I like about studies like those above because they take plausible but by no means obvious hypotheses and subject them to empirical tests and critical scrutiny.

Easier-to-evaluate endeavors provide stronger feedback loops to the aid agencies conducting them, which in our view makes them more likely to succeed (indeed, the fact that health outcomes are particularly measurable could partly explain why there has been particularly great improvement in medicine, and thus in health outcomes, over time). Easier-to-evaluate endeavors also generate stronger evidence of effectiveness ultimately, which makes it easier for an individual donor to have confidence and to continually hold the charities they give to accountable. If easier-to-measure activities are easier to succeed at and easier to have confidence in, then it makes sense that they would be more likely to be recommended.

Our goal is not to give all sectors an equal chance, but to find opportunities that can be confidently recommended to individual donors.

Has microfinance reached diminishing returns? It’s true that a lot of money seems to have gone into the area, but there also may be a great deal of need in the area. Many believe that microfinance is still vastly underfunded because so many people in the world still can’t access credit. I don’t feel the data are there to have a strong view one way or the other.

Do you think that there is an inherent bias towards health. I imagine that in health, it is much easier to measure directly or infer impact. For example, an immunisation program can take the number of immunisations and multiply by the decreased likelihood of contracting a disease. You can from this get a reasonably good guess at impact. A health education program, on the other hand, would need to be measured directly to gauge effectiveness. The impact might also be be subject to compounding effects (children’s education programs might increase the effectiveness of parent education programs at a later stage) or be primarily long term effects.

BTW, this was not what I was referring to in my earlier comment. I was wondering if you think that microfinance has reached a point of diminishing returns. After the nobel prize and all the attention, I assume that a lot of resources were diverted to microfinance. Less specialised organisations may have taken up the task and perhaps less qualified recipients were targeted.

Is this notion accurate?

For donors like me who want to compare across areas, my current position is that there are better options in health than in economic empowerment, but I’m not sure yet whether the best economic empowerment options are microfinance programs. From what we’ve seen, all economic empowerment programs have relatively spotty track records.

Does that clarify?

My understanding of your position is that you class Health & Economic empowerment separately. I think that seperate classes is a necessary compromise. I don’t mean to say comparing & even ranking different classes isn’t worthwhile, just that it is a different type of activity to comparing and ranking within a class.

My question/comment above relates to classing microfinance projects from other financial empowerment projects.

Our current position is that health programs are a more proven and promising path than microfinance for individual donors seeking to help improve lives in the developing world. (See our report for more.) We continually re-examine this position as more information becomes available about the impact of microfinance programs.

Shouldn’t it be judged relative to other such programs rather then a stand alone area? What are your thoughts?