Inspired by Poor Economics, here are some thing that seem like they might be helpful for development economics. (No idea to what extent they’ve been attempted, and there are obvious caveats to most of them.)
Credit bureaus. Microcredit institutions still have to charge ridiculously high interest rates, partly because it’s hard to distinguish good loan prospects from bad ones. Centralized credit information might be helpful in allowing more creditworthy borrowers to get cheaper capital.
Better-structured finance. Many of the poor still use moneylenders instead of microcredit because microcredit has fixed payments and group liability structure, which is a poor match for high-variance business income. Also, using leverage is generally a bad idea if you’re strongly risk averse from having diminishing returns to capital, which is the case for most microbusinesses.
Some way of getting equity financing for businesses might help with this. (I see no easy way to do this, of course—enforcement would be a nightmare, unless maybe you’re M-PESA and the business does all their transactions through your network.) Revolving credit might also be helpful, though the problems with leverage still apply.
Cheaper, more efficient and transparent auditing. Corruption through unaccountability seems to be a pretty big problem, and part of the reason it keeps being a problem may be that it’s currently expensive to get granular enough data to expose individual people misbehaving (e.g. absenteeism, embezzlement).
Reducing the friction of moving to a city. Cities tend to have better schools and job opportunities, but vastly less pleasant and healthy housing conditions, and it’s expensive to move there (and risky if one loses one’s city job). This is another area where better financing options might be helpful.
Better access to information. A common theme of Poor Economics was that people would miss out on productive investment opportunities simply because they didn’t know about them. (This is why, despite everyone’s complaints about net neutrality, I actually think Internet.org has the potential to be really awesome.)
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