Supporting Entrepreneurship Vs. Giving it Away

Do you have an opinion on how you should spend your dollars to make a difference? There’s a debate raging on how to do it effectively, and It’s a shouting match with a lot of emotional players. Get in on the action below.

One side: Entrepreneurship is the poverty cure

Poverty Cure is working on promoting a new model fo aid distribution which falls very well in line with the social entrepreneurship movement and microfinance. It’s a clean, bold video. Primary criticism: Not everyone is born to be an entrepreneur. Also local businesses can’t touch bigger public health problems (and often exacerbate them).

Another side: Giving it away is good

Toms has made its rounds recently as a business model with teeth and impact, distributing over 1 million pairs of shoes to developing countries. Primary criticism:Lack of sustainability and destruction of local markets. You can imagine how local cobblers (or the shoe manufacturers in the previous video) might feel about the free shoe drops destroying local demand for their products.

The third side: DATA should help us make decisions.

A lot of this is conjecture and really really hard to scientifically test. One of my heroes, Esther Duflo of MIT’s Poverty Action Lab, has what I feel is a reasonable answer to this question while framing the debate in a smart and concise way. Just so you know - this is a talk and not a promo, but watch it.

(Click play, then click the timestamp 56:56 to find the video.)

Backed up here in an amazing book: Poor Economics

(Backed up here: http://www.povertyactionlab.org/publication/the-price-is-wrong)