Posts tagged with: Abhijit Banerjee

Blog author: jcarter
Tuesday, December 8, 2015
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microloans240wIf you give a man a fish you feed him for a day, but if teach a man to fish, you feed him for a lifetime. But what if a man knows how to fish but can’t afford a fishing pole? Or what if he knows how to sew but can’t afford a sewing machine? Can farm, but lacks a plow?

The recognition that some people have skills to make themselves self-sufficient but lack capital to buy the tools they need to support themselves was one of the motivations for the microlending movement.

In the early 1980s Muhammad Yunus, a Bangladeshi economist and social entrepreneur, began a project in which he used his own money to deliver small loans at low-interest rates to the rural poor. He later founded Grameen Bank to extend microlending to other communities in Bangladesh. In 2006 Yunus and Grameen Bank won the Nobel Peace Prize “for their efforts to create economic and social development from below.”

For free market advocates like me, this sounded like an ideal poverty-fighting initiative. Indeed, for about ten years I’ve been a funder of Kiva, a non-profit microlending network. I’ve always liked the idea that I was able to play the role of a small-scale venture capitalist, funding entrepreneurs in developing countries.

But in my zeal to help I never bothered to ask, “Does it work? Does microlending really help people escape poverty?”
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Blog author: jballor
Friday, September 28, 2012
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Article: “Big Questions and Poor Economics”
James Tooley. “Big Questions and Poor Economics: Banerjee and Duflo on Schooling in Developing Countries.” Econ Journal Watch 9, no. 3 (September 2012): 170-185.

In Poor Economics, MIT professors Abhijit Banerjee and Esther Duflo set out their solutions for global poverty. Their key premise is that development experts have been sidetracked by the “big questions” of development, such as the role of government and the role of aid. This approach, they say, should be eschewed in favour of adopting carefully tested “small steps” to improvement. The book ranges widely, covering topics such as food, health, family planning and microfinance. Here I treat only their arguments on education in developing countries. Poor Economics points to evidence that shows that governments have not been successful in bringing quality education to the poor. Nevertheless, the authors bring their own big-think judgments to suggest why, despite the evidence, governmentally owned and operated schooling should remain central. Part of their own evidence concerns how private schooling, including for the poor, is burgeoning and outperforming government schooling. But private education cannot be the solution, they argue, because private schooling is not as efficient as it could be. The problems identified by Banerjee and Duflo are, however, clearly caused by bad public policy. I suggest that development economists are quite justified in forming and exercising judgment on the big questions, and that when they do exercise such judgment they should be aware that they are doing so.

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