What about an individual or settlement determines how successful it will be? We study the flow of information and goods among human settlements and how this relates to economic outcome. Presently our empirical study is focused on rural ecosystems in India, identifying key variables that predict the economic outcome of a village and the variance among individuals within them.
Today there are many development economists that focus on social impact evaluation studies. These studies typically compare groups receiving an intervention to groups that did not. For example, did the group that received microfinance do better than the group that did not? Although they attempt to ‘control’ for variability between groups, I see some fundamental flaws in this approach. First, to be meaningful comparison, a ‘control’ group must be independent of the intervention group. In society, which by definition is an interconnected system, this is virtually impossible and you can never control this way for network effects.
For example, lets say the people who received microfinance in the village used the money to buy goods from the people who didn’t. Its not impossible that this could result in the ‘control group’ getting richer because they could sell more. Compared to them, … Read More »
The Physics of Friendship: Do we make friendships no differently than a bunch of particles bouncing around?
The Physics of Friendship (This is an easy to read writeup on the actual paper)By comparing people to mobile particles randomly bouncing off each other, scientists have developed a new model for social networks. The model fits with empirical data to naturally reproduce the community structure, clustering and evolution of general acquaintances and … Read More »
Madura is a for-profit social enterprise whose core business is providing small unsecured loans to the poor. In India and around the world microfinance is very much an evolving sector. Today microfinance is practiced either for-profit or not-for-profit, each with its own unique drivers.
The prevalent for-profit approach is scale focused and profit driven. In this model the goal is to create a streamlined process for the disbursement and collection of loans that allows loans to be pushed out as rapidly as possible. Interest rates for this model generally range between 25 to 40% in India today. This is profitable business. Unfortunately it has also been widely publicized and hyped as a path out of poverty. On the positive side, it provides a conduit for more fund flow into the ‘subsistence’ economy and over time competition will result in innovations to … Read More »