A literature review of the impact of microfinance
We may only just have seen new studies looking at the impact of microfinance. But the topic is not new. This literature review presents a short selection of studies on microfinance, its context, and its impact on the poor.
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Contrary to popular belief the reach of microfinance in India remains limited. Both market and policy reforms are necessary in order to correct this, expand microcredit, and sustain it through deposit growth. The resulting industry and policy moves may prove important for other countries on a similar trajectory.
Microfinance seems to be about smoothing consumption and expenditure patterns. By protecting the poor from catastrophic loss, however, microfinance by definition prevents customers from slipping into an abyss of poverty that they cannot hope to climb out of.
Education
Proponents of the OLPC assert that it is “changing education”, transforming students into self-learners, and making “discussions about whether to have computers in the classroom” obsolete. But in a world where schools still struggle to have a building and a blackboard, surely such enthusiasm is overstated.
The state of the US primary education system has important lessons for Indian policymakers. India’s goal should be to decouple educational performance from socioeconomic background. But this requires treating the problem of access to, not just quality of, education.
Politics
The WSJ argues that climate litigation is both frivolous, anti-business, and sets and a dangerous precedent leading to an anarchic world. Yet, a long history of litigation suggests that society is better for it. Despite the costs involved, the principle should simply be to let the truth prevail.
Prime Minister Manmohan Singh decided to embrace Pakistan in Egypt, saying dialogue is the only way forward. He renders us weak for future negotiations and ignores that Pakistan does not want peace. He should remember that if you want peace, prepare for war.
Environment
The WSJ argues that climate litigation is both frivolous, anti-business, and sets and a dangerous precedent leading to an anarchic world. Yet, a long history of litigation suggests that society is better for it. Despite the costs involved, the principle should simply be to let the truth prevail.
The Indian Solar Mission is an example of a developing country attempting to decouple growth from carbon emissions. But if developed countries want concerted action on climate change it is time they put their money where their mouth is. Then we can start defining a post-Kyoto framework.
Health
Health policy and practice continue to be key issues on the development agenda. A short introduction to Global Health Ideas – a blog that has been following changes in that agenda and now has a new home.
Google Flu Trends generated excitement on the possibilities of tracking and predicting disease outbreaks. But the swine flu outbreak illustrates key limitations of this methodology, and also areas where it could be enhanced.
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The Discomfort Zone is an online magazine presenting critical and objective opinion and analysis on issues pertinent to the developing world and to international development. It brings forth a global perspective to question the policy and practice of development.
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Microsavings seem to do much the same for the poor as microcredit (i.e. smooth consumption and investment). But they might do so at a lower cost, and bring additional benefits as well.
The failure in microfinance has been that it has for too long believed in its own rhetoric of poverty alleviation. Now that research proves otherwise, the debate is no longer about what impact microfinance has on society, but how society can use microfinance as a business.
The WSJ argues that climate litigation is both frivolous, anti-business, and sets and a dangerous precedent leading to an anarchic world. Yet, a long history of litigation suggests that society is better for it. Despite the costs involved, the principle should simply be to let the truth prevail.
Here is another lesson to be drawn from the experience of the OLPC XO series. Don’t take Nicholas Negroponte seriously. Even he doesn’t.
Proponents of the OLPC assert that it is “changing education”, transforming students into self-learners, and making “discussions about whether to have computers in the classroom” obsolete. But in a world where schools still struggle to have a building and a blackboard, surely such enthusiasm is overstated.
Investors in the stock market know they can both loose and gain money. Entrepreneurs accept the same principle when setting up companies. Why should executives be different? To make compensation work and be fair, bonuses for good performance should be matched by actual penalties for poor performance.
