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Microfinance funds

The Wall Street Journal has a summary in today’s paper on the growth of private for-profit microfinance funds.

Investors can choose among a variety of new investment vehicles, including equity and debt investment funds; bond-like securities that are ultimately backed by thousands of tiny loans and so-called loan-guarantee funds where, in some cases, participants lend their creditworthiness rather than cash.

Global optimism

They may not be the richest, but Africans remain the world's staunchest optimists. An annual survey [PDF] by Gallup International, a research outfit, shows that, when asked whether this year will be better than last, Africa once again comes out on top. Out of 52,000 people interviewed all over the world, under half believe that things are looking up.

Knowledge economy rankings

Yet another business ranking of cities is out, the 2005 World Knowledge Competitiveness Index – which claims to benchmark the ‘knowledge capacity, capability and sustainability’ of different regions. Silicon Valley leads the way, the first non-US city is Stockholm in 8th place. Unfortunately only North America, Europe and the Asia-Pacific are covered.

Do randomized trials work?

I'm a fan of randomized trials for aid projects: they provide credible information about the true effects of the intervention. Other evaluation methods struggle - what if the project goes badly but other things in the economy are going well? You might get apparently good results and expand a bad idea. Or vice versa.

But I've been reading up on a symposium in the Journal of Economic Perspectives from 1995 (JStor or AEA membership necessary). Nobel laureate James Heckman and Jeffrey Smith put the counter-argument:

Aceh Diary: Price distortions

There are two prices in Banda Aceh—the price charged to locals, and that reserved for foreigners. Or as some around here put it the “blue-eyed price” and the “brown-eyed price."

I had heard before coming out that Banda is something of a bubble economy these days from all the local and international organizations and NGOs falling over each other in a rush to spend the big bucks. I didn’t realize then to what extent that’s true, and how much it’s distorting the local economy and perceptions of the people as to the budget limitations some organizations, including IFC, have.

Index of Economic Freedom

The Heritage Foundation’s 2006 Index of Economic Freedom is out. Hong Kong and Singapore lead the way. Estonia comes in at seven, Chile at fourteen. These are the top 10 ‘worsened'.

In the Wall Street Journal Mary Anastasia O’Grady, one of the reports' editors, uses the contrasts between Estonia and Chile to claim that: