In a stimulating book, Yunus introduces the concept of social business and would like to propagate it. Two different models of social business are proposed: a profit making company owned by the poor or a non-dividend issuing company targeting social issues. The first model suffers from the ability to define poor and monitor shareholding and the living standards of shareholders. The second model suffers from the fact that liquidating dividend is sufficient for profits ultimately to be made when the mission is over. Other issues are commented upon.

Creating a World Without Poverty: Social Business and the Future of Capitalism, by Muhammad Yunus (with Karl Weber). New York: BBS Public Affairs. 2007. Paperback: ISBN 13 978 1 58648 579 5, $16.00. 261 pages.

The paper examines the growth of antipoverty transfers in Brazil and their role in securing inclusive growth. Since the turn of the century, Brazil has managed to combine improvement in its growth performance, by the standards of recent decades, with substantial, and arguably unprecedented, reductions in poverty and inequality. There is considerable interest in the mix of economic and social policies responsible for inclusive growth in Brazil, including from countries in Africa. Since the mid-1990s, the emergence of large scale programmes providing direct income transfers to household facing extreme poverty and vulnerability have provided a focus for poverty reduction strategies in Brazil. They include non-contributory pensions, like Previdencia Social Rural and the Beneficio de Prestacao Continuada, and human development conditional transfer programmes like Bolsa Escola and Bolsa Familia. Antipoverty transfers are credited with a sharp reduction in extreme poverty and with having contributed to a reduction in inequality and social exclusion. Arguably, they have also strengthened political support for pro-poor policies. This paper provides a comprehensive assessment of the role of antipoverty transfers in securing inclusive growth. It examines their design, implementation, outcomes, and sustainability. It also sketches their potential relevance to African countries. There a growing literature covering recent developments in social assistance in Brazil. The paper contributes to the literature it in several respects. First, the huge interest in conditional cash transfers globally has concentrated attention on Bolsa Familia, but the other components of social assistance are important too and are covered in the paper. Second, very little attention has been paid outside Brazil to the rich discussion and debate around the conceptual and normative frameworks supporting the development of social assistance, and social policy more broadly. The paper addresses this gap. Third, research into the effectiveness of social assistance in Brazil has produced a wealth of information on the aggregate impact of each of the component programmes. This paper assesses this literature while paying special attention to the distribution of the outcomes across municipalities in Brazil and the role socio-economic and capacity condition. Fourth, the paper will pay close attention to the sustainability of social assistance in Brazil, especially the budgetary and political sustainability issues. Fifth, the paper discusses the relevance of Brazil’s antipoverty transfers to African countries, including South-South international cooperation.

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Antipoverty Transfers and Inclusive Growth in Brazil

The poor in Bangladesh are more likely to belong to households with a larger number of dependents and lower education among household members, be engaged in daily wage labor, own little land, and be less likely to receive remittances. This poverty profile for 2005 is similar to the profile in the mid-1980s and hence at first glance it would appear that little has changed over time. A closer look at national household survey data suggests a more nuanced story. This paper uses the latest two rounds of the Bangladesh Household Income and Expenditure Survey to decompose the micro-determinants of poverty reduction between 2000 and 2005, closely following a similar analysis using five earlier rounds of the Survey. The comparison of results shows that the spatial distribution of poverty seen in earlier decades has changed with time and the drivers of poverty reduction are different in several respects.

To what extent are Bangladesh's recent gains in poverty reduction different from the past?

Chapter 12: “Does Microfinance Really Help the Poor? New Evidence on Flagship Programs in Bangladesh”

Microfinance has attracted, since its inception at the end of the seventies, the attention
of many people and institutions, both at academic and donor levels. However, evidence
is mixed so far and no definitive conclusion has yet emerged with respect to the positive
effects of microfinance, in part because of the great differences among the different
microfinance schemes but also because of methodological issues. This work aims to add
some further evidence to the impact debate, with three studies in two different rural
areas from Bangladesh and India.

The first study is based on the second round of a survey in Bangladesh undertaken by
the World Bank. A Propensity Score Matching approach was chosen to study the impact
of borrowing on household income and expenditures per capita. In this case positive
impact can only be seen in extraordinary expenditures, in particular in house extensions
and investments in houses and land, but not in current expenditures or food
expenditures.

The second and third studies analyse a dataset collected in five districts of Andhra
Pradesh, India. The former tries to answer the question of whether borrowing from Self-
Help groups (SHGs) has any effect on income and income per capita at household level.
Pooled ordinary least squares and difference in differences approaches are used to that
end. A significant impact is found in this study on income and income per capita.
In the last empirical work the main interest is focused on the distributional impact, on
the understanding that anti-poverty measures should be focused on households at the
bottom tail of income and income per capita distributions. Its analysis is based on
quantile regression, with cross sectional and panel data approaches. Distributional
impact shows, however, that the poorest might not be benefitting from these
interventions as much as better-off or not-so-poor households

González Carreras

Papers

Does microfinance have an impact? : three quantitative approaches in rural areas of Bangladesh and Andhra Pradesh, India