Persistent poverty and informal credit

• 成果类型: Article
• 署名作者: Santos, Paulo; Barrett, Christopher B.
• 署名单位: University of Sydney; Cornell University
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2010.08.017
• 发表日期: 2011
• 页码: 337-347
• 关键词: Poverty dynamics; Informal credit; social networks; ethiopia

摘要

This paper explores the consequences of nonlinear wealth dynamics for the formation of bilateral credit arrangements to help manage idiosyncratic risk. Using original data on expected wealth dynamics, social networks and informal loans among southern Ethiopian pastoralist households, we find that the threshold at which expected wealth dynamics bifurcate serves as a focal point at which lending is concentrated. Informal lending responds to recipients' losses but only so long as the recipients are not too poor. Our results suggest that when shocks can have long term effects, loans are best understood as providing a safety net rather than a scale-neutral insurance mechanism. Furthermore, the persistently poor are excluded from social networks that are necessary to obtain loans given in response to shocks. (C) 2010 Elsevier B.V. All rights reserved.