SABIIA - Sistema Aberto e Integrado de Informação em Agricultura (Sabiia)

Morten, Melanie; Karlan, Dean S.; Zinman, Jonathan.

We worked with two microlenders to test impacts of randomly assigned reminders for loan repayments in the “text messaging capital of the world”. We do not find strong evidence that loss versus gain framing or messaging timing matter. Messages only robustly improve repayment when they include the loan officer’s name. This effect holds for clients serviced by the loan officer previously but not for first-time borrowers. Taken together, the results highlight the potential and limits of communications technology for mitigating moral hazard, and suggest that personal obligation/reciprocity between borrowers and bank employees can be harnessed to help overcome market failures.

Tipo: Working Paper

Palavras-chave: Microcredit; Microfinance; Randomized evaluation; Development finance; Consumer/Household Economics; Financial Economics; Research and Development/Tech Change/Emerging Technologies; D21; D92; G21; O16; O17.

Ano: 2012

URL: http://purl.umn.edu/121867

Aid, Governance, and Private Foreign Investment: Some Puzzling Findings and a Possible Explanation

Harms, Philipp; Lutz, Matthias.

Does official aid pave the road for private foreign investment or does it suffocate private initiative by diverting resources towards unproductive activities? In this paper we explore this question using data for a large number of developing and emerging economies. Controlling for countries' institutional environment, we find that, evaluated at the mean, the marginal effect of aid on private foreign investment is close to zero. Surprisingly, however, the effect is strictly positive for countries in which private agents face a substantial regulatory burden. After testing the robustness of this result, we offer a theoretical model that is able to rationalize our puzzling observation.

Consumption Growth in a Booming Economy: Taiwan 1976-96

Palavras-chave: Aid; Foreign Direct Investment; Institutions; International Relations/Trade; F35; F21; O16; O19.

Ano: 2003

URL: http://purl.umn.edu/26128

McKenzie, David.

Consumption and income have both grown rapidly in Taiwan over the past forty years, with younger birth cohorts experiencing faster growth. The long upward trend in consumption presents a strong challenge to the consumption smoothing predictions of the Permanent Income Hypothesis. We investigate the extent to which consumption theory can account for this trend in an environment where a large majority of households have high savings rates. Household survey data from 1976-96 are used to estimate dynamic pseudo-panel models with inter-cohort heterogeneity. We evaluate the impacts on consumption of migration, mortality, household composition, liquidity constraints, unanticipated aggregate shocks, hyperbolic discounting, habit formation and precautionary saving....

Consumption Smoothing? Livestock, Insurance and Drought in Rural Burkina Faso

Palavras-chave: Consumption growth; Pseudo-panel; Prudence; Taiwan; International Development; O12; O16; E21; C23.

Ano: 2001

URL: http://purl.umn.edu/28398

Kazianga, Harounan; Udry, Christopher R..

This paper explores the extent of consumption smoothing between 1981 and 1985 in rural Burkina Faso. In particular, we examine the extent to which livestock, grain storage and interhousehold transfers are used to smooth consumption against income risk. The survey coincided with a period of severe drought, so that the results provide direct evidence on the effectiveness of these various insurance mechanisms when they are the most needed. We find evidence of little consumption smoothing. In particular, there is almost no risk sharing, and households rely almost exclusively on self-insurance in the form of adjustments to grain stocks to smooth out consumption. The outcome, however is far from complete smoothing. Hence the main risk-coping strategies, which...

Creating Incentives for Micro-Credit Agents to Lend to the Poor

Palavras-chave: Livestock; Consumption smoothing; Permanent income hypothesis; Precautionary saving; Risk sharing; Risk and Uncertainty; D91; O16.

Ano: 2004

URL: http://purl.umn.edu/28497

Aubert, Cecile; de Janvry, Alain; Sadoulet, Elisabeth.

Microfinance institutions (MFIs) have introduced incentive pay schemes for their credit agents to induce information acquisition on borrowers. Bonuses linked to repayment are efficient for profit-oriented MFIs but insufficient for nonprofit MFIs trying to reach very poor borrowers, when repayment and wealth are positively correlated. We show that no incentive scheme is consistent with this (non-verifiable) objective: Random audits on the share of very poor borrowers selected by the agent become necessary. Under the optimal contract, non-profit MFIs generally maximize the number of poor borrowers it services by crosssubsidization between very poor and less poor borrowers.

Examining the dimensions of governance that are relevant for private investment

Palavras-chave: Micro-credit; Pro-poor; Objectives; Incentives; Financial Economics; Food Security and Poverty; O16; D82; L31..

Ano: 2004

URL: http://purl.umn.edu/25024

Vu Le, Quan; Rishi, Meenakshi.

Which types of governance indicators matter the most for private investment? This short paper answers the question by examining the impact of specific governance indicators on private investment in a cross-section of developing economies. Results indicate that an effective government that includes competent and independent civil service and credible governmental policies are positively associated with private investment. Fair and predictable rules of the game that determine the extent to which property rights are protected also facilitate greater private investment. Based on this the paper concludes that since some indicators of governance matter more than others, targeted institutional reform that focuses first on the significant dimensions may be key to...

Tipo: Journal Article

Palavras-chave: Private investment; Governance; Developing economies.; International Development; Public Economics; E02; E22; O16.

Ano: 2010

URL: http://purl.umn.edu/95914

Formal credit institutions in agriculture of Kazakhstan (micro-econometric analysis)

Gaisina, Sholpan.

The financing of agricultural producers is one of the most acute problems along the entire scope of economic reforms in Kazakhstan. The issue is: What kind of financial sources could maintain the development of agricultural production? Internal sources such as profit, depreciation capital, and various reserve and insurance funds can not be considered as a key financial base. State financial support of agriculture in Kazakhstan (which plays a significant role in the most developed countries), is episodic in nature, small in size and typically does not reach the recipients. In these circumstances, a potential supplier of financial and investment resources could be a banking system and such non-banking credit institutions as credit cooperatives....

Global Food Price Volatility and Spikes: An Overview of Costs, Causes, and Solutions

Palavras-chave: Agricultural finance; Credit rationing; Micro-econometrics analysis; Agricultural and Food Policy; Institutional and Behavioral Economics; Political Economy; G21; O16; Q 14.

Ano: 2010

URL: http://purl.umn.edu/90801

von Braun, Joachim; Tadesse, Getaw.

Since the 2007–08 food crisis, many thoughtful analyses have addressed the causes and impacts of high and volatile international food prices and proposed solutions to the crisis. These studies have covered global as well as local food price dynamics and policy reactions. The food price problem is, however, far-reaching, and its impacts are wide and interrelated. The price formation mechanism has become highly complex and dynamic. Policy actions are politically and economically sensitive. This situation calls for continuous and comprehensive assessments of the problem to provide timely and evidence-based knowledge for policy makers. This paper reviews existing evidence and theories and presents new thoughts and insights from analyses to enlighten the course...

Tipo: Working Paper

Palavras-chave: Food security; Prices; Volatility; Poverty; Food policy; Speculation; Economic crises; Agricultural and Food Policy; Agricultural Finance; Community/Rural/Urban Development; Food Security and Poverty; Land Economics/Use; Production Economics; I38; O13; O16; Q11; Q18.

Ano: 2012

URL: http://purl.umn.edu/120021

Group versus Individual Liability: Long Term Evidence from Philippine Microcredit Lending Groups

Gine, Xavier; Karlan, Dean.

Group liability in microcredit purports to improve repayment rates through peer screening, monitoring, and enforcement. However, it may create excessive pressure, and discourage reliable clients from borrowing. Two randomized trials tested the overall effect, as well as specific mechanisms. The first removed group liability from pre-existing groups and the second randomly assigned villages to either group or individual liability loans. In both, groups still held weekly meetings. We find no increase in default and larger groups after three years in pre-existing areas, and no change in default but fewer groups created after two years in the expansion areas.

Tipo: Working Paper

Palavras-chave: Microfinance; Group lending; Group liability; Joint liability; Social capital; Micro-enterprises; Informal economies; Access to finance; Consumer/Household Economics; Financial Economics; Institutional and Behavioral Economics; International Development; C93; D71; D82; D91; G21; O12; O16; O17.

Ano: 2009

URL: http://purl.umn.edu/229136

Group versus Individual Liability: Long Term Evidence from Philippine Microcredit Lending Groups

Gine, Xavier; Karlan, Dean S..

How Costly are (Agricultural) Investments during Economic Transition? A Critical Literature Appraisal

Palavras-chave: Microfinance; Group lending; Group liability; Joint liability; Social capital; Microenterprises; Informal economies; Access to finance; Consumer/Household Economics; Financial Economics; Institutional and Behavioral Economics; International Development; C93; D71; D82; D91; G21; O12; O16; O17.

Ano: 2009

URL: http://purl.umn.edu/50951

Zinych, Nataliya; Odening, Martin.

Investment theory

How Rising Competition Among Microfinance Lenders Affects Incumbent Village Banks

Palavras-chave: Investment; Transition; Credit constraints; Soft budget constraints; Agricultural Finance; Financial Economics; O16; Q14; P23.

Ano: 2009

URL: http://purl.umn.edu/50319

McIntosh, Craig; de Janvry, Alain; Sadoulet, Elisabeth.

This paper uses data from Uganda's largest incumbent microfinance institution to analyze the impact of entry by competing lenders on client behavior. We first examine the geographic placement decisions of competitors, and find that placement decisions are strongly affected by district-level characteristics. We observe that increased competition induces a decline in repayment performance and in savings deposited with the incumbent Village Bank, suggesting multiple loan-taking by clients. Urban clients take multiple loans primarily from lenders with more individual methodologies, while rural clients borrow from several group lenders. Individuals who operate larger businesses are the ones most likely to leave the incumbent Village Bank when a Solidarity Group...

Informal Finance: A Theory of Moneylenders

Palavras-chave: Microfinance; Competition; Credit markets; Financial Economics; O16; D14; L1.

Ano: 2003

URL: http://purl.umn.edu/25073

Madestam, Andreas.

I study the coexistence of formal and informal finance in underdeveloped credit markets. While weak institutions constrain formal banks, shallow pockets hamper informal lenders. In such economies, informal finance has two effects. By increasing the investment return it decreases borrowers’ relative payoff following default, inducing banks to lend more liberally (disciplinary effect). By channeling bank capital it reduces banks’ agency costs from lending directly to borrowers, limiting banks’ extension of borrower credit (rent-extraction effect). Among other things, the model shows that informal interest rates are higher, borrower welfare lower, and informal finance more prevalent when the rent-extraction effect prevails, consistent with stylized facts in...

Infrastructure in developing countries: An overview of some economic issues

Palavras-chave: Credit Markets; Financial Development; Institutions; Market Structure; Financial Economics; O12; O16; O17; D40.

Ano: 2009

URL: http://purl.umn.edu/54288

Dethier, Jean-Jacques; Moore, Alexander.

This paper surveys the main issues and controversies in the economic literature on infrastructure in developing countries. Section I reviews the evidence on the role of infrastructure in promoting economic growth. It is argued that, although infrastructure may be more important for growth than other types of capital, the exact size and form of its effect is less clear than is often assumed. Section II looks at the issue of infrastructure “needs”, estimates of which are pervasive in both the academic and policy literature. It is argued that the preoccupation with such estimates is largely misplaced. More crucial is to develop systems of infrastructure enabling competition through an appropriate market structure. Therefore, section III reviews the economic...

Tipo: Working Paper

Palavras-chave: Infrastructure; Developing Countries; Economic Growth; Regulation; Community/Rural/Urban Development; Institutional and Behavioral Economics; L9; L16; O16; O2.

Ano: 2012

URL: http://purl.umn.edu/123305

Is There Surplus Labor in Rural India?

Foster, Andrew D.; Rosenzweig, Mark R..

We show empirically using panel data at the plot and farm level and based on a model incorporating supervision costs, risk, credit-market imperfections and scale-economies associated with mechanization that small-scale farming is inefficient in India. Larger farms are more profitable per acre, more mechanized, less constrained in input use after bad shocks, and employ less per-acre labor than small farms. Based on our structural estimates of the effects of farm size on labor use and the distribution of Indian landholdings, we estimate that over 20% of the Indian agricultural labor force is surplus if minimum farm scale is 20 acres.

Micro-Savings & Informal Insurance in Villages: A Field Experiment on Indirect Effects of Financial Deepening on Safety Nets of the Poor

Palavras-chave: Agriculture; India; Scale; Profits; Labor; Tractors; Agricultural and Food Policy; Agricultural Finance; Crop Production/Industries; International Development; Land Economics/Use; Production Economics; Productivity Analysis; Risk and Uncertainty; O13; O16; O53.

Ano: 2010

URL: http://purl.umn.edu/95273

Flory, Jeffrey A..

Replaced with revised version of paper 07/28/11. Former title: Indirect Effects of Microfinance: A Field Experiment on Formal Savings Expansion and Informal Safety Nets of the Ultra-Poor

Monitoring Managers: Does it Matter?

Palavras-chave: Microfinance; Formal savings; Indirect effects; Safety nets; Poverty; Food security; Agricultural Finance; Community/Rural/Urban Development; Financial Economics; Food Security and Poverty; Health Economics and Policy; Institutional and Behavioral Economics; International Development; O17; O16; O12; I30; I38; I10.

Ano: 2011

URL: http://purl.umn.edu/103905

Cornelli, Francesca; Kominek, Zbigniew; Ljungqvist, Alexander.

We test under what circumstances boards discipline managers and whether such interventions improve performance. We exploit exogenous variation due to the staggered adoption of corporate governance laws in formerly Communist countries coupled with detailed ‘hard’ information about the board’s performance expectations and ‘soft’ information about board and CEO actions and the board’s beliefs about CEO competence in 473 mostly private-sector companies backed by private equity funds between 1993 and 2008. We find that CEOs are fired when the company underperforms relative to the board’s expectations, suggesting that boards use performance to update their beliefs. CEOs are especially likely to be fired when evidence has mounted that they are incompetent and...

NGO Microfinance in Vietnam: Stakeholders' Perceptions of Effectiveness

Palavras-chave: Corporate Governance; Large Shareholders; Boards of Directors; CEO Turnover; Legal Reforms; Transition Economies; Private Equity; Financial Economics; G34; G24; G32; K22; O16; P21.

Ano: 2010

URL: http://purl.umn.edu/60665

Nghiem, Son; Laurenceson, James.

The microfinance industry in Vietnam, particularly those sponsored by nongovernment organisations (NGOs), has experienced rapid expansion in recent years. Yet in spite of this growth, an analysis of their effectiveness has been lacking. In a bid to help address this shortcoming, this paper reports on a subset of data that was obtained during a survey and interview process that incorporated various stakeholders including financial donors, NGO-sponsored microfinance institutions (NMPs), village leaders and NMP members and non-members. Perceptions of NMPs effectiveness are discussed from the standpoint of various stakeholders. NMPs are found to be at a critical juncture. While their activities are widely perceived to contribute to poverty alleviation, their...

Ownership and Control in the Entrepreneurial Firm: An International History of Private Limited Companies

Palavras-chave: Microfinance; NGO; Vietnam; Perceptions; Effectiveness; Financial Economics; O12; O16; O17; P34; R29.

Ano: 2006

URL: http://purl.umn.edu/25594

Guinnane, Timothy W.; Harris, Ron; Lamoreaux, Naomi R.; Rosenthal, Jean-Laurent.

We use the history of private limited liability companies (PLLCs) to challenge two pervasive assumptions in the literature: (1) Anglo-American legal institutions were better for economic development than continental Europe’s civil-law institutions; and (2) the corporation was the superior form of business organization. Data on the number and types of firms organized in France, Germany, the UK, and the US show that that the PLLC became the form of choice for small- and medium-size enterprises wherever and whenever it was introduced. The PLLC’s key advantage was its flexible internal governance rules that allowed its users to limit the threat of untimely dissolution inherent in partnerships without taking on the full danger of minority oppression that the...

Rural Financial Markets in Developing Countries

Palavras-chave: Limited company; Partnership; Corporation; Legal regime; Common law; Civil law; Financial Economics; N8; G3; O16; K22.

Ano: 2007

URL: http://purl.umn.edu/6879

Conning, Jonathan; Udry, Christopher R..

This review examines portions of the vast literature on rural financial markets and household behavior in the face of risk and uncertainty. We place particular emphasis on studying the important role of financial intermediaries, competition and regulation in shaping the changing structure and organization of rural markets, rather than on household strategies and bilateral contracting. Our goal is to provide a framework within which the evolution of financial intermediation in rural economies can be understood.