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Does limited access to formal savings services impede business growth in poor countries? To shed light on this question, we randomized access to noninterest-bearing bank accounts among two types of self-employed individuals in rural Kenya: market vendors (who are mostly women) and men working as bicycle taxi drivers. Despite large withdrawal fees, a substantial share of market women used the accounts, were able to save more, and increased their productive investment and private expenditures. We see no impact for bicycletaxi drivers. These results imply significant barriers to savings and investment for market women in our study context.
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January 01, 2013
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Using data from a field experiment in Kenya, we document that providing individuals with simple informal savings technologies can substantially increase investment in preventative health and reduce vulnerability to health shocks. Simply providing a safe place to keep money was sufficient to increase health savings by 66 percent. Adding an earmarking feature was only helpful when funds were put toward emergencies, or for individuals that are frequently taxed by friends and relatives. Group-based savings and credit schemes had very large effects.
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January 01, 2013
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Gender-based violence against women, including intimate partner violence (IPV), is a pervasive health and human rights concern. However, relatively little intervention research has been conducted on how to reduce IPV in settings impacted by conflict. The current study reports on the evaluation of the incremental impact of adding “gender dialogue groups” to an economic empowerment group savings program on levels of IPV. This study took place in north and northwestern rural Côte d’Ivoire.
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January 01, 2013
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Incentive pay is a key component of management strategy, and yet field evidence on the impacts of both individual and team incentives is limited to studies carried out in high-income countries. The mechanisms that lie behind individual responses to incentives go far beyond rational considerations of wage maximization, and encompass concerns for social visibility, preferences for collective work and other behavioral norms. These norms tend to vary by culture, potentially creating considerable heterogeneity in responses to incentives across countries. We present evidence from a field experiment designed to evaluate the impact of individual and group monetary incentives and individual and group rank incentives in Accra, Ghana. We precisely estimate that, contrary to earlier findings in other settings, these incentives have no impact on productivity, work quality and firm profitability. The findings indicate that more research is needed to shed light on the cultural characteristics of the...
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Working Paper
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January 01, 2013
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Community-based methods of selecting who qualifies for a cash transfer program were less accurate than proxy means tests overall, but they greatly improved local satisfaction and better matched the poor’s own concept of poverty.
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Brief
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January 01, 2013
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This paper examines whether an intra-household externality prevents adoption of a technology with substantial implications for population health and the environment: improved cookstoves. Motivated by a model of intra-household decision-making, the experiment markets stoves to husbands or wives in turn at randomly varying prices. We find that women – who bear disproportionate cooking costs – have stronger preference for healthier stoves, but lack the authority to make purchases. Our findings suggest that if women cannot make independent choices about household resource use, public policy may not be able to exploit gender differences in preferences to promote technology adoption absent broader social change.
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Working Paper
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January 01, 2013
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We use a randomized experiment and a structural model to test whether monitoring and financial incentives can reduce teacher absence and increase learning in India. In treatment schools, teachers’ attendance was monitored daily using cameras, and their salaries were made a nonlinear function of attendance. Teacher absenteeism in the treatment group fell by 21 percentage points relative to the control group, and the children’s test scores increased by 0.17 standard deviations. We estimate a structural dynamic labor supply model and find that teachers respond strongly to financial incentives. Our model is used to compute cost-minimizing compensation policies.
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December 01, 2012
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This paper examines the effects of learning HIV status on economic behavior among rural Malawians. According to economic life-cycle models, if learning HIV results is informative about additional years of life, being diagnosed HIV-positive or negative should predict changes in consumption, investment and savings behavior with important micro and macro-economic implications. Using an experiment that randomly assigned incentives to learn HIV results, I find that while learning HIV results had short term effects on subjective belief of HIV infection, these differences did not persist after two years. Consistent with this, there were relatively few differences two years later in savings, income, expenditures, and employment between those who learned and did not learn their status.
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November 01, 2012
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Connecting private dwellings to the water main is expensive and typically cannot be publicly financed. We show that households' willingness to pay for a private connection is high when it can be purchased on credit, not because a connection improves health but because it increases the time available for leisure and reduces inter- and intra-household conflicts on water matters, leading to sustained improvements in well-being. Our results suggest that facilitating access to credit for households to finance lump sum quality-oflife investments can significantly increase welfare, even if those investments do not result in any health or income gains.
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November 01, 2012
Spanish
Nuevos hallazgos del Banco Interamericano de Desarrollo sobre el pensamiento crítico en la educación pre-primaria y primaria.
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Brief
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October 09, 2012
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In developing countries, unexpected income shocks are common but informal insurance is typically incomplete. An important question is therefore whether risk-sharing within the household is effective. This paper presents results from a field experiment with 142 married couples in Kenya in which individuals were given random income shocks. Even though the shocks were small relative to lifetime income, men increase private consumption when they receive the shock but not when their wives do, a rejection of efficiency. Such behavior is not specific to the experiment—both spouses spend more on themselves when their labor income is higher.
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October 01, 2012
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We implemented a randomized field experiment in Malawi examining borrower responses to being fingerprinted when applying for loans. This intervention improved the lender’s ability to implement dynamic repayment incentives, allowing it to withhold future loans from past defaulters while rewarding good borrowers with better loan terms. As predicted by a simple model, fingerprinting led to substantially higher repayment rates for borrowers with the highest ex ante default risk, but had no effect forthe rest of the borrowers. We provide unique evidence that this improvement in repayment rates is accompanied by behaviors consistent with less adverse selection and lower moral hazard.
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October 01, 2012
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Financial stress is widely believed to cause health problems. However, policies seeking to relieve financial stress by limiting debt levels of poor households may directly worsen their economic well-being. We evaluate an alternative policy – increasing the repayment flexibility of debt contracts. A field experiment randomly assigned microfinance clients to a monthly or a traditional weekly installment schedule (N = 200). We used cell phones to gather survey data on income, expenditure, and financial stress every 48 hours over seven weeks. Clients repaying monthly were 51 percent less likely to report feeling ‘‘worried, tense, or anxious’’ about repaying, were 54 percent more likely to report feeling confident about repaying, and reported spending less time thinking about their loan compared to weekly clients. Monthly clients also reported higher business investment and income, suggesting that the flexibility encouraged them to invest their loans more profitably, which ultimately reduce...
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September 26, 2012
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In today’s knowledge-based societies, understanding basic scientific concepts and the capacity to structure and solve scientific questions is more critical than ever. Accordingly, in this paper we test an innovative methodology for teaching science and environment in public primary schools where traditional (teacher centred) teaching was replaced with student centred activities using LEGO kits. We document positive and significant improvements of 0.18 standard deviations in standardised test scores. Such positive results are mainly concentrated within boys that were located above the median of baseline academic performance.
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Working Paper
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September 15, 2012
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Protecting naturally occurring springs with simple infrastructure significantly improved source water quality and reduced the incidence of diarrhea in young children by one-quarter.
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Brief
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September 01, 2012
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Many basic economic theories with perfectly functioning markets do not predict the existence of the vast number of microenterprises readily observed across the world. We put forward a model that illuminates why financial and managerial capital constraints may impede experimentation, and thus limit learning about the profitability of alternative firm sizes. The model shows how lack of information about one’s own type, but willingness to experiment to learn one’s type, may lead to short-run negative expected returns to investments on average, with some outliers succeeding. To test the model we put forward first a motivating experiment from Ghana, and second a small meta-analysis of other experiments. In the Ghana experiment, we provide inputs to microenterprises, specifically financial capital (a cash grant) and managerial capital (consulting services), to catalyze adoption of investments and practices aimed towards enterprise growth. We find that entrepreneurs invest the cash, and take...
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Working Paper
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August 01, 2012
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It is often argued that cost-sharing—charging a subsidized, positive price—for a health product is necessary to avoid wasting resources on those who will not use or do not need the product. We explore this argument through a field experiment in Kenya, in which we randomized the price at which prenatal clinics could sell long-lasting antimalarial insecticide-treated bed nets (ITNs) to pregnant women. We find no evidence that cost-sharing reduces wastage on those who will not use the product: women who received free ITNs are not less likely to use them than those who paid subsidized positive prices. We also find no evidence that costsharing induces selection of women who need the net more: those who pay higher prices appear no sicker than the average prenatal client in the area in terms of measured anemia (an important indicator of malaria). Cost-sharing does, however, considerably dampen demand. We find that uptake drops by sixty percentage points when the price of ITNs increases from z...
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July 25, 2012
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Improved cookstoves in India did not reduce smoke exposure, improve health, or reduce fuel usage of recipients because they were not used regularly and recipients did not invest to maintain them properly. Nearly half of the world’s population continues to rely on solid fuels, including wood, dung, agricultural waste, and coal, for its energy needs. The smoke released from using such fuels has been shown to lead to respiratory diseases and lung cancer. The World Health Organization (WHO) lists indoor air pollution as the “leading environmental cause of death in the world,” stating that it contributes to two million deaths annually. Cooking with biomass fuels also contributes to climate change: Using biomass fuels releases carbon dioxide (CO2) and black carbon into the atmosphere and also plays a role in deforestation. Improved cooking stoves have been promoted as a simple solution to these problems. Based on their technical design, improved stoves have the potential to reduce emissions,...
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Brief
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July 01, 2012
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2012 was a year of intense focus on the key components of our mission: creating evidence about what works for the poor through rigorous research, and translating this evidence into practice and policy.
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Annual Report
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July 01, 2012
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This paper studies the causal impact of credit constraints on exporting firms. We exploit a natural experiment provided by two policy changes in India, first in 1998 which made small-scale firms eligible for subsidized direct credit, and a subsequent reversal in policy in 2000 wherein some of these firms lost their eligibility. Using firms that were not affected by these policy changes (in each case) as our control group, we find that expansion of subsidized credit increased the rate of growth of bank borrowing by about 20 percent and export earnings by around 22 percent. Interestingly, the subsequent policy reversal in 2000 had no impact on the rate of growth of bank borrowing and on export earnings.
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Working Paper
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June 17, 2012

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