Rural Finance for the Poor: From Unsustainable Projects to Sustainable Institutions

That has to be uppermost in our minds as we think about what microfinance means. For IFAD, the finance issue is crucial to the task of reducing rural poverty. We do not insist on any particular institutional model. The demand for financial services is very diverse even among the poor, and we believe that any sustainable response will have to be pluralistic. Some require access to more capital than local savings systems allow. I am thinking about those who face clear investment opportunities that will allow a sustainable improvement in food security and income. For this sort of effective demand to be met, it is essential that we foster linkages with upstream financial institutions with a much larger capital base. Support can take a wide variety of forms, from intense training of qualifying microfinance institutions, so they may become viable partners with the private sector, to taking equity stakes in private-sector institutions to increase their rural outreach. We have to keep in front of us how the rural poor make their livelihood. If we do that we can begin to chart the concrete means of reducing poverty – and understand the challenges that microfinance and microfinance institutions must confront. – From a presentation by IFAD to a regional microcredit summit, October 2000 --

In-active citizenship and the depoliticisation of community development in Ireland

At a time of rising stress for communities, families and individuals coupled with a growing disillusionment with government, the concept of ‘active citizenship’ has arrived as a salve to many of the social ills of our time. Emphasising citizen’s own responsibilities, and espousing values of solidarity, community and neighbourliness, active citizenship embodies all that is good, rendering it somewhat immune from criticism. While agreeing that community values of solidarity and neighbourliness are indeed critical, this paper takes issue with what it argues is a significant revisioning of the three core concepts embodied within active citizenship - citizenship, social capital and community development - and argues that active citizenship, as it is currently promoted by state and select civil society organisations alike, substitutes self-help for redistribution and self-reliance for state accountability, in the process depoliticising the principles and practice of community development and denying community actors a voice in their own development

The Making of Pro-poor Growth

A system of three endogenous equations is used to estimate the determinants of poverty eduction. The system incorporates: (i) the direct effect of growth and income inequality on poverty, (ii) the feedback effect of poverty on inequality and growth, and (iii) different channels through which economic policies can affect poverty reduction. Results indicate the existence of a virtuous and a vicious equilibrium. The policy mix is then critical in deciding to which of the two equilibria a country converges.

Financial Stability and Monetary Policy - A Framework

The paper presents a stylised framework to analyse conditions under which monetary policy contributes to amplified movements in the housing market. Extending work by Hyun Shin (2005), the paper analyses self enforcing feedback mechanisms resulting in amplifier effects in a credit constrained economy. The paper characterizes conditions for asymmetric effects, causing systemic crises. By injecting liquidity, monetary policy can prevent a meltdown. Anticipating such a response, private agents are encouraged to take higher risks. Provision of liquidity works as a public good, but it may create potential conflicts with other policy objectives and may give incentives to build up leverage with a high systemic exposure to small probability events

Innovation, structural change, and inclusion. A cross country PVAR analysis

Structural change can be both, a cause or a consequence of innovation, while structural change and innovations are usually accompanied by short-term outcomes of social inclusion or exclusion. Inclusion may in turn have an impact on further innovations. Yet, we find little evidence in the literature on the three-way relations between innovation, structural change and inclusion. This paper advances a first exercise in this direction. Given the multidimensionality of each (innovation, structural change, and inclusion), we extract the underlying unobserved common factor structure from various well-known macro indicators. With a structural vector auto regression (SVAR) model for a short panel of developing countries over 13 years, we nd the following main results. First, we con rm the virtuous cycle between innovation and structural change, aligning with existing literature. Second, the strongest result is the positive effect of inclusion on both innovation and structural change, that suggests policy to improve inclusion beyond poverty and inequality. Third, on decomposing the innovation index (formal, firm-level and ICT), we find each related differently to both structural change and inclusion, that suggests specific policy roles in their infl uence on inclusion and structural change