Much of the promise of microfinance comes from the fact that people can get loans even if they do not have access to traditional physical collateral such as a house. The idea that people are trustworthy enough to repay loans even without the threat of losing their property makes for an uplifting story, but it is not always true. Guarantors are understandably upset when someone does not repay what they owe, and often try to take something of value from the debtor – such as a gas tank – in order to pay off what they had to guarantee.
Recent articles in the Wall Street Journal and Slate Magazine have highlighted work by IPA researchers that has found the effectiveness of text message reminders in encourage people to save. (Check out the project here, here, and here!)
In the field experiment world, we have a strange name for money grants. We call them "capital drops" - a name that invokes food aid being dropped by air in a relief zone, only we deliver cash instead of food, travel in minibuses instead of helicopters, and distribute our cash prizes randomly to eligible people instead of to the most needy. I recently completed my first "capital drop" - we distributed $10,000 in $133 grants - and based on the looks on our participants' faces, "joy drops" might be a more fitting name.
One of my new favorite development blogs, Aid Thoughts, had an interesting post recently about what should succeed the Millenium Development Goals once they reach their deadline in 2015. I was excited to see Matt, the blogger, focus on how to approach the exercise of goal-setting for development (rather than simply focusing on the content of the goals themselves), and I found myself nodding in agreement to his emphasis on a bottom-up approach that provides room for challenges to be addressed at the local
FAI just published a new paper that reveals that 2.5 billion adults worldwide do not have a savings or credit account with either a traditional (regulated bank) or alternative financial institution (such as a microfinance institution). And nearly 90% of the financially unserved (2.2 billion) live in Asia, Africa, the Middle East and Latin America.
Reading the complex theories and equations in many academic papers often leaves me wondering, "Wow, who wrote this stuff?" It's easy to forget that academic economists don't eat math for breakfast, lunch, and dinner, or run regressions on vacation just for fun. This short Q&A from The Root gives a peek into the real-person world of IPA Research Affiliate and recent "Genius Award" winner Esther Duflo.
It’s remarkably hard to survey people if they have little children around - kids want complete attention. This past week I brought a few big bags of candy to hand out so that the kids would be happy while I was surveying. It was cheap & remarkably effective.
IPA and like-minded organizations are all about generating evidence on what works in the fight against poverty, so that those who direct funding and design policies and programs can make better-informed decisions. When we think about our audience, we usually have the giants of the field in mind: government agencies, multi-million dollar foundations and NGOs, international organizations, and so on. And appropriately so. These are the folks who have the power to design or revise whole programs, or to champion a new way of thinking on the national or international stage.