Flexible standards for controlled empowerment? Microfinance as a case-study of aid management.

While theoretical economists are beginning to analyze opportunistic behavior within the aid industry, development practitioners themselves are preoccupied with how to combine sustainable poverty reduction with transfer of ownership over aid management. The starting point of this chapter is the general problem of helping: namely how help (including aid) can be used to promote self-help (empowerment). This problem is familiar at the state-donor level (e.g., Adam and Gunning, 2002) and at the interpersonal level (e.g., Cooke, 1997; Grammig, 2002). But much of the action takes place at the intermediate or interorganizational level. Here the most extensive (but often uncritical) literature relates to NGOs (e.g., Fowler, 2003). This chapter is also primarily concerned with this intermediate level, but closer to the interface between aid delivery and the private for-profit sector.