I voted very effective.
A "real" knife attack as seen where I am is most often executed as surpise, close range stabs in a very rapid succession (like a "shanking"). Our Aikido trains to deal with this pretty well, however this does not mean that one should preferably face a knife totally unarmed or empty handed either. If one gets ambushed from the back well... good luck, regardless of how well armed or trained you are.
For other knife attacks, where one is shown the knife as an intimidation tool before an attack, should be easier to deal with since the "ambush" element is gone. However imho these are not so common.
Alluding to Craig's post above, none of our pre-attack postures (whether dealing with a knife or not) start from hanmi, the preferable stance is mugamae or shizen hontai. In tanto randori this sort of "square" stance provides a lot of fast movement options in multiple directions and allows for quick adaptability while moving, assisting one to avoid being stabbed or struck with a blade.