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Independent research & practical ideas for global prosperity
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Independent research & practical ideas for global prosperity
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March 19, 2010Weekly Tweets for 2010-03-19By David Roodman
Comment »March 18, 2010As a Matter of Policy, Put Policies to the Experimental TestBy David RoodmanColumnist Tim Harford in today’s Financial Times (free with registration, I think):
What I like about this column is that Harford does not allow himself to become bogged down in the quagmire questions about what randomized controlled trials (RCTs) can and can’t tell us. That has been my focus as I have worked to understand what we know about the impacts of microfinance. He takes RCTs’ superiority as given (where they are practical) and proceeds to a moral call: those who advise and make policy on everything from education to child rearing should institutionalize experimentation. That, in order to support vital societal learning about what helps children learn math, say, what causes breast cancer, or whether sleeping face down kills babies. Comment »March 16, 2010Cross-post: Truthiness and Justiness at the Haiti Debt HearingBy David RoodmanFor devout followers of Roodman Thought, another curmudgeonly post on Views from the Center about debt relief for Haiti. I used video in a new way, as you’ll see. Comment »March 12, 2010Weekly Tweets for 2010-03-12By David Roodman
Comment »March 11, 2010Cross-post: What We Talk About When We Talk About DevelopmentBy David RoodmanOn CGD’s main blog, I just wrote about one big idea that has come out of my work on microfinance, which is the value of systematically enunciating different conceptions of “development” and then measuring a given intervention against them. This device has been essential for in gaining a conceptual command of microfinance. I wonder about its broader applicability. Comment »March 11, 2010A Little More History on Pearl and GrameenBy David RoodmanRecently I received this interesting letter, shared with permission. It adds background to my post on Pearl, Yunus, and History:
Comment »March 11, 2010Rhetorical Blast from My PastBy David RoodmanYesterday, I mentioned the 2007 report Role Reversal by Julie Abrams and Damian von Stauffenberg. The report made a big splash, with coverage in the Economist and an online debate on the Microfinance Gateway. It argued that international financial institutions such as the EBRD and IFC were crowding private investors out of what was properly their space in microfinance, and preventing the commercialization of the industry. As I blogged yesterday, the recent microcredit financial crises renew the relevance of the issues raised by that report. Just starting to find my way in the field, I made one contribution to the online debate. I recently reread it and liked it more than I expected. It was nice to see my promise, and how I have grown since. See what you think: Comment »March 10, 2010Too Much Finance for MicrofinanceBy David Roodman
That’s me reviewing Daly’s Beyond Growth in World Watch magazine in 1997. (Funny, I spotted Lovins in the Brookings cafeteria last month. Took me a while to place him.) My thoughts turned to Daly as I finished chapter 8 and digested two excellent new CGAP reports (here and here) and an Indian newspaper article on the growth and prospects of the microfinance industry. 2 Comments »March 10, 2010Grameen Bank Delinquency UpdateBy David RoodmanLast month I blogged rising loan delinquency at the Grameen Bank. Here’s an update. I have twice e-mailed Grameen Bank’s Chief Financial Officer, Md. Shahjahan, the first time four weeks ago, hoping to learn more about what is behind the numbers. I also sent a message to Professor Yunus. I have received no reply. The Bank just released its February numbers. Here’s an update of an earlier graph: The spreadsheet is still here. 1 Comment »March 9, 2010Robin Hood Issued Collateralized Debt Obligations to the Rich and Lent to the PoorBy David RoodmanOr something like that. From A Gest of Robyn Hode, circa 1500. (Synopsis.) Hat tip to Chris Linder on MicrofinancePractice, who got it from an Indian paper, which got it from a book. My translations (caveat emptor) on the right:
6 Comments »March 8, 2010Chapter 8: Development as Industry BuildingBy David RoodmanAt long last, a new chapter (.docx and .pdf). Each time I upload a chapter it feels like I am permanently lifting a weight off my shoulders with a mighty heave. This one took so long, I doubt it is worth the wait (or weight). It is the last of the trio of chapters that evaluate microfinance from different perspectives, this one from the perspective of what I am now calling “development as industry building.” Clunky, I know. Perhaps it should be “development as transformation.” In the interest if getting this durn thing done, I have decided to drop what was to be chapter 9, on the selling of microfinance. My greatest regret is the loss of the clever title: The Effects of Causes. That means I have finally arrived at the last chapter, the new chapter 9 on overall implications. It will have sections on the potential of new technologies and the role of donors and investors. Here is the conclusion. As always, I welcome comments. Thank you, loyal critics. 3 Comments »March 5, 2010Weekly Tweets for 2010-03-05By David Roodman
Comment »March 1, 2010Meeting of the Minds? Researchers, Microfinance Leaders at CGDBy David RoodmanOn Friday afternoon, the Center for Global Development and ACCION International’s Center for Financial Inclusion convened a “roundtable” meeting of U.S.-based microfinance leaders and researchers to talk about the interactions between their two professional domains. What does the latest research tell us or not tell us about how microfinance works? What can can each group do to improve how it communicates about impacts? How can each best support the work of the other? The event was the brainchild of CFI’s Elisabeth Rhyne, and hosted at CGD. Comments were not for attribution without permission. The CEOs of ACCION, the Grameen Foundation, and Opportunity International, namely Michael Schlein, Alex Counts, and Adrian Merryman, attended, as did people from Kiva, FINCA and CHF International. All these organizations run or support microfinance programs in many countries. Proxying for the research community were Jonathan Morduch of NYU and the Financial Access Initiative, Dean Karlan of Yale (he’s also a CGD non-resident fellow), and Iqbal Dhaliwal, Director of Policy at MIT’s Poverty Action Lab. Also there were Rich Rosenberg of CGAP, who has been both a practitioner and an analyst, and my colleague Liliana Rojas-Suarez. Personally, I see the meeting as responding to the rupture created by the release last year of randomized studies of the impact of microfinance. Putting the question of whether microfinance reduces poverty on average to such a rigorous test was healthy—and impertinent. The studies found no clear effect on bottom-line indicators of household welfare, and the press unsurprisingly accentuated the negative. “Perhaps microfinance isn’t such a big deal after all” and “it looks like ‘microlending’ doesn’t actually do much to fight poverty,” ran real headlines. They posed a public relations challenge for microfinance groups, or at least for the network organizations based in the west. And I think they also forced some tough thinking within the groups about what we know about impacts and even how we should define success. The events also raised questions about whether researchers can write and talk about their work in ways that will reduce misleading coverage. For their part, researchers seem particularly interested in which questions they should study to produce the most useful knowledge for practitioners. The practical questions are what services to offer and how to target the people most likely to benefit. 13 Comments »February 26, 2010Weekly Tweets for 2010-02-26By David Roodman
Comment »February 24, 2010Help Me Name This Book!By David RoodmanOK crowd, now’s the time to really crowd-source. What do you think I should name this book? Please brainstorm by commenting below. One lesson I can offer from having named things before: ideas that sound dumb can spark brainstorms that lead to much better ideas. So don’t self-censor much. Offer more than one title. Winner gets a free autographed copy of the book. (HT John Osterman.) 26 Comments »February 24, 2010Sutoro, Ann DunhamBy David RoodmanAnother neither-her-nor-there post. Ignore the table and just read the block quote beneath. This is a page in Paul Mosley’s case study of microfinance in Indonesia, in volume 2 of Finance against Poverty (1996): This looks like a classic example of a biased impact study. But that’s not my point. Full cite: Sutoro, Ann Dunham; Roes Haryanto. (1990). “KUPEDES Development Impact Survey”. BRI Briefing Booklet (Jakarta). When Sutoro wrote this, her son Barack was studying at Harvard Law School. Anyone know how I can get a copy? 1 Comment »February 23, 2010Pearl, Yunus, and HistoryBy David RoodmanWhen I blogged rising delinquency at the Grameen Bank, I referred to Yunus’s public response to the Wall Street Journal exposé, but couldn’t find it online anymore. I just found it. Grameen removed it from its website, but the Wayback Machine saved it! I won’t try to summarize or analyze it. Grameen created a veritable subsite on the WSJ article, posting copies of e-mail Q&A’s between Pearl and Yunus, the rest of their e-mail correspondence, Yunus’s public response, Yunus’s correspondence with a “Friend” (must be Sam Daley-Harris), graphs, and more. Somebody independent must someday write a history of the Grameen Bank, and when she does, this will be prime material. It is poignant in retrospect: the correspondence brackets 9/11 and there are mentions of Pearl’s wife perhaps days before she became pregnant with a son who, we know, would never meet his father. It gives us Yunus more intimate than usual. We see him wrangling with tough questions about the Bank’s sustainability and taking pride in the transformation underway at the institution. If you like immersing yourself in primary sources, this is for you. Comment »February 19, 2010Weekly Tweets for 2010-02-19By David Roodman
Comment »February 16, 2010Happy Blogiversary to MeBy David RoodmanCGD launched this blog a year ago today. I titled the first post Help me write this book. Thank you to all who have done just that by commenting on posts or contacting me outside the blog. You have pointed me to things to read and people to talk to, caught mistakes, and provided feedback on what is interesting or unconvincing. I am grateful for your help. Birthdays can be occasions for reflection, if not so often first birthdays. Thinking back over the last year does put me in a contemplative mood. Blogging has turned out to be one of the most meaningful things I have done in my career. I recommend it, though not for everyone. If maturation is change as well as discovery and acceptance of what one already is, then blogging for me as been a path to greater maturity. I have found a new public voice, or developed more confidence in the one I already had, or some blend of the two. 8 Comments »February 13, 2010Prediction is very difficult, especially about the future—Niels BohrBy David Roodman
That’s Md. Hasan Khaled writing in the apparently short-lived journal of the PKSF, a World Bank–financed institution that lends wholesale to microcreditors in Bangladesh and performs some oversight of them. He wrote that in 1998. (For context, see this and this.) 1 Comment »February 12, 2010The Quantum Mechanics of Multiple BorrowingBy David RoodmanIn the strange world of quantum mechanics, a thing is everywhere until you look at it. I don’t mean that it could be anywhere. It is everywhere. An electron in your fingernail possesses a probability distribution that represents how likely it is to be in any given place once observed. Nearly all the probability, but not quite all, is concentrated in a tiny volume around some atomic nucleus. Observing an electron with laboratory tools localizes it. Its probability distribution collapses to a singularity. In the universe as we understand it, observation does not merely remove uncertainty. It changes that which is observed. So it is with lending. Lenders carry outstanding loans on their books as assets. They discount the loans according to certain norms and rules to reflect the likelihood that not all will be repaid. But no ones really knows the value of an IOU until it comes time to collect. Things are particularly uncertain when several lenders are making loans to the same people at the same time (multiple borrowing). The borrowers may being using one creditor’s loans to pay off another’s, unable to ever climb out of debt. Yet each lender carries its loans at face value. Things are murkier still when lenders do not (or cannot) share information about borrowers, such as through a credit bureau. Then no lender knows how much each borrower owes. 8 Comments »February 12, 2010Weekly Tweets for 2010-02-12By David Roodman
Comment »February 9, 2010Grameen Bank, Which Pioneered Loans For the Poor, Has Hit a Repayment SnagBy David RoodmanAs I blogged before, one of the last articles Daniel Pearl wrote for the Wall Street Journal before he was abducted and murdered—coauthored with Michael Phillips—exposed financial woes at the Grameen Bank. Appearing on page 1 on November 27, 2001, under the headline Grameen Bank, Which Pioneered Loans For the Poor, Has Hit a Repayment Snag, the piece described how some Bangladeshis were juggling loans from several microcreditors at once, how others had banded together to protest and resist the Bank’s policies, and how the Bank’s loose accounting standards and slow disclosure hid a decline in loan repayments. This post shares new data that suggest that history is repeating itself in important ways. The Grameen Bank, indeed all big microcreditors in Bangladesh, may be finding it harder to collect on their loans. As far as the evidence goes, there has been no epidemic of default. But the combination of years of rapid growth and accelerating declines in key indicators of delinquency are so reminiscent of the lead-up to the global financial crisis that the broad implications hardly need explaining. A partial meltdown in the Mecca of microcredit would not sow the same economic destruction—microfinance is not the heart of Bangladesh’s economy in Schumpeter’s sense—but it could have lasting implications for microcredit worldwide. 19 Comments »February 5, 2010Weekly Tweets for 2010-02-05By David Roodman
Comment »February 3, 2010Charting GrowthBy David RoodmanAfter being waylaid by work on Haiti, I am back to toiling on chapter 8. One section surveys the commercialization of microfinance and the financing of microfinance. Unlike most of the book, it is rich in figures and tables. Here I share them with you. I’d appreciate suggestions of what to change, drop, or add. What is confusing? Two disclaimers: My purpose here is to document trends without assuming that up is always good or always bad. And I should be able to add another year of data soon. For me, the last display is most interesting. Number of borrowers, 20 largest microfinance institutions of 2007 5 Comments » |
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