NGO's as Shadow States

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Soumya Mishra:

"Inside, as well as outside of the village, microfinance NGOs’ power in Bangladesh should not be underestimated. Karim provides evidence to show the rise of the NGOs as a shadow state, providing and controlling important public services like health, education and credit. The preference of Western donors for channelling their money through the networks of such NGOs has caused a bitter rivalry between the government and the NGO sector. The recent incident when Hillary Clinton employed diplomatic pressure on Sheikh Hasina’s democratically elected government to drop charges against Muhammad Yunus, founder of the Grammen Bank, is a case in point.

Karim highlights the conflict of interest arising in MFI-sponsored research, as researchers can rarely criticize “their” institution’s practices. The good will and obligations that exist in the social relationships between MFI leaders, bureaucrats and the educated elite make a critique of microfinance generally socially unacceptable. Karim criticizes the construction of a hegemonic and technocratic discourse over poverty research led by the NGO community.

She describes two forms of researchers working with the NGOs: one which is lesser “qualified”, yet more knowledgeable in the field, and another which is more “qualified” (with degrees from British and American universities) and apt at writing assessments, despite having little or no local knowledge and field experience. According to Karim, this discourse structure is reinforced by the nexus of NGOs, bureaucrats and English-language educated elites. They meet in seminars and conferences on poverty research, carried out in English, rendering microfinance inaccessible for critical scrutiny by the lay population. She likens the NGOs to “epistemic machines”. The author claims that vernacular critique of the NGO does exist, but remains overshadowed by the large body of NGO, donor and uncritical scholarly literature." (


Soumya discusses the following book:

  • Lamia Karim, 2011: Microfinance and Its Discontents: Women in Debt in Bangladesh. Minneapolis: University of Minnesota Press.