Bjorn Lomborg of the Copenhagen Consensus (see my previous post on Priorities for helping the world’s poor), posted an OpEd in today’s WSJ entitled “The View from Vanuatu on Climate Change“.  Vanuatu politicians have been some of the most vocal proponents of carbon cuts to prevent global warming destructive impacts on his country.

Rather than theorizing a lot about what the poor really want (which is essentially the approach of the Copenhagen Consensus), he decided to visit the tiny island nation of Vanuatu and ask some locals about how they would prioritize things.

Here’s what one woman said: “Having a boat in the village to use for fishing, transporting goods to sell, and to get to hospital in emergencies.  She doesn’t want more aid money because ‘there is too much corruption in the government and it goes in people’s pockets,’ but she would like microfinance schemes instead. ‘Give money directly to the people for businesses so we can support ourselves without having to rely on government.’”

I won’t comment here on the extreme disconnect between her country’s president and her situation.

Microfinance is very effective in getting cash to the poor

One of the lesser told benefits of microfinance is that money actually does get into the hands of the poor.  Every penny of every $50 loan is accounted for in financial records which are then audited regularly.  Every borrower has a pass book which details what they’ve received and paid.  And I know from first hand experience that even illiterate borrowers understand very clearly exactly what they’ve received, paid back and their outstanding balances.  It is much more difficult for governments and other middlemen to get in between the transactions and fraudulently steal money designated for the poor like what happens in most other charitable schemes.

As Mother Teresa would say (in paraphrase), “We talk a lot about the poor when we need to be talking to the poor.”