News and Announcements
Merck Serono has announced that it will be doubling its annual donation of praziquantel tablets, the drug used to treat schistosomiasis, from 25 million to 50 million tablets. The donations will continue indefinitely until schistosomiasis has...
"Last week, Innovations for Poverty Action’s SME Initiative brought together researchers and practitioners to discuss recent research on SMEs (Small and Medium Enterprises), mostly in the developing world." A brief summary of the conference.
On November 30, 2011, MIF General Manager Nancy Lee delivered opening remarks at the Innovations for Poverty Action SME Initiative Conference, co-hosted by IPA and the MIF and held at the IDB Headquarters in Washington, D.C. This annual event brings together a broad stakeholder group of researchers, practitioners, and policymakers to discuss the latest research on entrepreneurship and SME development in emerging markets.
- Dec 08/11 | From the newsroom |
The SME Initiative hosted its First Annual Conference on Entrepreneurship and SME Development on November 30, 2011. Co-hosted by the Inter-American Development Bank’s Multilateral Investment Fund, this event brought together over 130 researchers, practitioners and policymakers focused on entrepreneurship and SMEs in emerging markets. Presentations on past and ongoing research studies covered a range of topics related to access to managerial human capital, access to finance, and job creation with evidence from a number of countries, including Ghana, India, Mexico, Peru and Sri Lanka. Practitioner perspectives on each of these topical areas were also presented, to facilitate a dialogue between the worlds of research and policy. The event concluded with a panel discussion on “Why should we care about the ‘Missing Middle’?” Presentations from the event are available here.
IPA Research Affiliate Antoinette Schoar, who has conducted several studies in SMEs, was cited in an Economist article exploring whether the continuing economic recession has changed attitudes toward firm investment and financial decisions.
Past research has shown that exogenous shocks, such as recessions, can modify firm-level behaviour. This view is at odds with traditional theories which posit that firms base their financing decisions on sound economic analysis. But a firm is not a rational actor. It is shaped by its managers whose beliefs are coloured by past and present events. For instance, managers who lived through the Great Depression were scarred by the collapse in capital markets and preferred to rely on internal financing even when it was cheaper to borrow externally.
Interestingly, a firm’s aversion to capital markets can persist for decades after a recession. A recent paper by Antoinette Schoar and Luo Zuo, from MIT’s Sloan School of Management, concludes that managers who begin their career during a recession have a conservative management style when compared with their non-recession peers. The authors find that early career experiences are important and can influence firm-level decisions even decades later, when the “recession manager” becomes a CEO. The companies headed by these managers are reluctant to access public markets, have lower capital budgets and pay higher effective tax. If the pattern from previous downturns holds, then we can expect the next generation of business leaders to eschew capital markets in favour of self-sufficiency. Firms will invest less in capital-intensive projects and in research and development (R&D) to tightly control finances.
Check out the full article here.
Marketplace's Kai Ryssdal interviewed IPA Founder and President Dean Karlan on why people give.
Read an excerpt below, or watch and/or read the full interview here.
Ryssdal: So this is, perhaps, the most basic question of all when we're talking about philanthropy and charity, but why? Why do we give?
Karlan: You know, first of all, I have something fairly obvious to say, which is people do give for lots of different reasons. So there's some easy low-hanging fruit that do explain a lot of people's giving, which is to be part of something, to be part of a greater cause. And the striking thing about that and the tension that that creates is the question of whether people are giving simply to be part of a cause or because of what that cause actually accomplishes and how effective it is.
Civil Society's Fundraising section printed this article announcing GiveWell's recognition of IPA as a standout organization:
"Other charities recognised as 'standout organisations' include GiveDirectly which offers a method to send money directly to the poor, and Innovations for Poverty Action, which carries out research on aid primarily in the developing world and advocates its use in decision-making. KIPP Houston, Nyaya Health, Prathamand the Small Enterprise Foundation are also recognised as standout organisations this year."
IPA Research Affiliate John List was quoted in an article in Nonprofit Quarterly examining donor behavior.
John List, an economist at the University of Chicago has tested matching programs for their capacity to encourage people to give more. List found that a matching program did inspire more people to give, but offering a higher matching ratio decidedly did not lead to larger donations. People whose donations would be quadrupled gave the same amount as people whose donations would simply be doubled. “People get utility or satisfaction out of giving to a good cause. And they do not care how much public good is provided,” concluded List.
One theory about why people are less likely to give if they are more analytical has to do with what is termed here the “drop in the bucket effect,” or the sudden realization that one’s contribution pales in the face of overwhelming need. “If you really did the calculus,” List said, “my 25 dollars to the Sierra Club means nothing on the margins. So if I wanted to be really analytical about it, I’m not going to give.” List asserts that it follows that encouraging donors to give to the most efficient, best organizations might mean that less money actually gets donated.
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