THE PRICE OF A DREAM: The Story of the Grameen Bank, and the Idea That Is Helping the Poor to Change Their Lives.

A real page turner on economic development? Unlikely as it may sound, that is exactly what Bornstein, a free-lance journalist, has produced. His subject, the Grameen Bank, was founded by an irrepressible economics professor from Bangladesh named Muhammed Yunus. Educated at Vanderbilt University, Yunus was teaching at Chittagong University in his native country in 1976 when he first got the idea that the poor remain poor because they have no access to the resources that would enable them to improve their lot— they can’t get there from here. So, beginning with the impoverished residents of a nearby village, Yunus began practicing "capitalism with a social conscience."

Yunus’s idea was to jump-start the development process by making "micro-loans" of $10, $25, or $50 to landless or near-landless peasants. Borrowers formed teams of five for the purpose of mutually guaranteeing the loans taken out by each. If any member defaulted, no other member of that team could ever again receive a loan from the Grameen Bank. Peer pressure did the rest. The borrowers used the money to establish themselves as peddlers, vegetable gardeners, seamstresses, or dairy farmers. More than 90 percent of the borrowers were women, because their poverty is most acute and they are the primary providers of care to children. The idea worked astonishingly well. By 1995, the Grameen Bank had two million borrowers in Bangladesh and 90 percent of its stock was held by borrowers (who are required to buy shares). While still dependent on donors, the bank is close to self-sustaining.

What’s missing from Bornstein’s otherwise fine reporting is a sense of the broader institutional arrangements in the Bangladeshi economy. He mentions corruption in passing, but he neglects the vital issue, so pertinently raised by the Peruvian economist Hernando de Soto, of how government corruption and overregulation stunt the growth of grassroots entrepreneurship. The tough question is whether Grameen Bank borrowers will graduate from microenterprise into fully legal business operations, or whether they will be driven by bureaucratic red tape into the vast "informal economy."

Despite such gaps in his story, Bornstein makes it dramatically clear that the Grameen Bank has pioneered a far better way to help the poor than the massive, topdown schemes so long favored by the World Bank and other international development agencies. Already, several countries, including Chile, are attempting to replicate the bank’s success. Bornstein’s superb account may drum up even more business for Muhammed Yunus’s excellent idea.