Innovative trickle-up economics

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The current issue of Forbes Magazine profiles 71-year old Paul Polak and his organization, International Development Enterprises (IDE). The idea behind IDE is that providing affordable and effective irrigation and transportation is key to alleviating poverty. Or as Forbes puts it: “the basic problem of rural poverty in the developing world happens on quarter-acre plots.” All of the products they develop aim to be provided at a cost that can be recovered after just one season of use. (I found the "hippo water roller" and "Nepali wire bridges" to be particularly ingenious.)

Implicitly implied by their strategy is a criticism that many others have echoed recently: that many large-scale government aid programs do not alleviate the pains of those they target. The funds of these large aid programs being siphoned off due to corruption, bureaucracy and other inefficiencies before being able to reach the farmers and families they are supposed to be helping. While avoiding entering into a discussion on aid effectiveness here, it is important to realize that helping those at the “bottom” should be a key goal of development practitioners - and that small private sector entrepreneurs are an excellent and willing partner for these efforts. In fact, as mentioned in a previous post, some believe that well-targeted microfinance initiatives should become a main emphasis of World Bank projects.

It should also be noted that this discussion of innovative small-scale economics goes well beyond just agriculture – the issue of small-scale infrastructure provision gathering considerable momentum during these last few years.

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