The World Until Yesterday is interesting, but far less compelling than Diamond’s masterpiece, Guns, Germs and Steel. Diamond’s goal is to learn lessons for our modern ways of being and interacting from “thousands of natural experiments in how to construct a human society”. These ‘natural experiments’ evolved in every corner of the globe before the rise of the first states about six thousand years ago. He calls these natural experiments ‘traditional’ societies.

Diamond’s focus is where his heart is – Papua New Guinea – and the book includes many personal stories. PNG includes many of the most traditional societies on earth. And modern human development there has been compressed Continue Reading »

DSCN1854 Saving Wood

Children playing in an Isabel village. Saving in wood (left).

In a 2002 speech Sir Dudley Tuti described as ‘quite tormenting’ the state of rural credit unions in the Solomon Islands. The Paramount Chief of Isabel Province, Sir Tuti had pioneered the national credit union movement two decades earlier. He had secured national legislation and formed the Solomon Islands Credit Union League (SICUL). By 1994 the SICUL reported 121 credit unions with 16,588 members: reaching almost a quarter of the nation’s households.

The Solomons are a natural laboratory for community-based finance: Continue Reading »

In The End of Money (see citation, last entry) David Wolman suggests that poor people may taste the ‘cashless’ (i.e. digital) society early on, due to a ‘leapfrog effect’ that has already delivered mobile phones to over a billion people without bank accounts – many living in villages which have yet to be reached by national road or electricity networks.

“Almost overnight the phone has evolved from a one-trick pony Continue Reading »

The cashless village: in a pre-cash village like this (Solomon Islands), value is not stored in currency. Villagers don’t depend on cash to exchange value, either.

In The End of Money: Counterfeiters, Preachers, Techies, Dreamers – and the Coming Cashless Society (Da Capo Press, Boston MA, 2012) David Wolman seeks not the end of money generally but specifically the end of paper cash – the sooner the better.


He spends a year living without cash – those germ-infested, cocaine-smudged notes – and Continue Reading »

A cluster of VSLAs in rural Rwanda. Clustering expands the market for governance, and enhances opportunities to ‘rewire’ networks.

The heart of VSLA is ‘time-limitation.’ The time-limitation feature is typically understood as an ‘action audit’ – a way for members to manage risk by giving them an opportunity to say “show me my money.”

A recent study of human cooperation[1] gives us a fresh look at time-limitation. There have been many doubts raised about cooperation: in particular due to the effect of so-called ‘free-riders,’ who exploit its benefits without contributing to its successes. However, Continue Reading »

If elite capture is such a serious threat, how was it dealt with during the microfinance revolution in Europe? F.W. Raiffeisen addressed this risk directly: he asked village elites to play leadership roles in the cooperatives – but to derive no material benefit from them.

In speeches he emphasized religious duties of charity and responsibility to community, and encouraged the villagers to elect leading individuals to the board, conditional on their character. Board positions received no compensation. Raiffeisen Continue Reading »

By 1979 only 61 of the 400 Comilla cooperatives were still functioning.  One observer attributes this result to four factors:  fraud/lack of internal controls, stagnation, diversion of funds, and ineffective external supervision. The central problem of fraud and weak controls “was possible not only because of individual dishonesty, but because the people were not made aware of their rights, and were not in a position to voice their rights (Aditee Nag Chowdhury, Let Grassroots Speak, p. 54).

Partly as a result of Dr. Khan’s experience, later Bangladeshi practitioners in microfinance, such as Dr. Muhammad Yunus and Fazle Hasan Abed, Continue Reading »