This article addresses issues facing Canadian literacy researchers who are working in global contexts and particularly the potential complications that arise when research conducted in developing countries is funded by sources such as international aid institutions, foreign governments, non-governmental organizations, and donor-based organizations. We focus especially on the issue of development of local research capacity and expansion of the knowledge economy. We first create a framework by

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... cribing the types of literacy projects funded by alternatives to the standard research grants of government agencies. We next review tensions that can arise between researchers and these types of funding organizations. We then turn to examples of current Canadian literacy research carried out in developing countries that provide guidance in designing, conducting, and publishing locally-empowering and globally-connected research.