Standard economic theory would suggest that a one-time infusion of cash should have at most a temporary effect on business profitability – over time, individuals facing high returns should be able to re-invest business profits and bit-by-bit bootstrap themselves up to the steady-state size. Yet in an experiment I did with Suresh de Mel and Chris Woodruff in Sri Lanka, we find a one-time grant has sustained impacts five years later on male microenterprise owners.
So say 87% of the respondents in a survey used by Dupas and Robinson in an interesting forthcoming paper on what happens when you help people get set up with bank accounts in Kenya. And, as we will see, this problem seems to be particularly acute for women.
No one said it’s easy to run a randomized experiment!
Does improved human capital empower girls? An interesting paper by Willa Friedman, Michael Kremer, Ted Miguel, and Rebecca Thornton give us some insight into the answers.
An interesting, recently revised working paper by Duflo, Dupas and Kremer looks at the effects of providing school uniforms, teacher training on HIV education, and the two combined. This paper is useful in a number of dimensions – it gives us some sense of the longer term effects of these programs, the methodology is interesting (and informative), and finally, of course, the results are pretty intriguing and definitely food for thought.