The President announced today the 16 recipients of the 2009 Presidential Medal of Freedom, America’s highest civilan honor. The President praised the recipients for breaking down barriers and lifting up their fellow citizens: "These outstanding men and women represent an incredible diversity of backgrounds. Their tremendous accomplishments span fields from science to sports, from fine arts to foreign affairs. Yet they share one overarching trait: Each has been an agent of change.
CGD Policy Blogs
Think of microcredit as you read John Kenneth Galbraith, who wrote that financial euphorias share common denominators:
This is of no slight practical importance; recognizing them, the sensible person or institution is or should be warned. And perhaps some will be. But...the chances are not great, for built into the speculative episode is the euphoria, the mass escape from reality, that excludes any serious contemplation of the true nature of what is taking place.
It's been a tough season for the proposition that "microfinance is a proven and cost-effective tool to help the very poor lift themselves out of poverty and improve the lives of their families." In May came a randomized trial of microcredit in Hyderabad finding no impacts on poverty 15--18 months out.
In my writing now, I am sorting through lines of thought on how microlender behavior enhances or reduces the freedom of poor borrowers---freedom in Amartya Sen's definition, as agency in one's own life. The oldest strand here is that of "usury," the idea that charging interest above some level (maybe zero) is unjust, akin to the full-bellied selling food to the starving for a profit. As you probably know, the Compartamos IPO revived within the microfinance world the ancient debate over usury.
A friend of mine who runs the evaluation division of the U.S. government's Department of Housing and Urban Development once pointed me to a clever 1987 article by sociologist Peter H. Rossi, who distilled years of experience evaluating social programs into a few simple "metallic laws":
A theme I have hardly blogged is what the business perspective teaches us about how microfinance does and can work. A few years ago ABN AMRO commissioned CGD to write a report on why some microfinance institutions (MFIs), including non-profits, manage to cover costs, attract capital, and grow to serve more people---in a phrase, to succeed as businesses. Chapter 5 of the book (draft due soon) is based on that paper. Having worked this seam already, I think about it less now.
I know just enough about graphical presentation of data to be dangerous, having taken Edward Tufte's one-day course last fall. (If you ever present numbers to other people on two-dimensional surfaces, you must read his classic Visual Display of Quantitative Information.) I see his influence in the new
beta site of the MIX Market, which is the premier aggregator of data on funders and providers of microfinance.