NextBillion Editor

Weekly Roundup – 8/28/15: Will microfinance take on the ‘randomistas’?

NextBillion Financial Inclusion Editor James Militzer’s known around these parts for his Twitter deep-dives, and it paid off this week when he came across a thought-provoking online flare-up involving two leaders in their field. At the end of the day, their Twitter discussion provided a wonderful opportunity for Militzer to play referee. And Kyle Poplin, health care maestro, weighed in on another bout: The e-cigarette vs. traditional tobacco cancer stick industry in the developing world.

We hope you’re having fun reading these Roundup items. If you see anything we’re missing out there, please point it out to us. We welcome your ideas.



The News: The argument began, as these things often do, with a tweet:



In it, Dean Karlan, the influential poverty economist and president/founder of Innovations for Poverty Action (IPA), raises his eyebrows at some claims expressed by Rupert Scofield, the similarly influential founder and CEO of microfinance pioneer FINCA, in a recent article. For good measure, Karlan tagged another microfinance luminary in the tweet: Grameen Foundation’s founder and recently resigned former president/CEO Alex Counts. He sharpened his point in another tweet the next day:



Rather than continue the back-and-forth in 140-character bursts, Counts shot back with a detailed, thoughtful – and pointed – post on the Center for Financial Inclusion’s blog. In it, he took issue with the now-common accusation that microfinance advocates have exaggerated the sector’s anti-poverty impact. More significantly, he lobbed a criticism of his own back at the increasingly influential “randomistas” – research organizations like IPA and J-PAL that promote the use of Randomized Control Trials (RCTs) to measure social impact.

In responding to their critique of his sector’s overstatements, he said, “One way of interpreting this dynamic, expressed to me by another industry leader as I prepared this response, is that certain research organizations are ‘aggressively marketing their work by “overclaiming” (or in other words) exaggerating the claims (made by) microfinance (advocates) initially’ in order to heighten interest in their research.”

He aimed another shot directly at the researchers’ methods:

“While the practitioners of RCTs are very rigorous about random assignment at the level of the program participants, their choice of MFIs to study among the thousands in operation today has been anything but scientific. Rather than attempting to choose a truly representative sample of MFIs for study, their selection has been uncoordinated and opportunistic, and has to date completely avoided the country where microfinance is most intensively practiced. For this and other reasons, there is real debate even within academia about what can be learned from RCTs, especially what can be applied to other places and similar programs.”

Our Take: In the annals of Twitter spats, this is no Nicki Minaj vs. Taylor Swift. But even this muted public shade-throwing is relatively rare among anti-poverty stalwarts of Counts’ and Karlan’s caliber. And since IPA and Grameen Foundation are both NextBillion content partners, I feel the urge to act as referee.

To that end, I’m siding with Karlan on the question of whether microfinance has oversold itself. It’s true that many in the sector have been careful, especially in recent years, to tone down any claims of transformative impact. But the concept of microcredit as articulated by many of its most prominent advocates is still premised on the belief that anyone, anywhere, can become a successful entrepreneur and work their way out of poverty if given access to capital. The sector has yet to fully grapple with the reality revealed by a growing number of RCTs: That a very small number (around 5-10 percent) of people are able to parlay microloans into any kind of significant business success – and many take out these loans with no intention of even trying. There’s a case to be made for expanding access to finance for its own sake, regardless of whether it fosters entrepreneurship. But microfinance has yet to decisively rebrand itself around the “lesser goal” of financial inclusion, as many organizations remain wedded to the loftier (and, it must be said, more saleable) concept of empowering the poor.

But there’s a more important angle that could take this beyond a short-lived Internet dust-up: The question of whether it signals an escalation in the pushback from the microfinance world against the randomistas’ increasingly solid case against their sector’s anti-poverty impact. There have been some rumblings – notably from Scofield himself earlier this year – to that effect. Will Counts’ suggestion that the researchers behind recent RCTs are skewing the results through opportunistic sampling – while exaggerating microfinance’s faults to heighten interest in their research – up the ante in this debate? And does his sector have a valid point about RCTs’ ability to capture microfinance’s actual impact in the first place? Stay tuned, there may be more to come.

– James Militzer


Just as a soda’s a soda, a cigarette’s a cigarette

The News: As the developing world develops, the health-related news isn’t necessarily good. There are, for instance, three times as many obese people in emergent nations as there were 30 years ago, thanks to changing eating habits. And then there’s all the smoking …

According to the World Health Organization (WHO), tobacco companies are targeting their marketing in developing countries, where 70 percent of 8.4 million smoking-related deaths are expected to occur by 2020.

We’ve long known that cigarette smoking is addictive, can cause cancer and exacerbate other problems, and a new study “calls for urgent action to integrate anti-smoking strategies into the care of people being treated for tuberculosis and HIV” – two diseases most prevalent in developing countries.

So, how do we stop smokers from smoking? Derek Yach, a native South African and former cabinet director who led tobacco-control efforts at WHO, has an idea.

Yach was an e-cigarette skeptic – until recently. He told Global Health Now on Tuesday that the science on electronic smoking is “maturing,” and he now buys into recent studies which show e-cigarettes are 95 percent less harmful than normal cigarettes, and that nicotine – which is delivered by both e- and normal cigarettes – is no more harmful to health than caffeine.

“It is time to end the war on e-cigarettes and view them as the smoking cessation aid that they are,” he said.

That comes on the heels – and flies in the face – of what two Stanford scientists wrote in the Aug. 18 issue of the Journal of the American Medical Association.

Drs. Andrew Chang and Michele Barry, citing WHO evidence that global use of e-cigarettes is booming, warn about the health impacts they could have in developing countries, and urge “nongovernmental organizations, such as the Gates Foundation and the Bloomberg Initiative to Reduce Tobacco Use, to support regulatory control and enforcement of the (e-cigarettes).”

“What we are most concerned about is the entry of big tobacco on a global scale in which they could hijack the harm-reduction potential and recruit new and never users into smoking,” Chang said.

So, are e-cigarettes a potential solution to a global health epidemic or the leading edge of it?

Our Take: I come down on the side of Chang and Barry. Tobacco company executives are known to tell tall tales, and I don’t think they’re above luring young smokers with e-cigarettes, or using marketing or price switches to convert e-cigarette smokers to regular smokers.

Gertrude Stein famously wrote that "a rose is a rose is a rose." And that applies in this instance, too: A cigarette is a cigarette is a cigarette. At the end of the day, e-cigarettes are not the solution to cigarettes and ill health, any more than diet sodas proved to be the solution to regular sodas and obesity. The more regulations imposed on e-cigarettes in developing countries, the better.

Kyle Poplin


Health Care
financial inclusion, microfinance, poverty alleviation