Microcredit as a Grass-Roots Policy for International Development

The failure of top-down development policies in the Third World has given rise to a variety of grass-roots, or bottom-up, development strategies to combat the severe poverty that continues to plague developing countries. Among these grass-roots approaches, microcredit has grown rapidly in popularity, scope, and impact over the last two decades. Microcredit provides financial capital for poor entrepreneurs who toil in the informal, poverty sectors in developing country economies. In addition to the thousands of predominantly nongovernmental organizations that offer microcredit programs, many national governments in the Third World are now seeking to integrate microcredit strategies into their development policy and planning. Accordingly, this article examines the microcredit movement, including its rationale and underlying premises, its impact on the poor, and its role in development policy.     

In Cameroon,a female-centred organization works to conquer the poverty of rural women

This is a discussion of the work of the Rural Women Development Council for poor rural women in Cameroon. The concept of absolute poverty involves the measurement of the quantity and quality of necessities required to maintain the average well-being of an individual or group of individuals. The standards are considered to be relative to a particular time and place. Subjective poverty is a state of acceptance by the person who is poor that he or she is poor; it is independent of the perspective of onlookers. Income levels vary resulting, and as a result, poverty exists. Under those premises, the Rural Women Development Council (RWDC) is helping to alleviate poverty in rural women through microcredit schemes. Over 200 women have engaged in farming and small trades. Increased equity, enhanced opportunity, peace and security, participation and sustainable future, in addition to increased income, help to defeat poverty. Strategies for eradicating poverty include enhancing the ability of local communities to adapt to stress, overcome emergencies and improve long-term productivity. The RWDC have observed that loanees are today economically above other rural women.     

Microcredit and Women's Empowerment: Through the Lens of Time‐Use Data from Rural India

This study examines the impact of microcredit on male and female time use, and draws on this analysis to explore the linkages between credit and women's empowerment. A study of time use can help understand these linkages, because if credit is intended to improve women's livelihoods, it can also be expected to influence the way women allocate their time. Its other advantages are that it does not suffer from much time lag and can be objectively measured. Using household survey data from rural India, the findings show that while microcredit has little impact on women's time use, it helps their husbands move away from wage work (associated with bad pay and low status) to self‐employment. This is because women's loans are typically used to enhance male ownership of the household's productive assets. Further, it is found that it is only women who use loans in self‐managed enterprises who are able to allocate more time to self‐employment. If credit is intended to increase the value of women's work time, it follows that it is not access to loans but use of loans that matters. Ensuring women's control over loan‐created assets must therefore be a critical policy objective.     

VEHICLE ACCESS AND EXPOSURE TO NEIGHBORHOOD POVERTY: EVIDENCE FROM THE MOVING TO OPPORTUNITY PROGRAM

The geographic determinants of social and economic opportunity have received much scholarly attention. A missing link in this body of research is an emphasis on the range of factors influencing low‐income households’ exposure to neighborhood poverty over time. This paper examines the dynamics of exposure to neighborhood poverty for Moving to Opportunity (MTO) program participants. Our paper is unique in its emphasis on the role of vehicle access as it shapes exposure to neighborhood poverty. We find that vehicle access is an important factor shaping residential spells and transitions to low‐poverty neighborhoods over time. We also find that the combined influence of a geographically‐targeted residential mobility requirement and vehicle access substantially elevates a household's likelihood of accessing and staying in a low‐poverty neighborhood. These findings suggest that residential mobility programs and similar efforts to spatially deconcentrate poverty should pay particular attention to the transportation needs of low‐income households.     

Development and the Role of Microcredit

Microcredit is a concept that has gained widespread acceptance by international development agencies and major donors. It is viewed as a way to correct both governmental and market failure in Sub-Saharan Africa. Many view microcredit as a method for linking the formal and informal sectors of African economies to increase the reach of the formal sector. Extending the reach of the formal economy through microcredit is possible, and desirable, depending on macroeconomic reforms, respect for traditional financing relationships, and local control of institutions. However, very little has been done to determine the extent to which microcredit programs actually increase economic well-being. The model program, Grameen Bank of Bangladesh, has been studied and evaluated, but replications may not be inherently successful. The literature accepts that microcredit will increase economic well-being, if programs are correctly designed. Program design issues cannot be resolved, however, until economic well-being is measured and associated with specific designs.     

Conditional Cash Transfers and Social Mobility: The Role of Asymmetric Structures and Segmentation Processes

This article seeks to advance existing research on conditional cash transfers (CCTs) by centring the analysis of their long‐term impact on the reproduction of poverty and exclusion. To date, most analyses and assessments of CCTs’ long‐term impact have been based on simulations focused on specific parameters such as income changes and educational attainment. This study takes as its starting point the assumption that any efforts to break the cycle of chronic poverty and exclusion must address their underlying structures and processes. To that end, it presents a social mobility analysis of Uruguay's Asignaciones Familiares and its impact on residential segregation, educational segmentation and labour market segmentation. Based on empirical data from qualitative interviews, household surveys and existing research studies, the programme is found to insufficiently address these asymmetric processes. Without accompanying structural reforms, this limitation will significantly constrain the programme's capacities to promote beneficiaries’ social mobility by breaking the intergenerational transmission of poverty.     

HOW MUCH CHILD SUPPORT CAN ABSENT FATHERS PAY?

A variety of empirical studies show that custodial mothers and children are worse off after separation and divorce than absent fathers. Many of these mothers and children live in poverty and many more are above the poverty line but below median family income. Since 1974 the U.S. has had a federal-state program of Child Support Enforcement, but absent fathers still have a poor record of paying child support. To estimate how much money absent fathers could be expected to pay in child support, we used income data from the Panel Study of Income Dynamics, Census Bureau data on the number of custodial mothers and children with living absent fathers, and two systems for determining how much money absent fathers should pay in child support. Using these sources, we estimate that absent fathers could pay $26.6 billion in child support–about 3.6 times as much as they actually paid in 1984. Most of this child support money would come from upper-income families. We conclude that absent fathers could substantially augment the financial security of custodial mothers and their children, and that the U.S. should therefore pursue a vigorous program of Child Support Enforcement.     

The Historical Impact of Welfare Programs on Poverty: Evidence from the American States

Over the years, there has been a spirited debate over the impact of the welfare expansion associated with the War on Poverty. Many analysts have maintained that public assistance expansion during this period decreased poverty by raising the incomes of the poor (an income enhancement effect), while others have contended that welfare expansion increased poverty by discouraging the poor from working (a work disincentive effect). There has been considerable empirical research about the historical effect of welfare on poverty, nearly all of which relies on the poverty rate (i.e., the percentage of persons with income less than the “poverty threshold”) as an indicator of the extent of poverty. However, this work has not employed designs that allow researchers to sort out distinct income enhancement and work disincentive effects. We develop a model of poverty rates in the American states that permits estimation of these distinct effects—based on state‐level time‐series data observed annually for the years 1960–90—and we find that welfare had both effects during our period of analysis. We also calculate the net impact of increases in welfare benefits on the poverty rate—taking into account both work disincentive and income enhancement effects. Our results indicate that this net impact is dependent on three variables: the initial level of cash benefits, wage levels for unskilled workers, and the share of the benefit increase provided through cash rather than in‐kind assistance. Because of historical trends in these variables, since the 1970s welfare spending has become increasingly less effective in reducing the poverty rate. However, the significance of this result for policymakers must be tempered by evidence that flaws in the poverty rate as an indicator of poverty make it so that any finding about the net effect of an increase in welfare benefits on the poverty rate underestimates welfare's ability to lessen the true extent of poverty.     

After the Nicaraguan Non‐Payment Crisis: Alternatives to Microfinance Narcissism

This article argues against ‘microfinance narcissism’ and calls for a re‐politicization of the microfinance paradigm. The dominant verdict on microcredit has undergone a damning transformation, from ‘magic bullet for poverty reduction’ to ‘cause of suicide’. Nowadays, both radical critics and mainstream voices deplore microcredit's negative impact on micro‐entrepreneurs. They argue for a reorientation where credit is targeted at established small and medium‐sized enterprises, particularly in rural areas. The crisis in microfinance worldwide, including burgeoning protests, are viewed as proof of the commercial derailment and/or misplaced faith in microfinance's positive social and economic impact on the poor. This article engages with this debate through a study of the Nicaraguan micro‐finance crisis. It challenges existing analyses that pin the crisis on agricultural over‐indebtedness, lack of due diligence, or Sandinista populist politics. Illustrating the dangers of neglecting the diverse nature of microfinance, it reveals the paradoxical outcomes of the crisis: a refocus on the urban at the expense of agricultural credit for small and medium enterprises and a consolidation of the power of national processing elites. Nicaragua's Non‐Payment Movement is also shown to be both a product of elite manipulation and an expression of legitimate resistance to an industry that turns a blind eye to the manner in which markets and politics constrain clients’ potential.     

Borrowing Across Borders: Migration and Microcredit in Rural Cambodia

This article explores an unexpected and overlooked consequence of the expansion of microcredit: how it interacts with migration patterns. Drawing on qualitative research in northwest Cambodia, this study explores the uses, meanings and implications of ‘migra‐loans’ — microcredit loans that are used in tandem with household strategies of international migration. Using microcredit in combination with migration allows households to immediately meet consumption goals and utilize the credit being actively promoted by microfinance institutions, while also retreating from insecure and less profitable local livelihood strategies. These strategies problematize expectations about the developmental potential of microcredit, and highlight the importance of local context in framing rural livelihood choices.     

Women and microcredit: alternative readings of subjectivity,agency, and gender change in rural Mexico

Within the last two decades, the growth of microcredit, or the provision of small loans to poor borrowers, has become a key development initiative in the Global South. This is particularly important for questions of gender relationships, as the majority of microcredit recipients worldwide are low-income women. However, most assessments of microcredit and gender emphasize issues of individual empowerment rather than the large-scale political implications of credit provision. In this article, I critique the use of mainstream empowerment models employed in the assessment of microcredit's ability to provoke changes in gender relationships. I argue that these models often fail to describe microcredit's effects on women's lives due to their epistemological framework, which pushes aside questions of geographical and historical specificity in pursuit of a universally empowered microcredit subject. Examining a mainstream empowerment model I used to conduct research in rural Mexico, I highlight these problems and present an alternative analysis of subjectivity, agency, and gender change as a result of microcredit provision.     

Actually how Empowering is Microcredit?

This article re‐assesses the effect of microcredit programme participation on women's empowerment by applying an analytical framework that recognizes the conceptual shift in emphasis in the definition of empowerment, from notions of greater well‐being of women to notions of women's choice and active agency in the attainment of greater well‐being. The author finds that microcredit programme participation has only a limited direct effect in increasing women's access to choice‐enhancing resources, but has a much stronger effect in increasing women's ability to exercise agency in intra‐household processes. Consequently, programme participation is able to increase women's welfare and possibly to reduce male bias in welfare outcomes, particularly in poor households.     

The political economy of maize production and poverty reduction in Zambia: analysis of the last 50 years

Poverty and food security are endemic issues in much of sub-Saharan Africa. To eradicate extreme poverty and hunger in the region remains a key Millennium Development Goal. Many African governments have pursued economic reforms and agricultural policy interventions in order to accelerate economic growth that reduces poverty faster. Agricultural policy regimes in Zambia in the last 50 years (1964–2008) are examined here to better understand their likely impact on food security and poverty, with an emphasis on the political economy of maize subsidy policies. The empirical work draws on secondary sources and an evaluation of farm household data from three villages in the Kasama District of Zambia from 1986/87 and 1992/93 to estimate a two-period econometric model to examine the impact on household welfare in a pre- and post-reform period. The analysis shows that past interventions had mixed effects on enhancing the production of food crops such as maize. While such reforms were politically popular, it did not necessarily translate into household-level productivity or welfare gains in the short term. The political economy of reforms needs to respond to the inherent diversity among the poor rural and urban households. The potential of agriculture to generate a more pro-poor growth process depends on the creation of new market opportunities that most benefit the rural poor. The state should encourage private sector investments for addressing infrastructure constraints to improve market access and accelerate more pro-poor growth through renewed investments in agriculture, rural infrastructure, gender inclusion, smarter subsidies and regional food trade. However, the financing of such investments poses significant challenges. There is a need to address impediments to the effective participation of public private investors to generate more effective poverty reduction and hunger eradication programmes. This article also explores the opportunities for new public–private investments through South–South cooperation and Asia-driven growth for reducing poverty in Zambia.     

旅游减贫与旅游再贫困:旅游发展中不同土地利用方式对贫困人口的影响

旅游发展能否真正减贫以及如何实现减贫应是当前旅游减贫大背景下备受讨论的焦点,并受到了国内外学术界积极关注。然纵观现有研究,对旅游减贫效果的实证探讨及细致剖析尚十分缺乏。本文选取旅游发展中对土地资源的利用作为研究视角,探讨这一过程对贫困人口生存状态的影响。研究以三亚亚龙湾度假区发展对周边两个村庄的土地使用（征用、租用）为例,采用多维贫困概念,探讨旅游发展给两村村民在收入、居住条件、就业及生产方式以及话语权等带来的影响。研究提出了旅游再贫困的概念,意在说明旅游发展在使贫困人口短暂富裕后再次陷入贫困状态的发展现象,是旅游发展之于贫困人口负面影响的一种表征。     

The Australian aid program: dealing with poverty?

The Australian government's White Paper on aid provides a blue print for the Australian aid program for the next decade. While it ostensibly has a focus on poverty, it still sees economic growth and effective government as the path to poverty reduction. This article analyses and highlights the issues associated with this approach to poverty. These are: growing inequality and vulnerability, the rural–urban divide in poverty outcomes, and increasing social exclusion leading to increasing social and political insecurity. The article then examines the alternative policies adopted by the British aid agency, DFID, and concludes with some suggestions on how the practice of the Australian aid program can better match the goal of poverty reduction.     

Income Transfers Alone Won't Eradicate Poverty

Even in the current economic situation, in developed countries, rhetoric about cutting "poverty" is misleadingly outmoded—because it implicitly suggests that government income transfers can be the vehicle for achieving substantial reductions in poverty. Almost all Americans already live far above subsistence poverty: most because of their earnings, and the rest because of government transfer programs. This decline in material poverty is obscured by weaknesses in how the official U.S. poverty measure counts income. What is now called poverty is really "income inequality." Reducing income inequality is also a vitally important social goal, but it cannot be accomplished through income transfers alone. The authors argue that, although income transfers have a role to play in lessening the impact of material deprivation, real progress in raising incomes will require building the human capital of the economically disadvantaged. This means both increasing the earnings capacity of lower-income workers and reducing the number of female-headed families.     

Inequality,Growth, Poverty and Lunar Eclipses: Policy and Arithmetic

Alleviating poverty, mitigating inequality and achieving growth are all acknowledged goals of development, whatever the degree of success with which these goals might have been addressed in various economies of the world. Apart from questions of resolve and genuine commitment, what makes it hard to engage with these goals is that the pursuit of any one of them does not necessarily secure the ends of either or both of the other two. Such engagement requires a measure of conceptual clarity, an identification of normative priorities, and the deployment of carefully crafted policies that accommodate trade-offs among competing goals. In particular, policies such as the single-minded pursuit of growth as a panacea for all the difficulties of development appear to be misguided, and based on a faulty application of deductive reasoning to past experience. These issues are addressed here by attending to some elementary arithmetic revolving around the measurement of money-metric poverty and inequality, and the decomposition of poverty changes into effects attributable to growth and distributional changes.     

THE ANTI-POVERTY EFFECT OF IN-KIND TRANSFERS: A “GOOD IDEA” GONE TOO FAR?”*

During the 1970's several policy analysts developed estimates of the effect of in-kind transfers (e.g., Food Stamps and Medicaid) on poverty. Unfortunately, many of these studies have, drastically overstated the antipoverty impact of in-kind transfers, leading some to claim that there are no mart? poor people in America. This article reviews these, studies, provides new evidence on the impact of in-kind benefits on poverty, and concludes that there is still a substantial poverty problem in America today which need be addressed by policymakers.     

Social capital and poverty of the wage-labour class: problems with the social capital theory

Social capital, understood as norms of reciprocity and associational life, is supposed to provide a bottom-up approach to poverty alleviation world-wide. The World Bank says that social capital is a necessary condition for long-term development and that social capital is the capital of the poor. This paper will argue that much of the literature is too sanguine of the benefits of social capital for the poor. It is, of course, important to look at the extent to which social capital can help the poor. But how the conditions of the poor people can also affect their social capital is equally important to examine, and this has often been neglected by many scholars who have been busy to prove that social capital is a new paradigm of development. Based on qualitative interviews in two rural areas in Orissa, eastern India, this paper seeks to examine whether and to what extent poor people of the daily wage labour class benefit from their social capital. It then goes on to unpack the mechanisms in which the economic-political conditions under which poor people live and the spatiality of these conditions affect the production of social capital. By seeking to unpack the dialectical relation between social capital and poverty, the paper aims at problematizing the overly optimistic claims about social capital. It shows that it is untenable to posit social capital as an independent variable and poverty as a dependent variable because the economic-political conditions of poor people have an enormous constraining effect on social capital itself and its supposed material benefits for the poor.     

ASSESSING THE SPATIAL ACCESSIBILITY OF MICROFINANCE IN NORTHERN BANGLADESH: A GIS ANALYSIS

This paper attempts to understand and operationalize the notion of spatial accessibility (SA) in the context of microfinance. Using geographic information system (GIS) data from northern Bangladesh, we have generated a kernel‐smoothed map and found remarkable spatial variation in access to microcredit. Results suggest that areas isolated from physical infrastructure, administrative establishments, and prone to ecological shocks, exhibit lower degree of SA. Moreover, using an instrumental variable framework, we found that SA has a significant positive impact on household's decision to borrow and on the number of loans: one standard deviation higher SA is associated with a rise in participation probability and average number of microloans by, at least, 3.5 percentage points and 16 percent, respectively.