Published on Development Impact

Friday links June 21: measuring the cost of microfinance, cost-ineffective monitoring, new Stata commands, and more…

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  • On the FAI blog, Jonathan Morduch discusses the problems of trying to measure the cost of microfinance and why the profession underfocuses on costs – “if you’re not the kind of person who gets pleasure from filling out income tax forms, you’re probably not the kind of person who enjoys calculating microfinance subsidies”.
  • Also on the FAI blog, Tim Ogden interviews Chris Blattman about his evaluation of a cash transfer for training program in Uganda – Chris on why we have conditions in giving cash “we seem to have a very low tolerance for mislaid funds whether it’s mislaid funds in our own country or money we gave to somebody else. That intolerance will mean even small amounts mislaid will get blown out of proportion so we’ll likely always have some accountability system that is cost-ineffective in terms of achieving poverty reduction goals but make things more politically acceptable.”
  • In the Atlantic, Peter Orszag and John Bridgeland ask “can government play moneyball?”, looking at the challenge of getting the government to pay attention to evidence in funding decisions: “less than $1 out of every $100 of government spending is backed by even the most basic evidence that the money is being spent wisely…less than $1 out of every $1,000 that the government spends on health care this year will go toward evaluating whether the other $999-plus actually works.”….” Since 1990, the federal government has put 11 large social programs, collectively costing taxpayers more than $10 billion a year, through randomized controlled trials, the gold standard of evaluation. Ten out of the 11—including Upward Bound and Job Corps—showed “weak or no positive effects” on their participants”…” And failing to do any good is by no means the worst sin possible: some state and federal programs actually harm the people who participate in them. …It turns out that Scared Straight–style programs are actually pretty effective—at increasing criminal behavior”.
  • To get a taste of what’s new in economics, browse through the NBER Summer Institute program.
  • Stata 13 has new treatment effects estimators programmed in – matching estimators and inverse probability weighting. This 5 minute video discusses how to use these new commands. There is also this 165 page manual for the new treatment effects (te) command.
  • Funding opportunity: The IPA global financial inclusion initiative is funding work on innovative products and programs that enhance poor households’ access to and usage of improved financial tools, products, and services


David McKenzie

Lead Economist, Development Research Group, World Bank

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