an additional point of access. Teaching methods include Lectures, including using vocal chords of the lecturer, as well as classroom tools, such as the blackboard, powerpoint presentations and other means. There is an emphasis on Q&A and classroom discussion Learning activities include Reading Essays and class presentations
|Total study time||150|
Resources & Reading list
Fry, Goodhart, Almaida (2007). Central Banking in Developing Countries.
Seidman, Karl. F. (2004). Economic Development Finance.
Ramon Lopez and Michal Toman (2006). Economic Development and Environmental Sustainability: New Policy Options.
Spratt, Stephen (2008). Development Finance: Debates, Dogmas and New Directions.
Sammis B. White, Richard D. Bingham and Edward W. Hill (eds.) (2003). Financing Economic Development in the 21st Century.
Michael Redclift (2007). Sustainable Development and Free Trade.
Simon Bell (2008). Sustainability Indicators: Measuring the Immeasurable.
Vittoria Boscia, Alessandro Carretta, Paola Schwizer (2009). Cooperative Banking: Innovations and Developments.
Jonathan Strand (2010). Regional Development Banks: Lending with a Regional Flavor.
Werner, Richard Journal articles. ,0 , pp. 0.
Renato J. Orsato (2009). Sustainability Strategies.
Loorbach, Derk. Transitions to Sustainable Development: New Directions in the Study of Long Term Transformative Change.
Conducting Sustainability Assessments.
Mohammad Mansoor Khan, M. Ishaq Bhatti (2008). Developments in Islamic Banking: The Case of Pakistan.
Pierre-Andre Chiappori, Jean-michel Lasry, Damien Fessler (Eds.) (2009). Finance & Sustainable Development: Opposition or Partnership?.
Jeucken, Marcel. (2005). Sustainability in Finance: Banking on the Planet.
United Nations (1997). Sustainable Development Finance: Opportunities & Obstacles Proceedings Expert Group Meeting on Financial Issues (1966 Manila, Philippines.
Maxwell J. Fry (1994). Money, Interest, and Banking in Economic Development.
John Olberding, Lisa Barnwell Williams (2010). Building Strong Nonprofits: New Strategies for Growth and Sustainability.
Werner, Richard. (2007). New Paradigm in Macroeconomics.
|Examination (2 hours)||70%|
|Multiple choice Test (35 minutes)||30%|
|Examination (2 hours)||100%|
|Examination (2 hours)||100%|
Repeat type: Internal & External
Costs associated with this module
Students are responsible for meeting the cost of essential textbooks, and of producing such essays, assignments, laboratory reports and dissertations as are required to fulfil the academic requirements for each programme of study.
In addition to this, students registered for this module typically also have to pay for:
Books and Stationery equipment
Recommended texts for this module may be available in limited supply in the University Library and students may wish to purchase the core/ recommended text as appropriate It is possible to do well in this course without purchasing any books, but instead following the lectures and handouts, and reading the journal articles cited in the lecture.
Please also ensure you read the section on additional costs in the University’s Fees, Charges and Expenses Regulations in the University Calendar available at www.calendar.soton.ac.uk.