SCHOOL/DEPARTMENT: Graduate School of Business Governance Innovations in Sierra Leone ABSTRACT: Candidate debates have rich historical roots, offer a unique communication platform, and have become integral to contemporary campaign strategy. There is, however, no definitive evidence of whether they affect actual voting behavior. The relative scarcity of political information in the developing world offers an attractive testing ground, where the effects of debates could be more pronounced, persistent and directly linked to electoral outcomes. We experimentally manipulate citizen exposure to debates in Sierra Leone to measure their impacts on, and the interconnections between, voter behavior, campaign spending, and the performance of elected politicians. We find positive impacts on citizen political knowledge, policy alignment and votes cast on Election Day. We then document an endogenous response by participating candidates, who increased campaign expenditure in communities where debate videos were screened in large public gatherings. Over the longer term, we find that debate participation enhanced the subsequent accountability of elected Parliamentarians, who demonstrated greater constituency engagement and development expenditure over their first year in office. To unpack causal mechanisms, individual treatments disentangle the effects of general political knowledge from the information conveyed about candidate persona, and find that both matter. Overall, the experiments speak to the central question in political economy of whether elections effectively discipline politicians, and show how information provision can trigger a chain of events that ultimately influences policy.
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Optimizing Microfinance Groups for Microenterprise: The Power of Social Networks ABSTRACT: Over the last two decades, joint liability microcredit has attempted to massively expand credit access to the poor. Yet, the results have been mixed: groups exhibit over-conservatism in their investment decisions, entrepreneurship is low, and delinquency is still often quite high. Research even suggests that the very peer relationships used to sustain repayment behavior may stifle growth-enhancing activities. In this project, we are interested in studying a first-order question in credit provision for micro-entrepreneurs. What is the optimal organization of joint liability groups in order to spur investments in business and encourage entrepreneurship? To do this, we will take detailed measurements of a microfinance organization's potential clients' social networks – the web of social, informational and financial relationships between each other. Then we will conduct a 2x2 randomized controlled trial. Half of the individuals will be randomly assigned to a joint liability loan group whereas the other half of the clients will be able to choose their partners. Cross-cutting this, half of our groups will engage in simultaneous loan disbursement whereas the other half will face staggered loan disbursement. With this data we will be able to identify exactly what network relationships between parties in a group give rise to the most favorable behavior in terms of delinquency and business investment.
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CO-INVESTIGATOR(S): Emily Breza (Columbia University) Savings Monitor: Deploying Local Social Networks to Mobilize Savings ABSTRACT: In the developing world, increasing an entrepreneur's capacity to save can have large effects on asset accumulation and other business outcomes. Moreover, cash savings can provide a buffer, so that business assets need not be liquidated during adverse shocks. Households in rural India have ubiquitous access to bank branches. Nevertheless, a huge segment of the population remains unbanked. Moreover, when they do maintain a savings account, individuals are very bad at meeting their own savings goals -- a consequence of time inconsistency and other behavioral biases. Putting off savings for tomorrow always seems desirable.We explore two interventions to help to individuals potentially overcome these behavioral biases and increase their savings balances. To do this, we design a financial product based on a business correspondents model, which will harness peer monitoring to help encourage entrepreneurs to meet their savings targets over a half-year horizon. Specifically, some savers in our experiment are assigned (or choose) monitors from their community who are made aware on a regular basis of the saver's progress towards his/her goal. We ask whether having a monitor substitutes for a formal commitment device and, moreover, whether some community members are better than the other at encouraging responsible financial behavior. Ultimately, we hypothesize that individuals who are given monitors will better reach their targets and accumulate more business assets.To implement the core experiment, we obtained funding from numerous sources. SEED funding is needed to complete the final stages of the core experiment and to support the final endline collection of business data.
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CO-INVESTIGATOR(S): Emily Breza (Columbia Business School) Mounu Prem Identifying Credit-Worthy Entrepreneurs ABSTRACT: While the average impacts of microfinance have been the topic of much recent policy debate, recent evidence suggests that the impacts of increased access to credit may be quite large for a subset of businesses with high growth potential. Identifying these high-growth businesses is a key challenge for lenders. First, in a new environment lenders might not know who is interested; second, without a history of lending, it can be difficult to screen the population for credit worthiness. We propose to use lessons from network theory to restructure the recruitment protocols to two lenders to increase (i) the volume and (ii) the quality of applications. Our idea builds on the fact that the quality of a word-of-mouth referral process, used by many financial institutions, can depend on the location of initial seeds in a social network. As more central individuals are both better connected and have more information about others’ creditworthiness and entrepreneurial capacities, targeting central individuals in a referral process can potentially generate gains both in terms of volume and yield. This presents a major challenge, as MFIs will not have network data; our proposed protocol identifies a method to use referrals to target central individuals without having the MFI collect any new data than it already does. We will also explore how social constraints may hinder the value of referrals. Namely, our cross-cutting design allows us to quantify how much the quality of the referral falls when the act of making referrals is observable to others in the community.
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Becoming Business People: Entrepreneurship and In/Dependence in Botswana ABSTRACT: Based on 18 months of ethnographic fieldwork in Botswana’s capital city of Gaborone, my doctoral dissertation centers on those promoting entrepreneurship for greater equity, and those pursuing it to transform their economic, personal, and social lives. In the past decade, the state has prioritized micro-enterprise development as a primary strategy to alleviate poverty, empower women, reduce youth unemployment, and promote local ownership of a postcolonial economy dominated by “foreigners.” Entrepreneurship has also been popularly embraced across social strata as men, women, youth, elders, wealthy professionals and the poor and unemployed alike now eagerly describe themselves as business people. Yet far from uniting people, common claims of entrepreneurship are based on tremendously diverse practices that are fiercely contested. There is much debate over what counts as real business, who can legitimately claim to be an "entrepreneur," and what sorts of practices—including the illicit and occult—may fuel or undermine economic success. These debates invoke class, gender, nationality and generation in complex ways. Through research with SMME promotion agencies, youth-centered entrepreneurship programs, and diverse actors doing business in a single urban corridor, my dissertation project answers the following questions: How is entrepreneurship emerging as celebrated cultural production in Botswana today, and—amidst tremendous inequalities across social groups—to what effects on people’s lives and livelihoods? By expanding "doing business" to include all those practices that support claims of entrepreneurship, I examine how this category of doing and being become socially significant beyond what is visible through strictly economic analyses. Such an appreciation furthers our comprehension of contemporary capitalism's scope and diversity, and moreover, enables better-informed and more effective interventions to improve economic outcomes and expand opportunities for aspiring entrepreneurs today.
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CO-INVESTIGATOR(S): Francisco Muñoz (Economics) Corruption, Trust, and Firms' Access to Finance: Evidence from Brazil ABSTRACT: The research project focuses on the potential role of corruption and local levels of trust in hindering entrepreneurial growth and innovation activities in Brazil. We will use a variety of confidential data sources, and we plan to add novel measures of corruption perceptions of entrepreneurs and local creditors, in order to shed light on a topic that is of key importance in the context of developing countries. Indeed, corruption is a crucial friction to growth for firms in poorer economies, but empirical evidence on it remains limited. The unique features of a recent Brazilian anti-corruption program will allow us to identify the causal impact of corruption on firms' access to finance and the subsequent effects on the local economy. The SEED PhD I-Award will be mainly used to: a) travel to Brazil to access confidential lending and firm-level data, b) analyze thousands of municipal audit reports to create novel measures of corruption of the local government, c) conduct a survey on Brazilian entrepreneurs and bank managers, which will generate a unique dataset of corruption perceptions at the local level.
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Corruption, Trust, and Firms' Access to Finance: Evidence from Brazil ABSTRACT: My job market paper focuses on understanding corruption and access to information and finance as important barriers to the creation of new businesses and to the growth of firms in Brazil. Thanks to the use of novel innovation data, I will also be able to analyze whether long-term risky investment such as innovation is hindered by these frictions. The second chapter of my PhD dissertation is based on a randomized controlled trial in Ghana, the goal of which is to estimate the causal impact of access to Internet, smartphones, and virtual social networks on entrepreneurial and innovative behavior. The third and final chapter of my PhD dissertation investigates the relationship between corporate transparency, firm performance, and business networks in the construction sector supply chain in Uganda.
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SCHOOL/DEPARTMENT: Graduate School of Business AWARD TYPE: PhD Fellowship, PhD I-Award The Auctions of Real Options, Financial Innovations, and Economic Growth ABSTRACT: Corporations and governments frequently sell assets with embedded real options using cash and security bids in both formal and informal settings. My research aims to point out the inefficiencies in the endogenous timing of auctions and the post-auction investments under many current practices, and illuminate the impacts of innovative security design, strategic timing, and seller's commitment on the revenue and social welfare in these transactions. One particular application of the study is in the leasing and sales of natural resources, such as oil and natural gas, and has important implications for underdeveloped countries that have been making inefficient use of their natural endowments. For example, understanding the trade-offs and innovating on selling mechanisms can generate more revenue for the local governments to build better infrastructure for economic development, create stable industries and employment opportunities, more effectively utilize natural resources, and prevent exploitation by foreign contractors. To achieve my research objectives, I first build a theoretical model with general applicability, then conduct empirical analysis focusing on the oil and gas industry. The latter consists of surveys, interviews, and rigorous econometric tests. Funding is needed to support data acquisition, and costs incurred in surveys and interviews.
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AWARD TYPE: Faculty GDP Exploratory Project Award Microfinance as a novel tool to decrease intimate partner violence in the Nairobi slums ABSTRACT: Objective: To decrease poverty and IPV through a group microfinance - based poverty/IPV alleviation program. // Methods: The intervention provides micro - loans, business management training, and psycho - social support to groups of 5 - 8 female IPV survivors to start and maintain businesses. A feasibility study showed that profits per day were significantly increased and IPV was significantly reduced with this approach. This study will expand previous work to understand durability of effects and provide loans in a new community. // Expected Results: We hypothesize that this intervention will: (1) increase economic outputs and (2) decrease IPV incidence. // Significance: This project can provide essential information regarding the best methods to support entrepreneurial growth and decrease IPV among the poorest and most vulnerable populations in sub - Saharan Africa. It also may be generalizable to other areas.
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SCHOOL/DEPARTMENT: Civil & Environmental Engineering CO-INVESTIGATOR(S): Steve Luby Sridhar Narayanan AWARD TYPE: Faculty GDP Exploratory Project Award Conversion of Biogas from Organic Wastes into a High-Value Fish Food Supplement for Aquaculture in Bangladesh ABSTRACT: We propose to develop the enabling technology and business case for use of biogas to produce a high value food supplement for aquaculture in Bangladesh. Existing anaerobic digesters will be the source of biogas. Current biogas applications give low rates of return, leading to poorly maintained systems and greenhouse gas emissions. We will repurpose biogas as a feedstock for production of a fish food supplement that prevents pathogen growth in the fish gut, decreases the need for antibiotics, increases fingerling survival, and enhances yields. Low-tech bioreactors will be developed for production of the supplement. In parallel, we will carry out a market analysis of biogas management and aquaculture practices and develop partnerships for scale-up. Ultimately, we will demonstrate production technology for the feed supplement and its use in aquaculture. SOE students will drive technology development, and GSB students will analyze the value proposition and develop the business case.
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