What microfinance can teach economists

Economics is a meaningless subject," Muhammad Yunus, the Nobel Peace Prize winner, microfinance pioneer, and rogue economist told Time magazine a few months ago.

- ANTARA HALDAR

Little did he realise that he would soon have an opportunity to demonstrate what he meant. Following the ouster of Bangladesh's authoritarian Prime Minister, Sheikh Hasina, earlier this month, Mr Yunus was chosen to lead the country's caretaker government.

Founded in 1971 after a bloody war of independence, Bangladesh is an unlikely candidate to be a poster child for development, given its exploding population and acute vulnerability to natural disasters. Yet by the 1990s, it had a credible claim to this title. When many other developing countries were being suffocated by the neoliberal Washington Consensus, Bangladeshi figures like Mr Yunus (with his Grameen Bank) and Fazle Hasan Abed (the founder of the anti-poverty nonprofit BRAC) were leveraging a third tool beyond the state and the market: Civil society.

Working as a young development scholar in Bangladesh in the early 2000s, I witnessed these pioneering NGOs' early work firsthand. They sought solutions not on the blackboard but in the field, creating a global petri dish for innovations in development. As one of my interviewees put it, Bangladesh was "the Wall Street of development."