Evaluations of Microenterprise Programs in the United States

Publication Date: 1999
Published by: Microfinance.com
Document Type: Paper (PDF)

View this Document (106 KB)   Email this Document

Evaluation of MEPs abroad and suggestions on how to improve the evaluation of MEPs in the United States

Microenterprise programs (MEPs) help the poor, the unemployed, and those on welfare to start small firms

While public and private support for MEPs has grown very fast, little is known about whether MEPs are in fact a good use of scarce funds

The conclusions of most evaluations of MEPs in the United States do not follow from measurement nor from explicit assumptions

At the most basic level, an evaluation is a cost-benefit analysis. While neither benefits nor costs can be measured completely nor with complete certainty, rigorous evaluations support subjective judgements with logical discussion and explicit assumptions

As a minimum, evaluations should compare costs with outputs

Highlights that evaluations of MEPs in the United States have yet to show whether MEPs are worthwhile uses of scarce funds budgeted to help the poor

If MEPs are a good way to help the poor, then the case should withstand rigorous analysis. If a MEP is still too young to post good results, then the evaluation should note that and then argue whether the MEP is likely to improve fast enough to become worthwhile

Remarks how weak analysis can hurt the poor:

• It distracts effort from questions whose answers could improve performance. Failure is often a better teacher than success;
• The lack of feedback inspires complacency and so dampens the push to improve;
• Better measurement might improve the day-a-day management of MEPs. If managers do not know the level of performance, then they are unlikely to try to improve it;
• Weak evaluations may spark unwarranted public support for MEPs