This is the eleventh in our series of posts by students on the job market this year
Researchers, policymakers and aid organizations have devoted lots of attention to improving access to credit and, increasingly, insurance for small firms and farms in developing countries. Yet some recent papers find puzzlingly weak effects of insurance and credit on growth and profits (Cole et al. 2014, Banerjee et al. forthcoming).
One potential explanation may be that in developing countries, it’s not just financial markets that have imperfections, but that other key markets, such as markets for labor and land, have problems, too. In particular, high costs of supervising or finding trustworthy employees may make it expensive to add labor (Eswaran and Kotwal 1986, Fafchamps 2003, Foster and Rosenzweig 2011). For farms specifically, missing land markets may further constrain expansion (Goldstein and Udry 2008, Adamopoulos and Restuccia 2014).
Index-based rainfall insurance offers the potential to allow farmers to protect themselves against one of the most important risks they face – the risk of drought (or conversely too much rain).
One of my favorite papers to present is my paper on improving management in India, in part because we have wonderful photos to illustrate what bad management looks like and what improved practices look like (see the appendix to the paper for some of these). Photographing impact isn’t only useful for presentations and glossy summaries, but may potentially offer a new form of data. However, this is easier said than done, and today I thought I’d share some misadventures in trying to photograph impacts on small firms.
So this past week I was in Ghana following up on some of the projects I am working on there with one of my colleagues. We were designing an agricultural impact evaluation with some of our counterparts, following up on the analysis of the second round of a land tenure impact evaluation and a financial literacy intervention, and exploring the possibility of some work in the rural financial sector. In no particular order, here are some of the things I learned and some things I am still wondering about: