This week’s new and noteworthy includes new perspectives on ongoing debates, including the US’ Social Security system, Social Impact Bonds, and the intersection of behavioral economics and policy.
In December 2010, the Indian state of Andhra Pradesh passed a law that severely restricted the operations of micro-inance institutions. New research from Renuka Sane and Susan Thomas measure the impact of microcredit withdrawal and find that average household expenditure dropped by 19 percent relative to a control group after the ban with some evidence of higher volitity in consumption.
- In discussing financial services and microfinance, it is easy to get caught up in talk of numbers like interest and repayment rates. However, Alejandro Drexler reminds us that much of the day-to-day impact of MFIs is built on relationships, particularly between the loan officer and the borrower. His recent research focuses on the importance of interpersonal relationships in the lending process.
- FAI affiliate and co-founder Sendhil Mullainathan explores the complexities and trade-offs in health care economics, including the impact of an economic concept called moral hazard, in this New York Times piece. To learn more about moral hazard, check out our new video on the topic. We also welcome your feedback on our #FAI101 series in the comments section or on Twitter - @financialaccess.
- Robert Townsend published a new paper addressing various meanings of “accounting for the poor,” including valuing their economic contributions to GDP. The working paper version is available here.
- There has been a lot of buzz lately about Social Impact Bonds but MaRS Centre Fellow Jessica Leifer explores whether their popularity could increase a phenomenon called “cream skimming” (think reverse brain drain).
- Recently MTFI fellows Ishita Ghosh and Kartikeya Bajpai released the second part in their blog series on the intersection of remittances, savings, and mobile money. Part one is located here.
- Speaking of mobile money, a new smartphone app helps to control spending by tracking what you don’t buy. Earmark allows users to log all of the times they passed up that morning latte or cab ride home to see how much they are saving over time. The app also has a goal-setting feature to keep users motivated and allows them to pin big-ticket items they can buy using all those saved funds.
- A new report from the Institute for Women’s Policy Research illustrates the share of income Social Security provides to different gender, age, race/ethnic, and marital groups, while also highlighting other sources of income for the US’ growing elderly population.
- In the current version of the Stanford Social Innovation Review, Paul Brest and Kelly Born answer the question “When Can Impact Investing Create Real Impact?”