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Adriana Garcia and Robert Lensink

Proponents of the microfinance movement long assumed that poor people remained poor because of their lack of financial capital. Poor people were supposed to possess sufficient business and production knowledge, so that offering them a small loan would lead to high returns and a sharp reduction in poverty. Muhammad Yunus (2007: 225) stated this prediction very clearly: “Rather than waste our time teaching them new skills, we try to make maximum use of their existing skills. Giving the poor access to credit allows them to immediately put into practice the skills they already know.” The idea that a shortage of credit is the main obstacle to initiating a growth process has been endorsed by many researchers and international organizations. The immediate policy advice would be grant access to credit to the poor. Credit, and nothing but credit, would be all that was needed. Recent theoretical evidence challenges this assumption and questions the role of microcredit in alleviating poverty (Banerjee 2013). Rigorous impact evaluations suggest that simply providing access to financial capital does not have transformative effects. Banerjee et al. (2015) conclude, on the basis of randomized controlled trials conducted in Bosnia, Ethiopia, India, Mexico, Morocco, and Mongolia, that microcredit generally fails to help poor people raise their incomes or consumption above subsistence levels. Similar conclusions come from Karlan and Zinman (2011) in the Philippines, De Mel et al. (2008, 2009) in Sri Lanka, and Fafchamps et al. (2014) in Ghana.

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Multinationals, Local Capacity Building and Development

The Role of Chinese and European MNEs

Xiaolan Fu, Owusu Essegbey and Godfred K. Frempong

Drawing on original research, Multinationals, Local Capacity Building and Development presents an extensive analysis of MNEs in Africa, taking Ghana as a case study, and broaching subject matter previously unaddressed in the field. Looking at MNEs impacts – both positive and negative – this book examines skill transfer from foreign management to local workers, the impact of MNEs on the improvement of local production capabilities, as well as their contributions to sustainable development goals.
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Edited by Marek Hudon, Marc Labie and Ariane Szafarz

How can financial services, such as credit, deposit accounts, financial transfers, and insurance be provided to people in need? This challenging and complex issue has been a topic of interest for the international aid community for decades. Drawing on renowned experts in microfinance and financial inclusion, this Research Agenda sheds much-needed light on this multifaceted challenge and points the way ahead for future research.
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Johan Bastiaensen, Frédéric Huybrechs and Gert Van Hecken

Building on the argument for a ‘double bottom line’ of financial and social/poverty objectives, some argue for a third bottom line to engage with environmental crises (Hall et al., 2008; Huybrechs et al., 2015). In this chapter, we provide an overview of nascent practices of ‘green microfinance’ and develop a perspective on how (micro) finance relates to the transformation to sustainability. This topic is new on the microfinance research agenda. Garcia-Perez et al. (2017: 3390) report a shallow presence of environmental issues in only 8 percent of microfinance studies, concluding that ‘(t)he environmental dimension features both a very small number of papers and very generic information processing’. As we argue below, this relates to the complex challenging nature of the topic which requires a wide-ranging research approach.

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Bert D’Espallier and Jann Goedecke

Microfinance institutions (MFIs) which provide financial services in developing economies are hybrid enterprises in the sense that they balance social and financial objectives. It is therefore not surprising that empirical researchers have studied characteristics, conditions and managerial practices related to increased social or financial performance1 or sometimes both.2 While the financial dimension of an MFI is straightforward to quantify given the abundance of accounting-based and comparable metrics, the social performance is harder to grasp. Most empirical studies resort to the framework of Schreiner (2002) who distinguishes the breadth of outreach referring to the number of poor clients reached from the depth of outreach referring to the poverty-level of the clients. Consequently, most studies use the (growth in) number of clients as proxies for outreach-breadth and average loans and proportion of vulnerable clients (female clients and rural clients) as proxies for outreach-depth. There is, however, discussion whether these MFI-level univariate proxies are reliable indicators to capture one or more dimensions of social performance, which is an inherently complex and multidimensional concept. Interestingly, the concept of social performance is viewed very differently by researchers and practitioners. Whereas practitioners advocate an encompassing view involving several institutional layers, empirical researchers typically zoom in on a single institutional outcome. It remains to be seen whether both views are reconcilable and offer complementary insights or whether they are discordant.

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Maren Duvendack

Microfinance (MF) has been long heralded as a silver bullet to alleviate poverty and empower women. It enables the poor to access low cost credit, from which they were previously excluded, to undertake profitable entrepreneurialism. However, the impact of MF has become a highly contested arena, with critical (often systematic) reviews tending to controvert earlier claims that there existed good evidence of highly beneficent impacts (for example Bateman, 2010; Roy, 2010; Stewart et al., 2010; Duvendack et al., 2011; Roodman, 2012). Until the late 1990s most of the evidence was based on either practitioner contracted qualitative evaluations and commentaries (for example Counts, 1996; Todd, 1996), or a few quantitative studies that did not adequately control for selection bias (for example Gaile and Foster, 1996; Sebstad and Chen, 1996). A widely acknowledged notable exception was the complex analysis of a quasi-experimental design by Pitt and Khandker (1998) which became known as the most convincing evidence in favour of the headline claims for MF. Confidence in the likely positive impacts of MF was boosted by theoretical model based “typical findings” derived from empirical studies; these models purported to explain the causal mechanisms embedded in the innovative practices of microfinance institutions (MFIs) which enabled them to reach the poor and maintain financial viability (for example Varian, 1990; Besley and Coate, 1995). If it is the case that this combination of qualitative and quantitative studies backed up by convincing theoretical modelling was misleading, a better understanding of how best to measure MF impact is warranted to assess the quality and rigour of the empirical evidence to date. This chapter begins with a chronological overview of the key microfinance impact evidence with a focus on the methodological approaches adopted and how these evolved over time. Next, MF-specific evaluation challenges are discussed and linked to the recent methodological debates on experimental versus quasi-experimental studies. Finally, this chapter concludes with reflections on what we may have learnt from the discourse on MF impact.

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Markus Krajewski and Rhea Tamara Hoffmann

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Edited by Markus Krajewski and Rhea T. Hoffmann

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Edited by Markus Krajewski and Rhea T. Hoffmann

Increasing international investment, the proliferation of international investment agreements, domestic legislation, and investor-State contracts have contributed to the development of a new field of international law that defines obligations between host states and foreign investors with investor-State dispute settlement. This involves not only vast sums, but also a panoply of rights, duties, and shifting objectives at the juncture of national and international law and policy. This engaging Research Handbook provides an authoritative account of these diverse investment law issues.
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Zeinab Karake, Rana A. Shalhoub and Huda Ayas

This unique, innovative examination of cyberspace policies and strategies and their relation to cyber laws and regulations in developing and emerging economies uses economic, political, and social perspectives as a vehicle for analysis. With cyber risk at the top of the global agenda as high-profile breaches increase worries that cybersecurity attacks might compromise the world economy, this analysis becomes relevant across disciplines.