Certainly not a Micro Debate

I just came across a vigorous discussion that took place recently on the Ohio State Ag Econ listserve (which I have failed in trying to subscribe to). The discussion stems from a recent Foreign Policy article, “How Microfinance Changes the Lives of Millions” by Shweta Banerjee, and from Milford Bateman who wrote a much discussed op-ed on microfinance last year in the Financial Times. You can get the meat of the discussion here and here, in which Bateman argues vociferously against microfinance in light of negligible evidence that microfinance reduces poverty. He points instead to the rapid growth of South Korea, China, Vietnam, and Malaysia that channeled resources into SME growth rather than into the financial system, and particularly microfinance, as India and Bangladesh have tended to do. Definitely worth the read. My takeaways: microfinance is not a panacea (which I think most in the sector have come to recognize already), and more vigorous research is needed. I’m particularly interested in what will come from research into microfinance “plus,” which will hopefully support Banerjee’s plea not to abandon micro for macro…just yet.

For more interesting links:
- A breathtaking photojournalism essay by Jonas Bendiksen who spent six weeks in the slums of Nairobi, Caracas, Mumbai and Jakarta.
- A recent study by Rema Hanna and Leigh Linden finds caste-based discrimination in grading practices. Interestingly, much of the discrimination was driven by low-caste teachers rather than the opposite.
- Last month, David Roodman posted “Kiva Is Not Quite What It Seems” which has since led to a reply by Matthew Flannery, CEO of Kiva, a revamping of their website, 10,000 hits to Roodman's original post, and a panoply of discussion elsewhere.