If there is plenty of aid to the poor, when bother with microfinance?
Here is a perspective from an economist from Africa: large influx of poorly targeted foreign aid corrupts governments, choke off entrepreneurship and foster dependency.
In her recent book, "Dead Aid", Dambisa Moyo points out that after decades of continuous experiments, direct foreign aid has been proven ineffective--if not counterproductive. Many African countries now have a lower per capita GDP than they did in the 1970s. Here are some reviews of her arguments. To hear what the author in her own words, here is an interview she had with NPR.
Moyo should know this better than many others: she received a PhD in Economics from Oxford, worked for World Bank and Goldman Sachs for eight years. In the interview, she came across as sincere, knowledgeable and articulate.
My view is that aid and microfinance play different roles in the effort to fight poverty. It is not a matter of either-or. But, given the dominance of direct aid, I share her sentiment that it is time to create more space for other alternatives.
Here is a perspective from an economist from Africa: large influx of poorly targeted foreign aid corrupts governments, choke off entrepreneurship and foster dependency.
In her recent book, "Dead Aid", Dambisa Moyo points out that after decades of continuous experiments, direct foreign aid has been proven ineffective--if not counterproductive. Many African countries now have a lower per capita GDP than they did in the 1970s. Here are some reviews of her arguments. To hear what the author in her own words, here is an interview she had with NPR.
Moyo should know this better than many others: she received a PhD in Economics from Oxford, worked for World Bank and Goldman Sachs for eight years. In the interview, she came across as sincere, knowledgeable and articulate.
My view is that aid and microfinance play different roles in the effort to fight poverty. It is not a matter of either-or. But, given the dominance of direct aid, I share her sentiment that it is time to create more space for other alternatives.
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