No free lunch

This is disappointing. From The Long Term Impacts of Grants on Poverty: 9-Year Evidence from Uganda's Youth Opportunities Program by Christopher Blattman, Nathan Fiala, and Sebastian Martinez.

There is a long tradition in economic development and political economics that the crucial difference between the haves and the have nots is simply access to capital. Give them an injection of capital (a once off shot or some sort of minimum basic income are two models.) The twenty or thirty year dalliance with micro-grants draws on this tradition as well.

The research suggesting that micro-grants don't have the benefits claimed has been accumulating over the past decade.

Now there is the above paper. From the Abstract:

In 2008, Uganda granted hundreds of small groups $400/person to help members start individual skilled trades. Four years on, an experimental evaluation found grants raised earnings by 38% (Blattman, Fiala, Martinez 2014). We return after 9 years to find these start-up grants acted more as a kick-start than a lift out of poverty. Grantees' investment leveled off; controls eventually increased their incomes through business and casual labor; and so both groups converged in employment, earnings, and consumption. Grants had lasting impacts on assets, skilled work, and possibly child health, but had little effect on mortality, fertility, health or education.

The initial assessments indicate a home run. Longer term assessment? Not so much. Those that got capital grants and those did not ended up with similar employment rates, income and consumption. Worth a try but apparently not much of a panacea.