There is a disconnect between academic economists’ search for individual mechanisms that constrain firm growth and the more complex reality facing firms and policymakers aiming to alleviate these constraints. The comprehensive, some would say scattershot, approaches that are common in practice are considered challenging for evaluators because of the difficulty in identifying any particular causal mechanism. More targeted attempts to improve business performance typically generate mixed performance (McKenzie and Woodruff 2012) or do not seem to scale either in the market or with public support. With that in mind, we partnered with the Asian Institute of Management (AIM), a leading Philippine business school, to launch a classbased program that had MBA students providing consulting services for local small and medium enterprises.
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May 01, 2015
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We implement a randomized experiment offering Salvadoran migrants matching funds for educational remittances, which are channeled directly to a beneficiary student in El Salvador chosen by the migrant. The matches lead to increased educational expenditures, higher private school attendance, and lower labor supply of youths in El Salvador households connected to migrant study participants. We find substantial “crowd-in” of educational investments: for each $1 received by beneficiaries, educational expenditures increase by $3.72. We find no shifting of expenditures away from other students, and no effect on remittances.
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April 30, 2015
English
Farmers may grow crops for local consumption despite more profitable export options. DrumNet, a Kenyan NGO that helps small farmers adopt and market export crops, conducted a randomized trial to evaluate its impact. DrumNet services increased production of export crops and lowered marketing costs, leading to a 32% income gain for new adopters. The services collapsed one year later when the exporter stopped buying from DrumNet because farmers could not meet new EU production requirements. Farmers sold to other middlemen and defaulted on their loans from DrumNet. Such experiences may explain why farmers are less likely to adopt export crops.
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April 29, 2015
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Poor sanitation contributes to morbidity and mortality in the developing world, but there is disagreement on what policies can increase sanitation coverage. To measure the effects of alternative policies on investment in hygienic latrines, we assigned 380 communities in rural Bangladesh to different marketing treatments—community motivation and information; subsidies; a supply-side market access intervention; and a control—in a cluster-randomized trial. Community motivation alone did not increase hygienic latrine ownership (+1.6 percentage points, P = 0.43), nor did the supply-side intervention (+0.3 percentage points, P = 0.90). Subsidies to the majority of the landless poor increased ownership among subsidized households (+22.0 percentage points, P < 0.001) and their unsubsidized neighbors (+8.5 percentage points, P = 0.001), which suggests that investment decisions are interlinked across neighbors. Subsidies also reduced open defecation by 14 percentage points (P < 0.001).
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April 20, 2015
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This paper studies the response of poor rural households in rural Kenya to large temporary income changes. Using a randomized controlled trial, households were randomly assigned to receive unconditional cash transfers of at least USD 404 from the NGO GiveDirectly. We designed the experiment to address several long-standing questions in the economics literature: what is the shape of households’ Engel curves? Do household members effectively pool income? Are there constraints to savings? Do transfers generate externalities? In addition, we study in detail the effects of transfers on psychological well-being and levels of the stress hormone cortisol. We randomized at both the village and household levels; further, within the treatment group, we randomized recipient gender (wife vs. husband), transfer timing (lump-sum transfer vs. monthly installments over 9 months), and transfer magnitude (USD 404 vs. USD 1,520). We find a strong consumption response to transfers, with an increase in mont...
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Working Paper
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April 20, 2015
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Behavioral therapy with cash grants led to significant fall in crime, drug use, and violence among high-risk urban men.
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Brief
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April 14, 2015
English
While there is a fast-growing policy interest in offering financial products to help rural households manage risk, the literature is still scant as to which products are the most effective. In order to inform gender targeting of rural finance policy, this paper investigates which financial products best improve farmers’ productivity, resilience, and welfare, and whether benefits affect men and women equally. Using a randomized field experiment in Senegal and Burkina Faso, we compare male and female farmers who are offered index-based agricultural insurance with those who are offered a variety of savings instruments. We found that female farm managers were less likely to purchase agricultural insurance and more likely to invest in savings for emergencies, even when we controlled for access to informal insurance and differences in crop choice. We hypothesize that this difference results from the fact that although men and women are equally exposed to yield risk, women face additional...
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April 14, 2015
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The Teacher Community Assistant Initiative, which provided targeted instruction in basic skills to small groups of low-performing students, significantly increased student learning in Ghana.
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Brief
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April 01, 2015
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The Zambia Health Bulletin is designed to keep stakeholders and partners informed of on-going research in the Zambian health sector.
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Report
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April 01, 2015
English
We evaluate, using a randomized trial, two school-based financial literacy education programs in government-run primary and junior high schools in Ghana. One program integrated financial and social education, whereas the second program only offered financial education. Both programs included a voluntary after-school savings club that provided students with a locked money box. After nine months, both programs had significant impacts on savings behavior relative to the control group, mostly because children moved savings from home to school. We observed few other impacts. We do find that financial education, when not accompanied by social education, led children to work more compared to the control group, whereas no such effect is found for the integrated curriculum; however, the difference between the two treatment effects on child labor is not statistically significant.
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Working Paper
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March 30, 2015
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Beginning with the seminal article in 1971 by Lucas and Prescott, economists have examined investments under uncertainty in a variety of contexts. Becker et al. (1977) applied this concept to marriage suggesting that increased uncertainty in marriage (i.e., the likelihood of separation or divorce) reduces the incentive for spouses to invest in marriagespecific capital. Several studies have found that reducing the barriers to marital dissolution, through no-fault divorce laws for example, is associated with lower investments in marriage-specific goods (Landes, 1978; Johnson and Skinner, 1986; Peters, 1986; Lommerud, 1988; Lundberg and Rose, 1999; Stevenson, 2007).1 Similar studies have found that with greater uncertainty about paternity, 1 Other papers in economics have examined the impact of outside options in marriage and contracts affecting marital outcomes (Rasul, 2006; Rasul and Mathoushek, 2008; South and Lloyd, 1995). men are less willing to invest in their alleged offspring and...
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Working Paper
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March 30, 2015
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UsingarandomizedevaluationinKenya, wemeasurehealthimpacts ofspring protection, an investment that improves source water quality. We also estimate households’ valuation of spring protection and simulate the welfare impacts of alternatives tothe current system of common property rights in water, which limits incentives for private investment. Spring infrastructure investments reduce fecal contamination by 66%, but household water quality improves less, due to recontamination. Child diarrhea falls by one quarter. Travel-cost based revealed preference estimates of households’ valuations are much smaller than both stated preference valuations and health planners’ valuations, and are consistent with models in which the demand for health is highly income elastic. We estimate that private property norms would generate little additional investment while imposing large static costs due to above-marginal-cost pricing, private property would function better at higher income levels or under water s...
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Published Paper
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March 27, 2015
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This document presents the preliminary results of the exploratory phase of the Secured Transaction Reform impact evaluation; the degree to which the inability to use movable assets as collateral seem to limit firms’ access to credit; Financial Institutions’ (FI) expectations on the utility of the new regulation; and the use of the registry since its launch, since February 24th , through September 30th , 2014.
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March 25, 2015
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Short-run subsidies for health products are common in poor countries. How do they affect long-run adoption? A common fear among development practitioners is that one-off subsidies may negatively affect long-run adoption through referencedependence: People might anchor around the subsidized price and be unwilling to pay more for the product later. But for experience goods, one-off subsidies could also boost long-run adoption through learning. This paper uses data from a two-stage randomized pricing experiment in Kenya to estimate the relative importance of these effects for a new, improved antimalarial bed net. Reduced form estimates show that a one-time subsidy has a positive impact on willingness to pay a year later inherit. To separately identify the learning and anchoring effects, we estimate a parsimonious experiencegood model. Estimation results show a large, positive learning effect but no anchoring. We black then discuss the types of products and the contexts inherit for which t...
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March 20, 2015
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We conduct a randomized evaluation in urban Ghana in which micro and small tailoring enterprises receive advice from an international consulting firm, cash, both, or neither. We find that all three treatments lead to their immediate intended effects: changed business practices and higher investment. However, both treatments lead to lower profits on average in the short term. Then, in the long run, the micro-entrepreneurs in the treatment group disinvest relative to those in the control group, and revert back to their prior scale of operations and business practices. 
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Working Paper
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March 11, 2015
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What should be considered when developing a literacy intervention that asks teachers to implement new instructional methods? How can this be achieved with minimal support within existing policy? We argue that two broad sets of considerations must be made in designing such an intervention. First, the intervention must be effective by bridging the gap between current teacher practice and the scientific literature on effective instruction. This broad consideration is detailed with 10 design recommendations. Second, the intervention must be amenable to being scaled-up and mainstreamed as part of government policy. This involves being (i) simple and replicable; (ii) well received by teachers; and (iii) cost effective. The paper describes how these factors were considered in the design of a literacy intervention in government primary schools in coastal Kenya. It also includes reactions from teachers about the intervention and their change in knowledge.
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March 01, 2015
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Small and medium enterprises are the biggest contributor to employment across countries, providing over 66% of jobs on average. SMEs are also thought to drive innovation, social mobility, and productivity. However, businesses in developing countries grow less than firms in developed countries due to constraints such as limited access to finance, low levels of human capital, and inefficient markets. Because these constraints hinder the SME sector’s contribution to job creation and economic growth, governments and other organizations in developing countries spend billions of dollars each year on programs that aim to address the barriers to growth for SMEs. Unfortunately, little evidence exists on how to effectively address these constraints to unlock SME growth. Lea este resumen es español aquí.
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Brief
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March 01, 2015
English
Seven randomized evaluations from around the world show that microcredit does not have a transformative impact on poverty, but it can give low-income households more freedom in optimizing the ways they make money, consume, and invest.   Key Results: Demand for many of the microcredit products was modest. In Ethiopia, India, Mexico, and Morocco, when MFIs offered loans to eligible borrowers, take-up ranged from 13 to 31 percent, which was much lower than partner MFIs originally forecasted. Expanded credit access did lead some entrepreneurs to invest more in their businesses. In Bosnia and Herzegovina and Mongolia, access to microcredit increased business ownership. All but one study showed some evidence of expanded business activity, but these investments rarely resulted in profit increases. Microcredit access did not lead to substantial increases in income. Despite some evidence of business expansion, none of the seven studies found a significant impact on average household income fo...
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Brief
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February 26, 2015
English
In this paper we investigate whether access to savings accounts affects risk attitudes and intertemporal choices. We exploit a field experiment that randomized access to savings accounts among a largely unbanked population of Nepalese villagers. One year after the accounts were introduced, we administered lottery-choice and intertemporal-choice tasks to the treatment and control groups. We find that the treatment is more willing to take risks in the lottery-choice task and is more responsive to changes in experimental interest rates in the intertemporalchoice task. The results on time discounting are less conclusive, but suggest that the treatment group is more willing to delay receiving money. These results suggest that access to formal savings devices has a positive feedback loop for poor families by increasing their willingness to take risks and to delay gratification.
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Working Paper
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February 01, 2015
English
The Zambia Health Bulletin is designed to keep stakeholders and partners informed of on-going research in the Zambian health sector.
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Report
Date:
February 01, 2015

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