This was my first published critique of the microfinance development fad. It focuses on the common idea in a so-called “impact evaluation” of evaluating a development project spending $X by comparing its “iimpact” to the result of the pseudo-counterfactual of doing nothing and thus spending $0–instead of comparing it to the true counterfactual of spending the same $X on the best alternative project. Now many of these criticisms that I learned from Thomas Dichter are considered old hat.
Click here to download the paper.