Harping on about holiday decorations before the Thanksgiving Turkey is even stuffed should be the preserve of Macy’s design teams and tinsel factories. But a recent event at CGD had me thinking about Christmas trees.
This is a reply from Hugh Sinclair to my review of his book. If you haven't read the book, I think you will get a good sense of his views and style from this post. ---David Roodman
Fury and delight: I thank David for performing “due diligence” on my book, and am pleased to see genuinely new issues appear to be attracting attention, long over-due perhaps. Identifying where yet more scrutiny is required in the embattled microfinance sector can only be a constructive development. The mysteriously over-looked principal-agent problem is indeed the central theme of my whistleblowing book, and to refer to my suggestions as laughably conservative may be premature. I am suggesting a new degree of scrutiny and regulation be applied to those entrusted to manage a significant proportion of capital flows to MFIs. Start asking too many questions about their activities and impact, or, God forbid, regulate the likes of Kiva - and such suggestions may not generate laughter amongst our trusted intermediaries.
The book is an insider’s memoir, and not a text-book. It is aimed at the non-academic audience; the (wo)man on the street, who is largely spared the subtleties of these blogs and quasi-academic debates, and yet maintains a limited, at times uninformed impression of the wonders of microfinance. Insiders know this idealism, optimism or hype, is fantasy, but the (wo)man on the street usually does not. I attempt to plug this gap. We are not all experts in everything, sometimes we have to trust the experts, but in microfinance extreme caution is required.
One contention in my work is that the new, experimental microfinance impact studies are more reliable than the older, non-experimental ones, not to the individual success stories on microfinance web sites.
A working paper by Ram Rajbanshi, Meng Huang, and Bruce Wydick speaks to this thesis in an interesting way. To whet your appetite for my pedagogic exegesis, here's a passage from the introduction:
A few years ago, Alaka Holla and Michael Kremer, the latter a leader in the randomization revolution, opened a CGD working paper with this interesting observation:
Over the past 10 to 15 years, randomized evaluations have gone from being a rarity to a standard part of the toolkit of academic development economics. We are now at a point where, at least for some issues, we can stand back and look beyond the results of a single evaluation to see whether certain common lessons emerge.
I am a big admirer of Nick Kristof, of the passion and concern that animate his books and columns, and of the must-do-can-do spirit that they embody. But sometimes his soft heart gets ahead of the hard head, leading to misleading and intellectually insupportable advocacy of foreign aid. A good example is today’s column.
Last Friday I spoke at this event “What Works in Education”, a research colloquium sponsored by the World Bank, J-PAL, and USAID (which, like the World Bank, has recently released a new education strategy).
Last Friday, I convened a small meeting of peer reviewers of my book. Turns out getting busy experts to review a 100,000-word manuscript isn't easy, which made invited reviewers more numerous than actual reviewers and made me all the more grateful to the latter. Beth Rhyne came in person, as did my boss Nancy Birdsall; Rich Rosenberg and Jonathan Morduch joined by Skype.
The passage of time, the approach of the end of the year, and the ongoing review of microfinance regulation by the Reserve Bank of India--appointed Malegam committee seem to have prompted people to sum up what happened in Andhra Pradesh and extract lessons. E.g.:
Last week I attended the Microfinance Impact & Innovations Conference organized by the Financial Access Initiative (FAI) in New York.