Wednesday, October 18, 2006

Who's done more to lift people out of poverty? - Microfinance or WalMart

Greg Mankiw appproves of John Tierney's message. Tierney:
I don't want to begrudge the Nobel Peace Prize won last week by the Grameen Bank and its founder, Muhammad Yunus. They deserve it. The Grameen Bank has done more than the World Bank to help the poor, and Yunus has done more than Jimmy Carter or Bono or any philanthropist.

But has he done more good than someone who never got the prize: Sam Walton? Has any organization in the world lifted more people out of poverty than Wal-Mart?

The Grameen Bank is both an inspiration and a lesson in limits.
. . .
there's a limit to how much money villagers can make selling eggs to one another -- a thatched ceiling, as Michael Strong calls it. Strong, the head of Flow, a nonprofit group promoting entrepreneurship abroad, is a fan of the Grameen Bank, but he figures that villagers can lift themselves out of poverty much faster by getting a job in a factory.

The best way for third world villagers to tap ''the vast pipeline of wealth from the developed world,'' he argued in a recent article, is to sell their products to the world's largest retailer, Wal-Mart. Strong challenged anyone to name an organization that is doing more to alleviate third world poverty than Wal-Mart.

So far he's gotten a lot of angry responses from Wal-Mart's critics, but nobody has come up with a convincing nomination for a more effective antipoverty organization.
UPDATE: More at Cafe Hayek.



Blogger DG said...

Comparing Walmart with Grameen Bank is funny.

In my opinion, whenever Big Fish enter the business scene of any city, they gradually wipe out the small traders. Go to any small retailer in Dubai & ask him about his revenue compared to pre-carrefour & shopping malls era, he will reply in negative. It is like one Big guy geting richer at the expense of smaller guys.

8:30 AM  
Blogger Brn said...


It may be true that small businesses are hurt by bigger stores, but ask the customers which ones give them better prices and more selection. Those little guys are much better off shopping in stores like Carrefour or Walmart.

Also, consider the real little guys, the employees. Who do you reckon makes out better, Walmart's employees or the employees are the tiny grocery store on the corner?

6:40 PM  

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