David Roodman's Microfinance Open Book Blog

 

Posts in: 8. Development as Industry Building

 

Chapter 8 Updated

April 19th, 2011

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No chapter draft looked more archaic in my rewriting pass than that of chapter 8. When I wrote it a year ago, India was on “everyone’s watch list.” It’s come off those lists now.

So I added Andhra Pradesh to the review of recent crises. The new version (.docx and .pdf) further develops the ecological metaphor in the first version in the attempt to articulate when creative destruction is more creative than destructive. Before, I distinguished between growth and development. Growth, in credit for example, can be developmental, but this is not automatic. Now I also develop the idea that a species or a firm most enriches the system of which it is part when it connects to other actors in diverse ways. MFIs are more developmental when they take capital from diverse sources (more or less motivated by profit) and when they connect to clients with multiple services—savings as well as credit. One inspiration for me was Beth Rhyne’s analysis of what went wrong in Andhra Pradesh. Older text about the multiple roles of the conventional financial system is integrated here.

I also updated all the figures and tables, except Table 2, which I am still working on. I reorganized a bit. And I dropped what I now feel was some gratuitous negativity: harping on the point that microfinance does not play the same transformational role as conventional finance because its clients are rarely Schumpeterian heroes of creative destruction.

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Chapter 8: Development as Industry Building

March 8th, 2010

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At 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.
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