Politics, Poverty, and Microfinance

Brian Warby is assistant professor of political science at the University of Northern Iowa.

• Chapter 1—IntroductionChapter 2—What We Know So FarChapter 3—A Model of Poverty ReductionChapter 4—Looking at the DataChapter 5—Microfinance in Brazil: A Case StudyChapter 6—Is Funding Going Where it can do the Most Good?Chapter 7—The Future of Microfinance

Dr. Warby’s work provides an intriguing new way to think about microfinance. Historically, many scholars have identified microfinance as a substitute for the government in providing services to the poor. For instance, they point out that informal “group lending” overcomes the problem of weak contract enforcement found in many developing countries. However, as Dr. Warby correctly points out, this view ignores the numerous other functions that the government must provide for any private sector activity to develop. Dr. Warby’s study thus represents a new generation of research that moves beyond the question of whether microfinance is more effective than the public sector in addressing poverty to look instead at how the two can work together to provide meaningful solutions to this difficult problem.