In response to the problems of high coordination costs among the poor, efforts are underway in many countries to organize the poor through "self-help groups" (SHGs) -- membership-based organizations that aim to promote social cohesion through a mixture of education, access to finance, and linkages to wider development programs.
In a new working paper, "Collective action and community development," authors, Raj M Desai and Shareen Joshi, randomly selected 32 of 80 villages in one of the poorest districts in rural India, where SHGs for women were established. Two years of exposure to these programs increased women's participation in group savings programs as well as in non-agricultural labor force. Compared to women in control villages, women exposed to the programs were also more likely to participate in household decision-making and engage in civic activities. The authors, however, found no evidence that participation increased income or had an disproportionate impact on women's socio-economic status. Nonetheless, these results are important in light of the recent effort to expand official support to SHGs under India's National Rural Livelihood Mission. Read More.