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Month: May 2010

Why Government Microfinance Doesn't Work

Why Government Microfinance Doesn't Work

One of the reasons a lot of people find microfinance attractive is that it is a fundamentally capitalist approach to economic development.  Done right, it can be sustainable and even profitable.  By focusing on a social mission, successful microfinance institutions (MFIs) can reach more clients by leveraging capital, similar to commercial bank.  And just like the Ice Queen warns in Atlas Shrugged, government intervention in capitalist programs spells disaster.  Whether or not this is true for other industries (it’s not),…

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The "Entrepreneur Myth" Myth

The "Entrepreneur Myth" Myth

Muhammad Yunus, the godfather of microfinance, contends that everyone is an entrepreneur.  And microfinance is about individual economic empowerment, built on the premise that credit is both a human right and a path to economic freedom.  This reading has been distorted by those who talk about the “entrepreneur myth,” which says that microfinance romanticizes the poor by pushing a false by-your-bootstraps narrative.  This narrative, in turn, undermines development by giving the poor something they don’t want – credit for a…

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Filler: Links of the Week

Filler: Links of the Week

Maintaining a self-described journal of economics and development is not easy work, particularly for someone such as myself who knows little about either subject and is engaged in a Madoff-esque Ponzi scheme of information, feeding you, the reader, the bare minimum required to appear legitimate, all the while stalling until I can glean a few more obvious and redundant points from the thinkers and load them into my plagiarism machine, which spits out stolen, yet relatively untraceable, drivel.  In my…

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Competition, Saturation, Interest Rates, and Microfinance

Competition, Saturation, Interest Rates, and Microfinance

CGAP, the World Bank’s microfinance arm, turns 15 this year, having been formed ten years prior to Muhammad Yunus winning the Nobel Peace Prize.  In commemoration, Alexis LaTortue, the CEO of CGAP, wrote a summary of the state of the industry and the key transformations that have occurred over the last decade and a half.  There is a lot of to unpack for a 500-word article, but I want address one point in particular that I found interesting: More institutions…

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The Movers vs. The Shakers: The Microfinance Debate

The Movers vs. The Shakers: The Microfinance Debate

In the noisy echo chamber of the development community, there are a lot of arguments for (emphatically) and for (tentatively) microfinance as a tool of poverty.  The debate surrounds a series of experimental studies questioning the impact of microfinance in achieving its stated goals – specifically, empowerment of women and poverty alleviation.  The participants are the critics and the practitioners.  The practitioners tend to dismiss the critics as having blind faith in statistics and either ignoring or being ignorant to…

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Dirty Politics: The Philippine Elections

Dirty Politics: The Philippine Elections

This is a campaign poster found plastered on a wall on the side of the road somewhere in Bacolod.  It shows Benigno “Noynoy” Aquino, the current frontrunner for president in the Philippines election, with Andal Ampatuan Jr., perpetrator of the worst election massacre in the history of the Philippines.  Above their pictures is the phrase “Patay Tayo Dyan!” – “We’re dead meat!”  Of course, they are not actually running together, but it is a good campaign trick for his opponents. …

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China and Poverty Alleviation: The Case for a Strongman

China and Poverty Alleviation: The Case for a Strongman

On Monday, the Philippines will hold a national election.  It is the first time the country will be using an automatic voting system, and nobody knows what is going to happen.  It seems appropriate to include this post before the election is over.  For more on the candidates, check out this BBC News primer. Over the last four decades, the economic landscape in Southeast and East Asia has shifted.  After World War II, the Philippines had the second largest economy…

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A New Way Forward on Global Development

A New Way Forward on Global Development

The Obama Administration recognizes that the successful pursuit of development is essential to our security, prosperity, and values.  In a world shaped by growing global economic integration and the fragmentation of political power; by the rise of emerging powers and the persistent weakness of fragile states; and the potential borne of globalization and risks posed by transnational threats, development is a strategic imperative to the United States.  Our investments in development – and the policies we pursue that support development…

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Beard Update #3

Beard Update #3

There is an old adage that April showers bring May flowers.  But flowers are not the only things growing in May.  Not having a razor in April brings explosive, unchecked growth in Josh Weinstein’s beard.  Not much has changed since my last update.  The follicles surrounding my sole patch are still playing hard to get, despite fertilizing the badlands with some Filipino Rogaine (called Regroe), which I’m also using to stave off the grim realities of my hereditary future.  When…

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Industrial Agriculture and Solutions to World Hunger

Industrial Agriculture and Solutions to World Hunger

In this essay, the author discusses the right approach to combating the problem of hunger – an attribute shared by closed to 900 million people worldwide.  He takes issue with the arugula-eating liberal elites, like Food First, a California-based organization that opposes the technological advancements of the Green Revolution.   Modern improvements in agricultural technology and sciences create higher crop yields.  When land ownership is limited to a few hectares, it is critical to maximize the output on these small plots, …

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