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I hate to say “I said so”, and I know it’s horrible style. But sorry, this issue is too important to be ignored. My fears about the credit crunch and microfinance are being confirmed. 

The current economic crisis threatens to set back development and poverty reduction by years. Who coul really be surprised? In a globalised world, when Wall Street sneezes, everyone else catches the Flu. Read the rest of this entry »

In theory, copyright first and foremost belongs to the creator of any new work. In practice, creators are often forced to give up their copyright completely. Most researchers, for example, who need to publish in high impact journals have hardly any choice but handing over it their copyright to journal publishers. Or, Musicians cannot exclude some of their works from the terms of their copyright collectives to publish them under alternative licenses. By joining a collecting society like the German GEMA you trade certain parts of your copyright for the right to receive royalty payments. GEMA’s terms of service, however, are non-negotiable for individual musicians: like it or leave it. (see “Competition for Copyright Collectives“).

In many sectoral contexts private copyright regimes more or less completely replace the logic of (inter-)national copyright legislation.  Mostly this is due to private standardization and respective network effects: if the individual benefits of adopting a standard depend on the total number of adopters,  “exit” is not an option. People dissatisfied with such a private copyright regime are only left with the possibility of “voice”, thereby revealing the inherently political nature of private copyright regulation. Read the rest of this entry »

How can you win small and medium sized companies to take responsibility for their suppliers in China? Each year, this topic is brought up at the international toy fair by civil society organisations and the international toy association.

The challenge seems tremendous:  Big companies who source in developing countries usually establishe a whole department or CSR team, whereas smaller companies lack the capacity at home as well as the buying power abroad to influence factory behaviour.  Therefore it is even more surprising, that the toy industry, with a high share of medium sized enterprises has established an international, industry wide approach – But how do you get companies to join? Read the rest of this entry »

Since the beginning, proponents of microcredit have argued that they have found a self-sustaining, profitable route to reducing poverty: borrowers repay loans with enough interest to cover the costs plus an increase in the bank’s capital base, plus a payout for its owners. Sceptics of this story point to the fact that most microcredit programmes are still subsidised by donors. They argue that this is because many borrowers cannot afford to repay so dearly, and that the cost of capital should be lower in order to help more and poorer people.

Welcome to the ‘sustainability versus outreach’ debate. At the core, it is about the question whether incentives or impact matter more. Time to examine the arguments. Read the rest of this entry »

“It is difficult to make predictions, especially about the future.”
(Karl Valentin and others)

Not so long ago, the monopolistic concept of musician’s copyright collective like the German GEMA or the British PRS seemed to last forever. Even in countries with more than only one copyright collective like the US (e.g. BMI, ASCP) membership is exclusive and all-encompassing, meaning that an artist is not allowed to license only some works differently.

Yet, jamendo’s recently launched service jamendo pro might prove that forever was yesterday. Jamendo is an aggregator of Creative Commons (CC) licensed music. Commercial revenue is shared equally between jamendo and the artists, non-commercial use is free. In spite of the collecting societies’ prohibition of any open content licensing such as CC, the back catalogue of Jamendo consists of already more than 15.000 albums. Read the rest of this entry »

Credit is a useful lever for helping businesses grow. Many poor people in the developing world are self-employed farmers or petty traders, so technically they can be conceived of as businesspeople. But most farmers are actually subsistence farmers, working not for the market but for their own family’s meals, and many traders are simply traders for lack of a better alternative of stable, paid employment. They resiliently eke a meagre living out of their harsh surroundings, and truly deserve admiration by comfortable Westerners. But does that necessarily warrant them being treated as Schumpeterian entrepreneurs, willing and able to “creatively destroy” their traditional economic environments, if only they were lent the necessary finance?

We should keep in mind that people are incredibly diverse, and this must be taken into account and respected when formulating development policies. One-size-fits-all approaches have repeatedly failed in development history, and serve as a warning. Read the rest of this entry »

In the popular literature surrounding microcredit (or microfinance), a number of claims is repeatedly made which deserve a closer look. The mass media are full of heartwarming stories, anecdotes and PR-like representations of MFIs’ work, showing the apparent power of microcredit to improve the lives of the poorer inhabitants of this planet. In fact, many academic productions make similar claims without providing sufficient evidence to back them up.

In this way, the impression is being created that the development industry has found a panacea for poverty; a dangerous insinuation which can only lead to disappointment. Over my next few blog entries I will address and critically illuminate some myths – insufficiently supported claims or untested assumptions – which currently stand in the way of a balanced assessment of the true powers and drawbacks of microcredit as a development tool.


The Book

Governance across borders: transnational fields and transversal themes. Leonhard Dobusch, Philip Mader and Sigrid Quack (eds.), 2013, epubli publishers.
February 2009

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