My post Bulbs, Bootleggers, and Baptists, which included a link to Econtalk, spurred me to explore another side of economics.
If you’re interested in the social side of sustainable development, you might want to check out last week’s Econtalk. Russ and regular guest Mike Munger talk about some of the issues with microfinance, focusing mostly on some research into Grameen (no, not that recent research).
As a libertarian-leaning guy with a penchant for bottom-up solutions to global problems, I’ve long been interested in microfinance as a means to alleviate poverty. So as something of a fan, it was disappointing to hear about research that suggests it doesn’t seem to produce many of the touted results. But it was also really interesting to hear about how the benefits might actually come from a completely counterintuitive source: not by providing loans, but by providing a means to save.
(Since they concentrated on Grameen bank – based in India – and Boudreax/Cowen’s study based in Mexico, it’s hard to say for sure if the same anti-savings cultural forces are at work in, e.g., Boca Chica, where we’d potentially engage in this sort of work. But from my experience, I suspect very similar attitudes and forces are there; in fact if I had to guess I’d say they are probably even stronger.)