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As Nobel Prize winner Amartya Sen has argued “[Bangladesh’s development achievements have] important lessons for other countries across the globe, [in particular a focus on] reducing gender inequality”. A major avenue through which this emphasis has been manifest lies, according to this narrative, in enhancements to women’s agency for instrumental and intrinsic reasons particularly through innovations in family planning and microfinance. The “Bangladesh paradox” of improved wellbeing despite low economic growth over the last four decades is claimed as a paradigmatic case of the spread of both modern family planning programmes and microfinance leading to women’s empowerment and fertility reduction. In this paper we show that the links between microfinance, empowerment and fertility reduction, are fraught with problems, and far from robust; hence the claimed causal links between microfinance and family planning via women’s empowerment needs to be further reconsidered. [ABSTRACT FROM PUBLISHER]

We reply to the discussion and criticisms of Matthieu Chemin (MC) and Mark Pitt (MP) to our paper ((Duvendack and Palmer-Jones (DPJ)) (all this issue). MC clarifies many issues which now make replication pure probable (but not yet achieved), and MP identifies a number of problems with DPJ (some of which are shared with Chemin, 2008). Chemin (2008) made at least one crucial undocumented and unrealistic assumption, and did not document many of his variable constructions. MP correctly identifies inappropriate members of control groups, and other problems, but his claim that his propensity score matching (PSM) results provide support for Pitt and Khandker's (1998 – PnK) most important claim is misleading as it is not robust. We see no reason to change our conclusion that PnK is limited as an evaluation of microfinance by a weak research design which cannot be convincingly mitigated by the sophisticated methods used in PnK, or by PSM. [ABSTRACT FROM PUBLISHER]

Recently, microfinance has come under increasing criticism raising questions of the validity of iconic studies which have justified it, such as Pitt and Khandker. Chemin applied propensity score matching to the Pitt and Khandker data, finding different impacts, but does not disaggregate by gender of borrower. We first replicate Chemin and extend his analysis in two ways. We test the robustness of propensity score matching results to selection on unobservables using sensitivity analysis, and we investigate propensity score matching estimates of impacts by gender of borrowers. The mainly insignificant impacts of microfinance differ greatly by gender of borrower, but are all vulnerable to selection on unobservables. We are therefore not convinced that the relationships between microfinance and outcomes are causal with these data. [ABSTRACT FROM PUBLISHER]