Digital Archive....

The True True Size of Africa Global Development: Views from the Center By Nancy Birdsall - The Economist has a nice piece here on the True Size of Africa. It's about geographic size (Africa is bigger than you think – which is true for all countries and regions near the equator that don't benefit from the Mercator distortion in our two-dimensional map world). Here's a copy of my comment posted there: [...] Sent with Reeder  

The collapse of the Indian microfinance sector? Financial Access Initiative Blog There is a good and a bad way to make the cover of the the New York Times, and yesterday's article on the potential collapse of the Indian microfinance sector was not the good way. But we're happy the Times is paying attention. We've also been tracking the recent developments in India and you can read our take on the FAI blog , in Forbes India and the Harvard Business Review . Sent with Reeder  

Apart from aid, how are we doing? Owen abroad I don't think it is possible to determine statistically whether aid makes a lot of difference to how quickly a country develops. But there is a very good case for aid on different grounds: that it enables people to live better lives in the meantime. Though the effects of aid on development are uncertain, there is a huge amount that industrialised countries can do – or not do – which affects how quickly countries develop.  The policies of rich countries on trade, investment, migration, the environment, security and technology can make a huge impact on how quickly poor countries are able to develop. Yet we tend to judge industrialized countries too much according to how much aid they give, and too little to how they behave in all these other ways. The Center for Global Development provides an essential service by ranking the rich each year so we can see how we are doing.  They use a series of quantitative m...

The Day After Tomorrow: The Final Battle in the War Against Poverty Growth and Crisis - Building Capacity through Rethinking Development Marcelo Giugale This is the third in a series of blogs where we take a look at the issues and the countries that will be at the forefront of the development agenda, not now, not next year, but over the next 2 to 5 years—thus, "after tomorrow" 1 . There is now a budding consensus on what reduces poverty: it is read more Sent with Reeder  

Redefining the measurement of poverty Development Horizons from Lawrence Haddad If access to money is not the sole determinant of the things that comprise "development" how can its absence (as in below a $1.25 a day threshold) be the sole determinant of a lack of development? Of course, despite the widespread use of the $1.25 and $2 a day measures, few people think a lack of money is the sole determinant of poverty. Some material things that are important for poverty avoidance cannot be purchased because markets don't exist for them or state provision is not responsive in a legitimate way to increased household income. Just as problematically for the $ measure, some things –such as freedom, dignity, and respect--cannot be purchased. A major advance has been made in addressing the first of these issues by Sabina Alkire and the OPHI team with their new Multidimensional Poverty Index . I was fortunate enough to be a commentator at a panel on th...

The Massive Microcredit Implosion in Andhra Pradesh Daily Is Out! David Roodman's Microfinance Open Book Blog By David Roodman - Daniel Rozas warns that investors in Indian microfinance could lose a lot of money. Building on his earlier work on bankruptcies among microcreditors, he discusses how to prepare for failure: The crisis in Andhra Pradesh has highlighted how exposed MFIs are to mass non-payments. Industry insiders have suggested that even some of the largest MFIs [...] Sent with Reeder  

True Confessions: I'm still unable to conclude whether aid does more harm than good Aid Watch Margaret Wente  in Toronto Globe and Mail perceives a growing backlash against humanitarian aid, that it may be doing more harm than good in Africa (she concentrates on seemingly everyone's (including ours) recent favorite example of Ethiopia). I'm quoted in the article accurately. Contrary to some perceptions (not in Wente's article) however, I have never made a general argument that aid does more harm than good, or called for aid to be abolished or even cut. I said aid "has done so much ill and so little good" in the subtitle to the White Man's Burden. The "ill" is well covered in Margaret Wente's column and is similar to the recent posts on this blog about aid financing autocrats and political repression, with similar examples in my book.  However, I have also given examples of aid successes, particularly in health (vac...

Millennium Villages: Moving the goalposts Aid Watch Here on the blog, we've been following the progress of the Millennium Villages Project, a joint effort from the UN and Columbia's Earth Institute that has introduced a package of development interventions in health, education, agriculture and infrastructure into 14 "clusters" of villages throughout 10 African countries. In response to a critical paper by Michael Clemens and Gabriel Demombynes , the MVP architects published a statement last week that they said would "clarify" some "basic misunderstandings" about the project. This statement caught our attention because—I would argue—what it is actually doing is seeking to reframe the debate about the project, and redefining project success in different, less ambitious terms. "The primary aim " of the project, the MVP architects write, "is to achieve the Millennium Development Goals in the Project sites, a...

The myth of Ethiopia's "natural" disasters Aid Watch As Amartya Sen has shown, famines in our times are not true natural disasters, but more often the consequence of bad governments and their bad policies. Revisiting the era of Live Aid for a book review in The New Republic , David Rieff gives evidence of how the Ethiopian famine was framed as a natural disaster rather than a political one, so as not to "complicate" the picture for viewers: … Michael Buerk's first BBC report from the famine zone opened with the words, "Dawn, and as the sun breaks through the piercing chill of night on the plains outside Korem, it lights up a biblical famine, now, in the twentieth century." Apart from the facts that it was dawn and there was a famine, nothing in what Buerk said was right. It was precisely not a biblical famine, in the locusts/great flood/visitation-from-God sense that Buerk was evoking. It was, rather, a man-made famine—...

Corruption in Kenya Africa Can... - End Poverty On October 26, we learned that Kenya's rank in Transparency Interational's  Corruption Perceptions Index dropped seven places since 2009 .  Kenya now ranks 154 out of 178 countries—well below most of its EAC neighbors.  But how bad is it, in fact?  Will the new Constitution do anything to make the situation better? In Kenya, no one seriously doubts that corruption is a key constraint to greater growth and prosperity.  Corruption comes in two forms.  Petty corruption occurs when citizens are asked for kitu kidogo ("a little something"):  to get a document stamped, a service provided, or an infraction overlooked.  The amounts are small, but hardly petty to the many victims living on less than $1 a day.  Kenya also has large-scale corruption—public purchases made at inflated prices; public benefits handed out to people who are not entitled; fictitious companies being paid for contracts that they...

Just give the poor cash? Chris Blattman Ought we to help hungry households with cash or with food? Evidence on consumption and nutrition from a randomized control trial in Mexico: households do not indulge in the consumption of vices when handed cash. Furthermore, there is little evidence that the in-kind food transfer induced more food to be consumed than did an equal-valued cash transfer. the in-kind basket contained 10 individual items, and these transfers indeed altered the types of food consumed for some households. While this distorting effect of in-kind transfers must be a motivation for paternalism, households receiving cash consumed different, but equally nutritious foods. Finally, there were few differences in child nutritional intakes, and no differences in child height, weight, sickness, or anemia prevalence. Full paper here . There might be other rationales for sending food over cash. I remember Lant Pritchett describing the decision to dis...

The future of African economic development? Chris Blattman With respect to the destination of Ethiopia’s exports, some surprising shifts are taking place. Switzerland has (just barely) surpassed China as the top destination for Ethiopia‟s exports. In what is probably the start of a longer-term trend, neighboring and regional countries are increasingly among the largest buyers of Ethiopian goods: Somalia and Sudan, for example, are both now individually larger export markets for Ethiopia than is the U.S. or Italy or Great Britain. From Access Capital’s latest report on Ethiopia . Regional trade is almost certainly underplayed in most development plans. The absence of a freight rail link from Addis to Kenya or Egypt is an absurdity, hopefully to be rectified. Sent with Reeder  

Evaluating the Millennium Villages: The saga continues Chris Blattman Michael Clemens and Gabriel Demombynes, both friends and colleagues, sprang a provocative paper on me while on vacation. The basic argument: the Millennium Villages could and should be evaluated. No excuses. Sachs and Macarthur and others at the MV project respond here . And the debate would not be complete without a cannonade from Aid Watch , who suggest that the MV folks are moving their goalposts. Let me stake out a different position. I've blogged about the Millennium Villages before, on what an evaluation could look like , but also why a rigorous evaluation might be infeasible . While guest blogging, Julian Jamison commented that it might actually be detrimental to a progressive agenda to evaluate too much . Now, Michael and Gabriel write a good paper, and do a much more thorough job than I ever did, and more or less convince me that a rigorous evaluation is possible. The evalua...

Microcredit as savings in reverse Chris Blattman I'm attending the Microfinance Impact and Innovation Conference , and Abhijit Banerjee is presenting his Miracle of Microfinance? . I'd seen versions of the paper before, but there is one new bit (or a bit I missed the first time) that I found insightful: Microcredit can act like "savings in reverse": the household obtains the loan principal in a large sum, which can be invested, and then group and lender pressure to make regular loan repayments every week provides discipline that may make resisting temptation (tea, cigarettes, etc.) or requests for money from other family members or friends easier. Not only do they find just this, but that the money not spent on alcohol, tobacco, gambling, and food was spent (in part) on durable goods used in a household business. The absolute effect is relatively small, but in relative terms quite large: an increase of 20% relative to usual spending on ...