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Thursday, March 31, 2011

Debate on efficacy of micro-credit

In a purely academic debate, Martin Ravallion nicely summarizes the debate between 'Mark Pitt  and Shahidur Khandker (PK)' (who found the evidence to support the view that microcredit helps reduce poverty in their seminal paper in Journal of Political Economy in 1998) and 'David Roodman and Jonathan Morduch (RM)' (who found that Grameen Bank borrowing actually made women worse-off in a 2009 Working paper of the Center for Global Development). On March 26, Mark Pitt responds to RM's findings, confirms PK's original results and questions the appropriateness of the estimation method used by RM and inconsistencies while using the control variables by both RM and PK.

One can find the links of the main article in Ravallion's blog.

Please enjoy this very relevant and timely debate on the role of micro-credit!

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