Week of January 30, 2017

1. Cashlessness: I continue to be amused that the most commonly written about and discussed issues in the field seem to be "more cash" and "less cash"--and those aren't actually opposing view points. Here's a piece critiquing the "less cash" arguments using the classic Baptists and Bootleggers lens. I remain puzzled that there isn't (even here) more discussion of the increased coercive power cashlessness would provide governments, which is something it appears a lot more people are starting to worry about in other domains. Here's a reading list on one of the arguments for cashlessness that I am least familiar with: how it enables more (and more effective?) monetary policy options. And here's an overview of the possibility of a universal basic (cash) income in India, plausible because of India's progress away from cash, including speculation about Gandhi's attitude about UBI. Meanwhile, Peru is making progress in building the infrastructure for ubiquitous digital payments, but adoption is concentrated among the urban and already banked. To summarize, I fall back to paraphrasing James Scott, "Underbanked is a strategy, not a condition."

2. Digitization: Digitization isn't all about digital payments. A start-up in Chicago is focused on digitizing the process for applying for food stamps. On it's face, it appears to be quite similar to Propel, a somewhat older start-up in New York. I wish much success to both. Interestingly, though, the above discussion of UBI in India contemplates one of the ways to keep program costs under control is to make it time-consuming to certify access so that only the truly needy take the time. It's a reminder, in the spirit of Bootleggers and Baptists, that difficulty in accessing public benefits is often a feature, not a bug.

3. Conspicuous Consumption (Is A Hell of A Drug): Conspicuous consumption is usually thought of as a feature of the spending choices of the wealthier tiers of society. Here's a new paper from Bellet and Sihra examining conspicuous consumption among the poorest in India finding that where inequality is greater, the poorest households substitute toward more visible spending and away from basic necessities like nutritious food. Here's one of the foundational pieces on spending patterns of poor households, The Economic Lives of the Poor, just because if you haven't read it, you should.  

4. QTWTAIN: Perhaps this will become a regular feature of the faiV. (For those of you with better things to do than spend hours on social media, that's "Questions To Which the Answer is No.") Three items this week: "Did a massive reduction in immigrant Mexican laborers in the United States raise wages or employment levels for native-born?", 2) "Does bribery in health care worker hiring necessarily lead to sub-optimal outcomes when access to education is highly unequal?", and 3) "Are public sector workers bystanders in the coalition of forces limiting housing supply?


5. Social Investing: Social investing is hard. That's sub-text of my recent piece on investing in microcredit and NextBillion's recent look at microfinance IPOs. Most often the focus is on balancing financial and social returns. But there's also a challenge in thinking through the various forms of delivering social finance and the implications that come along with them, and the needs of social investors at scale to manage an overall investment portfolio. In a recent piece for Stanford Social Investment Review, Root Capital discusses it's evolving tools for tackling these challenges. If you're interested in these questions, you should check out the Video of the Week, below.

The Centre for European Research in Microfinance at ULB has just launched a MOOC on the commercialization of social enterprise, which draws on the lessons of the microfinance industry. It's free and begins February 27th. Contributors include Paul Collier, Johanna Mair, Dan Rozas and FAI's own Jonathan Morduch. Register here.

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