Colonial Legacies and Economic Development: A Comparative Study of Egypt and Pakistan

This thesis argues that colonialism should not be viewed solely as a historical phenomenon but rather as an adaptive policy framework that continues to shape global relations and the developmental trajectories of post-colonial countries. Although formal colonial empires have largely dissolved, colonial practices persist through the influence of international financial institutions, which impose economic policies and structural adjustments that compromise the sovereignty of developing countries. I argue that sovereignty and development are fundamentally interconnected. This framework draws on Sen's (1999) notion that development must be understood not only as economic growth but also as a process of expanding freedoms and capabilities, placing sovereignty at the center of any developmental progress. I rely on Bhambra's (2020) argument that colonialism was not just a historical episode but a foundational aspect of the modern global economy, influencing trade, labor, and resource extraction patterns. In other words, colonialism was not a peripheral factor but central to the development of capitalism, and the global economy is fundamentally structured around a system of perpetual debt. In this thesis, I use Egypt and Pakistan as comparative case studies and argue that the institutional development during the colonial period was weak, as both Egypt and colonial India (later Pakistan) were extractive colonies. The post-independence era, following the establishment of the Bretton Woods system, marked the onset of a new world order with the creation of global institutions, such as the IMF. Colonialism, through weak institutional development during the colonial period, created a dependency on these international financial institutions for a constant inflow of loans. These loans are attached with conditionalities and structural adjustment programs that subvert a country's autonomy and ability to set its own monetary and fiscal policies. By examining how global financial systems impose conditionalities that limit the economic agency of developing countries, I argue that international financial governance reflects colonial power dynamics in a new form and restricts development.