CANDIDATE NAME: CAITLIN BURBRIDGE
CANDIDATE NUMBER: 311158
POLITICAL ECONOMY OF DEVELOPMENT
TUTOR: GIOVANNI COSI
With reference to a particular case study, explain how an
understanding of spatial processes can better inform our
understanding of political economy.
WORD COUNT: 2,962
The political economy is inherently spatial. A common flaw of analytical treatments
of globalism is that they have ‘tended to naturalise and exogenise their object of
study-be this in the form of an all-powerful globalisation process or the allencompassing politics of neoliberalism’ (Peck,2002;383). In order to redress this
assumption which informs much policy, it is necessary to understand the complex
ways in which spatial processes produce specific local realities. In a critique of the
World Bank’s approach to space as a ‘fixing’ mechanism for neoliberal inevitabilities
(2009), it is necessary to understand space as a complex process in which the local
and global are mutually constituted. Only through this understanding of spatial
processes can a more comprehensive understanding of the political economy be
achieved. This essay shall pursue four forms of spatial process, with particular
emphasis on post 1980’s neoliberalism as a way of applying the study to
contemporary situations; capital’s spatial fix, growth of cities, the relationship
between the local and the global, and finally the way which special relationships
construct particular imaginations. This process of analysis shall inform a more indepth study of the relationship between oil and space in the Niger Delta exposing
the way international processes both mask and produce complex realities on the
ground. An understanding of complex spatial processes is fundamental for a
comprehensive understanding of political economy, both of exposing for whom
capitalism is beneficial, and in turn revealing inequalities which are inherent within
this spatial system.
For Ross, ‘history has gone spatial’(1988;76). An analytical focus on the ideas of
Henri Lefebvre provides a necessary starting point from which to understand the
political economy. As Smith identifies, Lefebvre ‘coined the phrase ‘the production
of space’(Lefebvre in Smith,1990;90). Lefebvre’s revolutionary thinking exposed the
idea that the reproduction of social relations of production constitutes the central
and hidden process of capitalist society, a process which is inherently spatial
(Smith,1990;90). The means by which Lefebvre perceives capitalism to attenuate its
own internal contradictions is ‘by occupying space, by producing space’
(Smith,1990;91). ‘Space, occupied by neo-capitalism, sectioned, reduced to
homogeneity yet fragmented, becomes the seat of power’(Lefebvre, in Smith
1990;91). Soja extends this understanding of spatial relations by arguing that ‘not
only is the fragility and transitoriness of contemporary social relations expressed ‘in’
space; the production of space is increasingly the means by which social difference is
constructed and reconstructed’(Soja,1992;64).
Having provided an analytical and philosophical understanding of the way that space
is reproduced, it is important to begin by outlining the World Bank’s neoclassical
vantage point on the relationship between spatial processes and development, in
order to understand how a critique from a heterodox perspective can expose the
complexities of spatial relationships masked in neoclassical ideology. It must not be
ignored that the devotion of the 2009 World Development Report to ‘reshaping
economic geography’ and to elevate ‘space and place from mere undercurrents in
policy to a major focus’ (World Bank,2009;3) provides an encouraging move within
mainstream policy. However, the World Development Report 2009 report reflects a
narrow understanding of these spatial processes, advocating the unleashing of the
market, in spatial terms. The problem, as identified by the World Bank, is that of
concentration and convergence; economic growth is and ‘will remain’ unbalanced’
(World Bank,2009). Therefore, to address this problem, the World Bank advocates
three spatial solutions; agglomeration, migration and specialisation (World
Bank,2009). Agglomeration is seen to ‘foster economic growth’ by speeding up
migration, capital mobility and trade. Migration reduces distance to density and is
influenced by processes of agglomeration and specialisation. Finally, specialisation is
prescribed such that scale economies have reduced transport costs and technology
benefits from being geographically concentrated (World Bank,2009).
A fundamental flaw of this 2009 World Bank report is its appropriation of space as a
means by which to adjust existing weaknesses in the capitalist system, rather than
recognising, as advocated by spatial political theorists, the totalising way that space
is reproduced. The report sees uneven development is inevitable, but also a primary
means of stimulating growth. Addressing in particular the process of microfinance
projects, the report argues that the extension of such credit into slum areas and the
subsequent market integration of what we might refer to as the ‘bottom billion’
(Collier,2007) is a key solution to global poverty. However, as articulated by Harvey,
‘there is plenty of evidence that this ‘raiding’ of ‘the wealth at the bottom of
pyramid’ by financial institutions extracting high rates of return actually constitutes a
system of ‘debt-peonage’ for the mass of the population’ (Harvey,2001). As argued
by Smith, the problem of uneven development ‘is like a plague of locusts. It settles in
one place, devours it, then moves on to plague another place’ (Smith,1990;152).
Appropriating spatial solutions to fix neoliberal ‘inevitabilities’ only re-enforces
neoliberal principles for development.
In order to apply this rather abstract critique, it is necessary to turn to the work of
David Harvey. As Harvey identifies, ‘for geographers like myself…the production,
reproduction and reconfiguration of space have always been central to
understanding the political economy of capitalism’(Harvey,2001;24). Harvey’s
assertion that ‘the question is not…how globalisation has affected geography but
how these distinctive geographical processes of the production and reconfiguration
of space have created the specific conditions of contemporary globalisation’
(Harvey,2001;24), reveals the relationship between Lefebvre’s theory of the
production of space, and its relevance to capitalism. For Harvey, globalisation has
largely been interpreted in terms of ‘the spatial fix’. Globalisation, as a contemporary
form of capitalism, is obsessed with constant geographical expansion in pursuit of a
spatial fix for its crisis tendencies(Harvey,2001). Harvey draws three important
conclusions from this assertion. Firstly, ‘capitalism could not survive without being
geographically expansionary (and perpetually seeking out spatial fixes for its
problems’ (Harvey,2001;25). Secondly, ‘major innovations in transport and
communication technologies were necessary conditions for that expansion to occur
(hence emphasis on the evolution of technologies to break down spatial barriers)’,
(Harvey,2001;26). Finally, its modes of geographical expansion depended crucially
upon whether it was the search for markets, fresh labour powers, resources (raw
materials) or fresh opportunities to invest in new production facilities that was
crucially at stake (Harvey,2001;26).
Sassen provides more specificity to Harvey’s analysis by identifying exactly how the
ambiguous processes of globalisation cause agglomeration on the ground; her
analysis uses the lens of global cities. The example of the North Atlantic Region
reveals a ‘sharp concentration (of cross border capital flows) in certain areas of the
world and a growing incorporation of particular sites in the less-developed world’
(Sassen,2002;18). The major concentration of economic processes in the world today
are held in the North Atlantic region, be it general foreign direct investment flows,
overall financial flows, or the new strategic alliances among financial centres.
(Sassen,2002;18). Secondly, studies reveal a significant amount of growth in the
absolute level of flows going to other parts of the world (Sassen,2002). It becomes
clear that capital is actually flowing to a select number of sites. For example, what
appears to be a huge increase in foreign direct investment flows to Latin America, is
actually concentrated in Brazil, Mexico and Argentina (Sassen,2002). If we pursued
this line of analysis further then it would be possible to disaggregate the ways in
which these flows construct centres and peripheries within those countries.
Therefore this transnational economic system has its centre of gravity (both in terms
of intensity and value of transactions) in the North Atlantic region. ‘Thus, while
globalisation does indeed entail dispersal, it is also evident that the combination of
concentration and network expansion makes for a strongly hierachical system’
(Sassen,2002;19). Therefore, the spatial relations of different localities are
determined and produced through the process of the internationalisation and
globalisation of capital flows.
Peck refers to this construction of the ‘local-global’(Swyngedouw,1997,Massey;1988)
in terms of regulation. ‘Just as neoliberalism is in effect a high politics that expressly
denies its political character (Beck,2000), so it also exists in a self-contradictory way
as a form of “metaregulation,” a rule system that paradoxically defines itself as a
form of antiregulation(Peck,2002;400). The irony of neoliberalism therefore, is the
how the process of deregulation actually regulates and shapes the local through
processes of coercion. ‘...it shapes environments, contexts and frameworks within
which political-economic and socio-institutional restructuring takes
place’(Peck,2002;400). An important example of this relation can be seen in the
constraint of neoliberalism on the localised or bottom up political action
(Peck,2002;386). In the 1990’s, removing social and environmental regulatory
standards and eroding political and institutional collectives upon which more
progressive settlements had been constructed, induced localities to compete with
one another(Peck,2002;385), thus critically undermining the potential of non
neoliberal projects at the local scale. Giving local institutions responsibility without
power was significant in terms of restructuring the space within which local actors
could mobilise themselves. Deconstructing anticompetitive institutions such as
labour unions, social-welfare programs and anti-interventionist arms of government
regimes, with the absence of a spatially redistributive extra local framework,
‘neoliberal constitution of competitive relations between localities and regions
placed real limits on the practical potential of localised or bottom up political
action’(Amin,1999).
Addressing the mutual production of the local and the global through capitalist
processes raises the issue of scale, as a means of looking beyond the material. Paasi
identifies the importance of scales in shaping practices(2004). If scales-as forms of
social practice/discourse-are the results of power relations and struggles…these
categories can thus have productive power in shaping practices and discourses in
academia, and also well beyond’(Paasi,2004;543). Orientalism provides a necessary
spatial platform from which to understand how capitalist relations construct both a
new imaginative space which in turn constructs space on the ground. Complex
spatial relations which are formed through imaginative geographies have
dramatically radicalised the relationship between different sovereign states,
strengthening the concept of ‘other’. ‘After 9/11 we were all in some sense both
New Yorkers and Palestinians’ (Gregory,2008). Graham argues that it is through the
experience of war that the dialectic place attachment is mobilised, fuelling an
understanding of what is ours and what is not. These two conceptions work together
to create, ‘an unbridled sentimentality of one’s own while dehumanising the
enemy’s people and land’ (Graham,2006).
Oil has a similarly ‘imaginative’ spatial dimension. In accordance with Kapuscinski,
‘oil creates the illusion...of a completely changed life, without work, life for free...The
concept of oil expresses perfectly the eternal human dream of wealth achieved
through lucky accident...In this sense oil is a fairytale and like every fairy tale, a bit of
a lie’ (Kapuscinski,1999). Watts’s analysis of the Niger Delta provides an important
account of the way that capitalist relations construct new spatial imaginations which
manifest in the production of new ‘spaces’ within Nigeria, spaces of inequality and
complex political relations which are masked in the neoliberal agenda. An important
comparison identified by Chomsky is that of oil relations in Libya. ‘It is ironic that it is
in the interests of both the UK and the US to prevent the growth of democracy in
Libya, to prevent the demands of the people on their precious oil reserves’
(Chomsky,2011). International interests are often detached from, and yet critical in
the production of, spaces on the ground.
According to Collier, if a country had ‘no primary commodity exports its risk of
conflict would fall to only one half of a percent’ (Collier,2000). Despite identifying the
significance of oil in capitalist relations, Collier fails to engage with the complex ways
in which oil produces space at the local level. ‘Nigeria-the thirteenth largest
producer of petroleum products accounts for 80 percent of foreign exchange
earnings-provides at least 5 percent currently of US daily consumption (and over 10
percent of US imports)’(Watts,2004;1). In particular Watts identifies the important
‘international significance of Nigerian oil as articulated by the Petroluem Finance
Company (PFC) to the US Congressional International Relations Committee SubCommittee on Africa, taking particular notice of the strategic value of West African
oil whose high quality and low cost ‘sweet’ reserves-including new offshore,
deepwater discoveries which all demanded substantial foreign
investment’(Watts,2004;1).
‘The presence and activities of the oil companies as part of the oil complex,
constitute a challenge to customary forms of community authority, inter-ethnic
relations and local state institutions principally through the property and land
disputes that are engendered, via forms of popular mobilisation and agitation’
(Watts,2004;54). For Watts, the insertion of centralised oil revenues (unearned
income) into the Nigerian political economy constructs new forms of governable
space(Watts,2004). ‘Each governable space is the product of the oil complex and
petro-capitalism, but these spaces curiously work against each other’
(Watts,2004;54). This can be identified both at the level of the nation state, and also
at the level of civil society.
In 1973, (post oil boom), black gold became both the fiscal and material foundation
for modernisation and autocratic state led development, and oil production in
Nigeria became the project of ’16 oil majors bound by joint operating agreements to
determine the distribution of royalties and rents’ (Watts,2004;60). Watts identifies
four features of this political economy of oil which both mask in the international
sphere and have produced on the ground, three distinct ‘governable spaces’ in the
Niger Delta. Oil capitalism operates through a statutory monopoly over mineral
exploitation, a nationalised oil company, the security apparatuses of the state, and
finally, an institution mechanism by which federal oil revenues are distributed
(Watts,2004;60).
The consequences of this vast unearned income flowing to the federal exchequer,
was the centralisation of the state, ‘rendering the unity of capitalism and modernity,
and the process of state building’(Watts,2004;61). However, these centralised oil
revenues flowed into weak institutions and a charged, volatile federal system
produced an undisciplined, corrupt and flabby oil-led development that was to
fragment, pulverise and disintegrate the state’ (Watts,2004;61). The three spaces
produced, according to Watts(2004)are, spaces of chieftainship, spaces of
indegeneity, and the space of the nation state.
The space of chieftainship reflects how the combination of youth-driven violence
and intense political competition has transformed a system of governance
(Watts,2004). The Nembe community stands at the point of oil production, thus
when the large and rich Nembe oil fields were opened, through the imaginary
process of ‘creating an illusion to which people aspired’, extraordinary violence and
inter-ethnic conflict broke out among local people in pursuit of control over their
own oil reserves inducing them to break down the power of the chieftainship
(Watts,2004;62).
The space of indigeneity reveals how, the Ibo majority in the Eastern region, has
been home to a great deal of inter-ethnic dispute. The Ogoni have seen a large
number of conflicts within the Delta region which Watts suggests are largely a result
of the slave trade (2004). These conflicts each reflect complex struggles for identity,
which as the analysis of spaces of chieftainship identify, are often re-structured and
confused as new alliances are made between local, clan and family loyalties
(Watts,2004). Such pre-existing tensions when coupled with a fight over natural
resources such as oil, lead to a people who are fighting for the space to assert an
identity which is already deemed unstable and weakened by the overwhelming
awareness of exploitation by large scale oil industries.
Finally, the space of nationalism. Oil was integral to the process of nation building
and remains as such today. Not only is it integral, but it is also a national resource
upon which citizenship claims can be constructed. Conceptually, ‘communities use
oil wealth to activate community claims on what is seen properly as unimaginable
wealth-Black Gold’ (Watts,2004). It is therefore through this process of making
claims on ‘things’, in this case, oil, that the governable space of Nigeria as a nation is
established. Interestingly, it has been argued that the transformation into this
particular space of nationalism has caused ‘the ‘Nigerian symbolic’ to grow weaker
as a result of the political economy of oil(Watts,2004).
‘Oil has been a sort of idiom in which new social forces are unleashed, overturning
traditional power structures and in some cases generating violent conflict, albeit
along a series of rather different vectors (age, class, ethnicity, and so
on)’(Watts,2004). An important criticism of Ross and Collier is that both authors tend
to steadfastly ignore how oil’s contribution to war or authoritarianism builds upon
pre existing (pre-oil) political dynamics(Watts,2004). Although they are not wrong to
identify how oil can and does generate rents, enhance the military and security
budget, and may generate limited employment and linkage effects (Ross and
Collier,2003), the political spaces that emerge from ‘the oil complex’ are spatially
heterogenous and not readily encompassed by the idea of predation, looting or
rebellion (Watts,2004).
A poor understanding of spatial complexities leads to policy that fails to address
inequality and marginalisation. Harvey’s theory of the ‘spatial fix’ exposes the reality
that the capitalist system is inherently spatial. Sassen’s analysis of the growth of
global cities provides an important materiality to underpin Harvey’s theoretical
analysis; identifying the ways in which spatial processes can be beneficial in terms of
agglomeration of services and resources, whilst producing spaces of exclusion, as
identified by Peck. Peck’s exposition of how the local and the global are mutually
produced through complex global processes redresses the binary assumptions of
neoclassical theory. A spatially heterodox critique of this assumption redresses the
inherent flaws in the neoliberal project which often perceive space as a ‘fixing’
mechanism, whilst exposing how capitalism constructs damaging ‘imaginaries’ and
the exacerbation of political tensions. Policy which makes binary assumptions about
the local and the global, and nature and society, (for example, perceiving oil as a fast
means to growth) can never identify and therefore meet the needs, of the
marginalised. Unless growth is the only answer, which as this essay has advocated, it
is not, then spatiality is critical. Space must be understood in terms of a process
which plays on pre-existing dynamics, as well as producing new imaginaries.
Reproducing the neoliberal agenda, without engaging holistically with space, will
never be productive.
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