Can Consultants Improve Small Firms?

(Photo: David Cameron)

A few months ago I ran a contest here at Freakonomics (results here) to predict the outcome of a randomized trial on charitable giving.

Although we are long way from realization (and it may be a pipe dream), the idea is simple: imagine a market on results from research studies. This could help not just hold people accountable for their ex-ante stated views, but also serve as a guiding tool for investors, practitioners, policymakers and donors, to help make decisions and allocate resources using the collective wisdom of markets. Of course this requires liquidity, and a certain faith in markets. Anyhow, until that dream comes true, we are doing this the simple way: running contests!

Here is the question: many NGOs and some “social enterprises” try to improve enterprises, from micro to small to medium, by providing training or consulting services. There is a wide spectrum of what this actually means. We ran two randomized trials with two such programs: one for micro firms (tailors in Ghana) with a major international accounting and consulting firm, and one for small and medium firms (many sectors, in Mexico) with a collection of local consultants.

Which one worked better? For more on this, and the central differences in the programs, and a chance to win a contest, please check out Annie Duflo and my article in the Stanford Social Innovation Review. Results will be published in the summer print issue.

Ben Rickl

I just listened to the Dilbert Index podcast. I may be missing the point completely when companies with people that back into their parking spaces have low morale.

I worked in the oil field in Wyoming and we were required to back into our parking places for safety. I know my personal morale was low as I was treated poorly. I do however remember many people showing up to work as early as they could and leave as late as they could stay.

.Eric M. Jones

Your inquiry regarding "Can Consultants Improve Small Firms" is an interesting one that I am certain we can study and come up with an actionable conclusion that will benefit your firm.

Our reasonable consulting rates are just $7,500/day with a minimum of 200 working days (day being defined as work more than two hours, including transit time). First class transportation, lodging, meals, snacks, gratuities, entertainment and other necessary expenses, will, of course, be billed to your firm.

Please sign the attached contract and initial the liability wavers and we would be pleased to begin on Tuesday of next week.

Sincerely yours,
Eric M. Jones


I am interested in seeing the results in the summer issue. Will you post these on your blog? Can you please email them to me?

IT Consultants

Thanks for sharing your thoughts......