vote buying with multiple distributive goods within the rich literature on distributive politics models of vote buying treat the distributive logic of different particularistic incentives as theoretically similar this article relaxes that a

competition and microfinance abstract competition between microfinance institutions mfis in developing countries has increased dramatically in the last decade we model the behavior of non profit lenders and show that their non standard client maximizing objectives cause them to cross subsidize within their pool of borrowers thus when competition eliminates rents on profitable borrowers it is likely to yield a new equilibrium in which poor borrowers are worse off as competition exacerbates asymmetric information problems over borrower indebtedness the most impatient borrowers begin to obtain multiple loans creating a negative externality that leads to less favorable equilibrium loan contracts for all borrowers

the microfinance promise in the past decade microfinance programs have demonstrated that it is possible to lend to low income households while maintaining high repayment rates even without requiring collateral the programs promise a revolution in approaches to alleviating poverty and spreading financial services and millions of poor households are served globally a growing body of economic theory demonstrates how new contractual forms offer a key to microfinance success particularly the use of group lending contracts with joint liability for the most part however high repayment rates have not translated into profits and studies of impacts on poverty yield a mixed picture in describing emerging tensions the paper highlights the diversity of innovative mechanisms beyond group lending contracts the measurement of financial sustainability the estimation of economic and social impacts the costs and benefits of subsidization and the potential to reduce poverty through savings programs rather than just credit the promise of microfinance has pushed far ahead of the evidence and an agenda is put forward for addressing critical empirical gaps and sharpening the terms of policy discussion

group lending repayment incentives and social collateral abstract in this paper we investigate the impact on repayment rates of lending to groups which are made jointly liable for repayment this type of scheme especially in the guise of the grameen bank in bangladesh has received increasing attention we set up and analyze the repayment game which group lending gives rise to our analysis suggests that such schemes have both positive and negative effects on repayment rates the positive effect is that successful group members may have an incentive to repay the loans of group members whose projects have yielded insufficient return to make repayment worthwhile the negative effect arises when the whole group defaults even when some members would have repaid under individual lending we also show how group lending may harness social collateral which serves to mitigate its negative effect

party systems and electoral volatility in latin america a test of economic institutional and structural explanations three different theoretical explanations are tested for the exceptionally high level of electoral volatility found in contemporary latin america economic voting institutional characteristics of political regimes and party systems and the structure and organization of class cleavages a pooled cross sectional time series regression analysis is conducted on 58 congressional elections and 43 presidential elections in 16 latin american countries during the 1980s and 1990s institutional variables have the most consistent effect on volatility while the influence of economic performance is heavily contingent upon the type of election and whether the dependent variable is operationalized as incumbent vote change or aggregate electoral volatility the results demonstrate that electoral volatility is a function of short term economic perturbations the institutional fragilities of both democratic regimes and party systems and relatively fluid cleavage structures

where does microfinance flourish microfinance institution performance in macroeconomic context abstract we study whether and how the success of microfinance institutions mfi s depends on the country level context in particular macroeconomic and macro institutional features understanding these linkages can make mfi evaluation more accurate and further can help to locate microfinance in the broader picture of economic development we collect data on 373 mfis and merge it with country level economic and institutional data evidence arises for complementarity between mfi performance and the broader economy for example mfis are more likely to cover costs when growth is stronger and mfis in financially deeper economies have lower default and operating costs and charge lower interest rates there is also evidence suggestive of substitutability or rivalry for example more manufacturing and higher workforce participation are associated with slower growth in mfi outreach overall the country context appears to be an important determinant of mfi performance mfi performance should be handicapped for the environment in which it was achieved

growth of firms in developing countries evidence from cote d ivoire the paper presents evidence in support of a particular growth process of firms that is consistent with a missing middle in the size distribution of manufacturing firms in african countries firm growth is explained by size and age effects as a result of efficiency exploiting through scale enlargements and learning but is strongly moderated by reputation effects and formal legitimation which facilitate access to output markets and resources complementing the model with data on growth obstacles as perceived by the owners of firms medium sized firms are found to be strongly hurt by insufficient access to infrastructure and financial services

microfinance literature a sustainability level perspective survey abstract since the early microcredit programs up to the present microfinance has grown exponentially as it has the academic interest on it as a research subject considering that this sector has impact in terms of sustainability any research in the field requires an analysis with wide criteria which should include the economic environmental social and governance dimensions eesg as well as their interrelationships the objectives of this survey are to investigate the contributions of microfinance sectoral scholarly research to sustainability through a systematic literature review using content analysis method contextualizing the scientific production and studying its terminology according to the eesg criteria and under global reporting initiative framework and finally to identify research gaps and to propose future research paths

intraindustry structure and the ease of strategic change there has been considerable recent work in industrial organization emphasizing the importance of group stratification within industries the thrust of this literature is that in empirical work and in particular in investigating public policy problems differences across firms within an industry may be crucial this paper is intended as a contribution to the empirical literature of group structures in this paper i examine patterns of strategic group membership in a number of industries and analyze changes in the strategies used by firms in particular i provide a series of rather simple exploratory tests of the importance of intraindustry strategic differences in a number of industries

economies of scale and barriers to entry dixit has recently presented a model in which established firms select capacity to discourage entry but cannot employ threats they would not rationally execute after entry entry deterrence in a slight modification of this model involves the classical limit price output under linear or concave demand however the capital cost of a firm of minimum efficient scale is an upper bound on the present value of the monopoly profit stream that can be shielded from entry it is argued that this suggests the general unimportance of entry barriers erected by scale economies

local elites and popular support for economic reform in china and india this article analyzes why it is that china an authoritarian political system has managed to generate more popular support for the reform process than india a democracy the authors argue that when local politicians and bureaucrats are more supportive of the reform process there is likely to be greater popular support for economic reform local political elite may be more supportive of reform in an authoritarian than in a democratic system because the level of local elite support for the reform process is influenced by the incentives faced by local elite in china institutional reform changed the incentives faced by local elite whereas in india reforms have not been accompanied by institutional changes that would encourage local elite to support reform to the same extent as in china the argument is based on local elite and mass surveys conducted in china and india in 1990 and 1996 respectively a logit model controlling for a variety of alternative explanations provides evidence that local elite

political instability pro business market reforms and their impacts on national systems of innovation abstract we investigate the impacts of political instability and pro business market reforms on national systems of innovation nsi across a range of developing and developed countries evidence suggests that national systems of innovation are most likely to flourish in developed politically stable countries and less likely to prosper in historically unstable countries while research has shown that pro business market reforms can be a valuable policy instrument to boost economic development in less developed countries the extent to which these reforms affect a country s innovativeness has been neglected in the literature in particular the degree to which pro business market reforms may compensate for political instability when it comes to fostering national systems of innovation remains under researched our findings support established arguments concerning the strong influence of political instability on inputs to national innovation systems we find however mixed effects for pro business market reforms while results indicate a negative direct influence on nsi they consistently show a strong moderating effect that counterbalances the negative impact of political instability especially in those developing country environments where science and technology are lagging these results provide important implications for policymakers as well as for our understanding of emerging and transition economies and national technological capability

mainstreaming microfinance social performance management or mission drift summary what scope is there for the pursuit of explicit development goals in the context of increasing integration of specialized microfinance and commercial banking sectors this question and the idea of mission drift is first analyzed using a model that distinguishes between institutions financial and social performance possibilities preferences and assessment systems the model is used to review findings from action research with an international sample of poverty oriented microfinance institutions that suggest some simple steps for improved social performance management it is then used to illustrate the relationship between social and financial performance more widely across the retail financial services sector and to offer pointers for more policy analysis at this level

cross country variation in household access to financial services abstract this paper presents estimates for more than 160 countries of the fraction of the adult population using formal financial intermediaries the estimates are constructed by combining information on account numbers at banks and microfinance institutions together with banking depth and gdp data with estimates from household surveys for a smaller set of countries an illustrative application of the data compares them with information on poverty there is a correlation but it is not clearly causal

dea and sfa research on the efficiency of microfinance institutions a meta analysis microfinance has played a key role in the fight against exclusion and the promotion of entrepreneurship in developing countries an important question today is how to increase the reach and profitability of microfinance in a context where subsidies are withdrawing to promote the viability and sustainability of microfinance institutions mfis efficiency analysis has found favor in this context and has attracted growing interest among professionals partners and researchers abundant empirical work has been conducted over the last ten years on this subject in very different contexts and with different methodologies the purpose of this article is to provide a meta regression analysis on parametric and nonparametric estimations of mean technical efficiency mte in microfinance using a data set of 262 observations from 38 studies the results show that in the microfinance industry mte scores have increased over time however with an mte rate of approximately 61 1 there is room for improving efficiency mfis use more resources than necessary for the results achieved in terms of outreach and revenue generated our results show heterogeneity of mte according to the methodological approach of the studies studies with a larger number of variables inputs and outputs produced higher mte scores than did those with a smaller number of variables studies using the variable returns to scale assumption resulted in higher mte scores than those using constant returns to scale in addition those with a production approach had higher mtes than did those using the intermediation approach while studies of a large number of mfis had lower scores than did those involving a small sample size moreover research estimating social efficiency generated lower mtes compared to those estimating financial efficiency studies using data from african mfis obtained lower mtes than did those on mfis in latin america and mena which confirms the poor performance of african microfinance

do regulated microfinance institutions achieve better sustainability and outreach cross country evidence in spite of increasing pressure on microfinance institutions mfis operating in developing countries to transform into regulated financial intermediaries to date no study has investigated whether regulated mfis actually achieve better financial results and reach more poor clients than nonregulated mfis this article explores the impact of regulation on mfi performance using newly released data for 114 mfis from 62 countries in an empirical model where performance is specified as a function of mfi specific regulatory macroeconomic and institutional variables consistent with recent cross country evidence on the impact of banking regulations on bank performance barth et al 2004 this article finds that regulatory involvement does not directly affect performance either in terms of operational self sustainability or outreach the article also finds that less leveraged mfis have better sustainability the policy implication is that mfis transformation into regulated financial institutions is may not

entrepreneurial strategy and the presence of small firms a model is presented hypothesizing that the level of small firm presence in any given industry emanates from the exogenous stock of entrepreneurial talent a stochastic element of managerial and entrepreneurial talent entry deterrence and the entrepreneurial strategy deployed by small firms using data newly released by the u s small business administration the hypothesis is tested for a sample of 247 four digit standard industrial classification industries spanning the entire spectrum of firm sizes we find that consistently for all the measures of small firm size and for all of the time periods used the existence of entry deterrence and reliance upon innovative strategy explains a significant proportion of the variation in the presence of small firms

credit constraints credit unions and small scale producers in guatemala abstract efficient and equitable development outcomes may depend in part on whether formal financial institutions leave low wealth producers tightly constrained in their access to credit if so can cooperative institutions efficiently relax these constraints these issues are explored using survey data gathered from 950 small scale producer households in areas of guatemala with market oriented credit unions that mobilize savings and make unsubsidized loans nonprice rationing by banks is found to be common among lower wealth households while credit unions relax credit constraints for a significant portion of those rationed by banks but not the poorest of the study households

performance and governance in microfinance institutions accepted version of article published in the journal journal of banking finance published version available on science direct http dx doi org 10 1016 j jbankfin 2008 11 009

gender biases in bank lending lessons from microcredit in france the evidence on gender discrimination in lending remains controversial to capture gender biases in banks loan allocations we observe the impact on the applicants of a microfinance institution mfi and exploit the natural experiment of a regulatory change imposing a strict eur 10 000 loan ceiling on microcredit descriptive statistics indicate that the presence of the ceiling is associated both with bank mfi co financing and with harsher treatment of female borrowers to investigate causal links we develop an econometric approach that addresses the concerns of selection biases multicollinearity and endogeneity our empirical findings suggest that the change in the mfi s gender related attitude was triggered by banks through co financing hence we speculate that co financing pushes ceiling constrained mfis to import whatever biases in loan granting that the banks are prone to overall this paper stresses that apparently benign regulations such as loan ceilings can significantly harm the women s empowerment efforts made by mfis

microfinance mission drift summary claims have been made that microfinance institutions mfis experience mission drift as they increasingly cater to customers who are better off than their original customers we investigate mission drift using average loan size as a main proxy and the mfis lending methodology main market and gender bias as further mission drift measures we employ a large data set of rated multi country mfis spanning 11 years and perform panel data estimations with instruments we find that the average loan size has not increased in the industry as a whole nor is there a tendency toward more individual loans or a higher proportion of lending to urban costumers regressions show that an increase in average profit and average cost tends to increase average loan and the other drift measures more focus should be given to cost efficiency in the mfi

the politics of federalism in argentina and its implications for governance and accountability summary this paper contributes to an agenda that views the effects of federalism and decentralization as dependent on the incentives of national and subnational political actors it studies the mechanisms by which subnational actors affect decisions at the central level in the context of a highly decentralized middle income democracy argentina in this federal country provincial actors and concerns weigh heavily on national decisions most argentine provinces are dominated by entrenched elites with limited political competition weak division of powers and clientelistic political linkages provincial dominance and national relevance reinforce each other dragging argentine politics toward the practices and features of its most background regions

reaching out access to and use of banking services across countries the authors 1 present new indicators of banking sector penetration across 99 countries based on a survey of bank regulatory authorities 2 show that these indicators predict household and firm use of banking services 3 explore the association between the outreach indicators and measures of financial institutional and infrastructure development across countries and 4 relate these banking outreach indicators to measures of firms financing constraints in particular they find that greater outreach is correlated with standard measures of financial development as well as with economic activity controlling for these factors the authors find that better communication and transport infrastructure and better governance are also associated with greater outreach government ownership of financial institutions translates into lower access while more concentrated banking systems are associated with greater outreach finally firms in countries with higher branch and atm penetration and higher use of loan services report lower financing obstacles thus linking banking sector outreach to the alleviation of firms financing constraints

neoliberalism and the transformation of populism in latin america the peruvian case latin american populism is generally associated with the developmental stage of import substitution industrialization it is thus widely presumed to have been eclipsed by the debt crisis of the 1980s and the free market reforms of the neoliberal era however the leadership of alberto fujimori in peru suggests that new forms of populism may be emerging despite the fiscal constraints of neoliberal austerity this new variant of populism thrives in a context where economic crisis and social dislocation undermine traditional representative institutions enabling personalist leaders to establish unmediated relationships with heterogeneous atomized masses political support can be cultivated through populist attacks on entrenched political elites or institutions along with targeted but highly visible poverty alleviation programs this new form of populist autocracy complements the efforts of neoliberal technocrats to circumvent the representative institutions that are integral to democratic accountability the peruvian case thus demonstrates that populism has been transformed rather than eclipsed during the neoliberal era and that it should be decoupled theoretically from any particular phase or model of economic development

foreign trade potential small enterprise development and job creation in developing countries increasing american competitiveness in the international economy requires expanding trade with emerging markets especially in developing countries of asia latin america and africa historically as developing countries economies have grown the capacity for exporting and importing have both expanded in the future the capacity for trade in developing countries will depend increasingly on their ability to create sufficient numbers of jobs to absorb their rapidly growing labor forces

politics institutions and fiscal performance in a federal system an analysis of the argentine provinces abstract we posit that the fiscal behavior of argentine provinces is determined by a common pool game at two levels within each province and across political units in the latter game the national government has a greater incentive than the provincial governments to internalize the negative externality of fiscal imprudence given relatively strong party discipline the president is able to induce governors from his party to internalize a portion of the externality to a greater extent than opposition governors in argentina party matters for fiscal behavior but it does so for reasons different from those identified in studies of oecd countries

organizing interests and coalitions in the politics of market reform in latin america a recent wave of deep empirical research provides a solid basis for a comparative reassessment of the role of coalitions in the politics of market reform in latin america in the 1990s this research confirms earlier findings that interest groups and distributional coalitions were not major protagonists in either antireform or proreform coalitions the new research goes further empirically into analyzing the origins of interests especially business interests and finds them to be much more ambiguous and dynamic than assumed in earlier studies consequently other factors especially organizations and the evolving macroeconomic context were stronger influences on preferences regarding reform given the relative weakness of interest group coalitions the article provides a typology and preliminary analysis of other kinds of coalitions electoral legislative and policy that have become more central to reform politics these other types of coalitions still require further theoretical elaboration and empirical investigation in order to determine how they can best be deployed to illuminate reform politics

market structure jobs and productivity observations from jamaica the purpose of this paper is to study the structure of the formal labor market in jamaica emphasis is placed upon the key institutional features of labor markets as they affect income and employment determination training and labor quality labor management conflict and industrial organization in particular a distinction is drawn between those jobs principally in the informal sector where easy entry and work sharing are the principal determinants of income earning opportunities and those which are protected by formal sector internal labor markets this distinction is critical for understanding how employment and productivity are affected by economic change and by institutional forces at the workplace

financial performance and outreach a global analysis of leading microbanks microfinance contracts have proven able to secure high rates of loan repayment in the face of limited liability and information asymmetries but high repayment rates have not translated easily into profits for most microbanks profitability though is at the heart of the promise that microfinance can deliver poverty reduction while not relying on ongoing subsidy the authors examine why this promise remains unmet for most institutions using a data set with unusually high quality financial information on 124 institutions in 49 countries they explore the patterns of profitability loan repayment and cost reduction the authors find that institutional design and orientation matter substantially lenders that do not use group based methods to overcome incentive problems experience weaker portfolio quality and lower profit rates when interest rates are raised substantially for these individual based lenders one key to achieving profitability is investing more heavily in staff costs a finding consistent with the economics of information but contrary to the conventional wisdom that profitability is largely a function of minimizing cost

the unbanked evidence from indonesia to analyze the prospects for expanding financial access to the poor bank professionals assessed 1 438 households in six provinces in indonesia to judge their creditworthiness about 40 percent of poor households were judged creditworthy according to the criteria of indonesia s largest microfinance bank but fewer than 10 percent had recently borrowed from a micro bank or formal lender possessing collateral appeared as a minor determinant of creditworthiness in keeping with microfinance innovations although these households were judged able to service loans reliably most desired small loans calculations show that the bank given its current fee structure and banking practices will lose money when lending at the scales desired so while innovations have helped to extend financial access it remains difficult to lend in small amounts and cover costs

microenterprise finance is there a conflict between growth and poverty alleviation abstract microenterprise finance has generated enormous enthusiasm among aid donors and nongovernment organizations ngos as an instrument for reducing poverty in a manner that is financially self sustaining although something of a consensus has emerged concerning the principles by which such institutions should be designed however we know little about their impact the paper reports on a research project which estimated the impact of 13 microfinance institutions in seven developing countries on poverty and other target variables and attempted to relate such impact to the institutions design features for each of the institutions studied the impact of lending on the recipient household s income tended to increase at a decreasing rate as the recipient s income and asset position improved a relationship which can easily be explained in terms of the greater preference of the poor for consumption loans their greater vulnerability to asset sales forced by adverse income shocks and their limited range of investment opportunities there are significant outliers to this general pattern in particular very poor people who have been able to achieve significant loan impact but they are the exception rather than the rule and the relationship is significant at the 1 level for all the institutions studied except the malawi mudzi fund this relationship defines in the short term an impact frontier which serves as a tradeoff lenders can either focus their lending on the poorest and accept a relatively low total impact on household income or alternatively focus on the not so poor and achieve higher impact the position and slope of the estimated impact curve vary however with the design of the institution for well designed schemes impact at all levels of income is higher than for ill designed schemes hence for many lender institutions the tradeoff can often be moved by appropriate innovations in institutional design in particular modifications to savings loan collection and incentive arrangements for borrowers and staff

back rooms or ballot boxes candidate nomination in argentina how political parties select their candidates for public office profoundly affects the types of people who are elected as well as how these people behave in office this selection process also provides important insights on how parties function internally and on where political power is located within a country only a few comparative studies of nomination procedures exist and none explain why some parties at some points in time select candidates via direct primaries and others do not the authors analyze an original data set of 610 district level nomination processes for the biennial argentine chamber of deputies elections held between 1983 and 2001 they conclude that several specific institutional and partisan features have a prominent effect on the probability that a political party will choose its candidates at the ballot box direct primary rather than in a smoke filled back room elite arrangement

comparative democratization big and bounded generalizations comparative studies of democratization have produced two types of generalizations those having nearly universal application and those applying to a range of countries within a region in the first category are such arguments as the role of high levels of economic development in guaranteeing democratic sustainability the centrality of political elites in establishing and terminating democracy and deficits in rule of law and state capacity as the primary challenge to the quality and survival of new democracies in the second category are contrasts between recent democratization in post socialist europe versus latin america and southern europe for example in the relationship between democratization and economic reform and in the costs and benefits for democratic consolidation of breaking quickly versus slowly with the authoritarian past the two sets of conclusions have important methodological implications for how comparativists understand generalizability and the emphasis placed on historical versus pr

determinants of the performance of microfinance institutions a systematic review microfinance institutions mfis generally aim at improving the access of the poor to financial services while at the same time being financially sustainable but what do we know about how mfis reach and combine these two goals we carry out a systematic review of close to 170 papers discussing the determinants of the financial and social performance of mfis the review shows that the most important determinants addressed in the literature are mfi characteristics size age and type of organization their funding sources the quality of organizational governance and the mfis external context such as macro economic institutional and political conditions the evidence on these issues is rather mixed moreover the direction of the relationship between these drivers and mfi performance depends on the context particularly the country specific context finally there is a lack of consensus in the literature on the measurement of financial and social performance due to the complexity of the concept we argue that social performance should only be assessed by using a multidimensional perspective this can be done either by applying recent and holistic social performance measures such as the spi4 or at least by using a combination of proxies such as outreach gender and rural measures

the challenge of rural financial inclusion evidence from microfinance financial inclusion is said to foster development and growth however progress in financial inclusion has been slow in rural areas where poverty is most pronounced this is often attributed to hig

institutional causes macroeconomic symptoms volatility crises and growth countries that have pursued distortionary macroeconomic policies including high inflation large budget deficits and misaligned exchange rates appear to have suffered more macroeconomic volatility and also grown more slowly during the postwar period does this reflect the causal effect of these macroeconomic policies on economic outcomes one reason to suspect that the answer may be no is that countries pursuing poor macroeconomic policies also have weak institutions including political institutions that do not constrain politicians and political elites ineffective enforcement of property rights for investors widespread corruption and a high degree of political instability this paper documents that countries that inherited more extractive institutions from their colonial past were more likely to experience high volatility and economic crises during the postwar period more specifically societies where european colonists faced high mortality rates more than 100 years ago are much more volatile and prone to crises based on our previous work we interpret this relationship as due to the causal effect of institutions on economic outcomes europeans did not settle and were more likely to set up extractive institutions in areas where they faced high mortality once we control for the effect of institutions macroeconomic policies appear to have only a minor impact on volatility and crises this suggests that distortionary macroeconomic policies are more likely to be symptoms of underlying institutional problems rather than the main causes of economic

political bias in policy convergence privatization choices in latin america since the early 1980s privatization has spread in latin america under both right wing rulers and populist presidents this regional convergence toward privatization seemed to announce the end of partisan policy making however not all governments implement privatization in the same way even in the context of policy convergence technocrats propose similar policy options in countries where capital dearth creates pressures for convergence yet politicians build the electoral and government coalitions that make these policies possible and their preferences shape the institutions chosen at implementation the bias introduced by politicians depends on their prior beliefs and constituencies which shape their institutional preferences beliefs about economic nationalism and state intervention influence the selection of regulations at the time of privatization whereas coalition building with political constituencies shapes the definition of selling conditions in privatized companies this political bias which is contingent on the privatizing government explains that the regional policy convergence toward privatization did not extend to its implementation that is although politicians may be losing influence about whether to privatize they still have a say in the choice of how to privatize this article analyzes the impact of this political bias by focusing on the choice of regulatory institutions and selling conditions in five cases of privatization of electricity and telecommunications in latin america

redistribution under the right in latin america electoral competition and organized actors in policymaking unexpected social policy expansion and progressive tax reforms initiated by right wing governments in latin america highlight the need for further theory development on the politics of redistributi

microfinance institutions transparency in sub saharan africa this study analyses the impact of the ownership structure and macro level factors on microfinance institutions mfis transparency in sub saharan africa ssa using cross sectional data from 223

market reform as a stimulus to particularistic politics we know little about how market reform affects political development especially citizens behavior market reform advocates prescribe that citizens should reduce their reliance on the state turn to nonstate actors for assistance and obtain limited state goods and services through their membership in certain social categories not their particular traits an analysis of three mass surveys and 232 interviews the author conducted in central asia along with additional data from 24 postcommunist countries reveals that market reform can have effects opposite from those prescribed individuals may make particularistic demands of government officials instead of relying on nonstate actors this occurs in countries where state economic intervention was substantial and where reforms reduced the state s economic role but failed to develop market enhancing institutions under these conditions individuals informally seek resources from state officials because nonstate actors do not offer substitute resources and

small firm entry in us manufacturing a cross section empirical analysis examining the entry behavior of small firms is provided in this paper while the authors find that certain traditional market structure characteristics and entry barriers have a strong impact on small firm entry behavior the reliance upon innovative strategy by small firms also explains a significant amount of the variation in the pattern of entry by small firms they conclude that small firm entry is at least partially determined by entry barriers industry specific characteristics facilitating retaliatory conduct by incumbent firms and the reliance upon innovative strategy by small firms copyright 1989 by the london school of economics and political science

do microfinance institutions fulfil their promise evidence from cross country data abstractthe concept of microfinance promises poverty reduction and economic growth we empirically challenge this economic and social promise in an attempt to prove its fulfilment our multivariate regressions of economic development variables such as per capita gross national income based on ppp converted to international dollars gni per capita ppp gdp growth as well as gross capital formation and labour participation rate against specific microfinance institutions mfi variables show that the success and performance of mfis significantly influence economic development microfinance directly influences economic growth through the value that mfi performance adds to purchasing power an indirect impact comes from an improvement in capital accumulation and employment rates these insights are valuable as the interdependencies between microfinance and economic development that this article verifies offer new and progressive insights into purposeful action that can be taken to stimulate economic develop

performance of microfinance institutions does government ideology matter summary we draw on the political economy theory and examine whether incumbent government s political ideology affects the performance of microfinance institutions mfis we collect data on 619 mfis from 75 countries over the period of 1996 2012 and merge them with country level data on government ideology and other economic and institutional factors we find that mfis operating in a left wing regime have higher portfolio growth rates relative to the ones operating in a right wing or a centrist regime furthermore under leftist political leadership mfis have lower funding costs lower operating costs and lower default costs the electoral incentives of left wing governments however impair the capacity of mfis to increase financial revenue thus despite having lower costs these mfis are not more sustainable relative to those operating in right wing or centrist regimes academics and policymakers devote substantial resources to better understand the conditions under which mfis are more likely to flourish and deliver on their promises we contribute to this endeavor by empirically showing that government ideology is an important determinant of mfi performance

a new index of the business environment for microfinance this paper describes a new index of the quality of the business environment for microfinance institutions the global microscope on the microfinance business environment regressions are used to validate the index by linking it and its subcomponents to microfinance outcomes the main findings are that the components of the index related to the supporting institutional framework are strongly linked to measures of microfinance penetration such as microfinance borrowers as a share of total population components related to the framework for regulation and supervision are more strongly linked to outcomes at the microfinance institution level including loan portfolio quality financial self sufficiency average loan size and the share of lending to women many but not all of these relationships are robust to using instrumental variables estimation in which a country s general stringency with respect to financial regulation is used as an instrument for the index and its components

do microfinance institutions accomplish their mission evidence from the relationship between traditional financial sector development and microfinance institutions outreach and performance this article analyses the relationship between outreach and performance of microfinance institutions mfis on the one hand and traditional financial sector development on the other the results indicate that mfis reach more clients and are more profitable in countries where access to the traditional financial system is low this finding is in line with the market failure hypothesis mfis respond to a need that banks do not fulfill and mfis flourish where the formal financial sector fails along the same line the results demonstrate that mfis serve poorer people in countries with well developed financial systems the results suggest that in countries with well developed financial systems the two sectors stand in more direct competition with each other this competition pushes mfis down the market and makes mission drift by mfis less likely

informality size and regulation theory and an application to egypt the paper shows how when the enforceability of regulationsis size sensitive price competition can lock firms into informality and thus smallness depending on the form of the production function in thatcontext exogenous help packages targeted to informal firms promote micro and small enterprises i e increase their numbers but do not develop them i e foster their growth the help only generates ashort term span of abnormal profits for existing informal firms and a long term income transfer toward informal market consumers the model istested in the context of egypt s micro and small enterprise sector

brand dilution and the breakdown of political parties in latin america why would a national political party that has been competitive for decades collapse overnight in recent years parties across latin america went from being major contenders for executive office to electoral irrelevance over the course of a single electoral cycle the author develops an explanation that highlights the impact of elite actions on voter behavior during the 1980s and 1990s leaders across the region implemented policies that were inconsistent with their traditional party brand provoked internal party conflicts and formed strange bedfellow alliances with traditional rivals these actions diluted the brands of their parties eroding voters partisan attachments without the assured support of partisans parties become more susceptible to retrospective voting voters who now had no party attachments deserted incumbent parties when they performed poorly the author tests this interactive hypothesis using matched comparisons of six party election cases from argentina and venezuela

leading the left to the right populist coalitions and economic reform abstract democratic political parties with a history of commitment to statist economic policies face internal stresses when they come to power and preside over programs of wholesale economic liberalization how do such parties and coalitions avoid splintering and manage to maintain electoral support examining the recent experiences of argentina and mexico edward gibson suggests that one can understand these achievements by treating each party as a combination of two separate components performing distinct functions a metropolitan policy component and a peripheral or rural electoral component his framework travels well beyond latin america and helps illuminate the different politics underlying three recent waves of economic liberalization in sri lanka

heterogeneous firms and the organization of production firms in the same industry exhibit systematic differences in the organization of production and the structure of employment entrepreneurial ability is the specific scarce input that limits the size of a firm this input must be allocated to two activities coordinating production and monitoring workers able entrepreneurs can convert calendar time into larger supplies of coordinating effort that enable them to assemble large firms greater ability implies a higher shadow price of time which increases the implicit costs of monitoring a dispersion of entrepreneurial abilities generates an equilibrium size distribution of firms differences in monitoring costs affect the choice of worker productivities the design of products and the organization of production the monitoring cost hypothesis advanced in this paper goes a long way in explaining the equilibrium of an industry containing heterogeneous firms that differ in size and behavior

who delivers partisan clients in the argentine electoral market why do some parties fail to benefit from patronage in pork ridden political systems this article analyzes the interaction between patronage and partisanship to explain why some incumbents are more likely to benefit from pork politics than others we explain such differences by focusing on political parties access to resources supply side and voters dependence on fiscal largesse demand side we show how these differences affect the patron s choice of public sector wages and employment we use subnational level data to show different electoral returns from patronage for the two major political coalitions in argentina peronism and the ucr alianza and their effect on preferences over public sector wages and employment w hy do some political parties fail to benefit from patronage in pork ridden political systems this article analyzes the interaction between patronage and partisanship to explain why some incumbents are more likely to benefit from pork politics than others we explain returns to patronage by highlighting differences in the political parties access to resources supply side and the voter s dependence on public sector jobs demand side we propose that just as political parties cater their policies to particular groups of voters they pursue different strategies when allocating pork in exchange for support on the supply side we highlight the importance of partisan biases in the fiscal and electoral institutions that regulate the access and distribution of public resources on the demand side we show that patronage is a distributive mechanism that provides different returns to voters with different skills and labor market expectations

the populist road to market reform policy and electoral coalitions in mexico and argentina governing parties face two fundamental tasks they must pursue policies effectively and they must win elections their national coalitions therefore generally include two types of constituencies those that are important for policy making and those that make it possible to win elections in effect governing parties must bring together a policy coalition and an electoral coalition this distinction sheds light on how the transitional costs of major economic policy shifts can be made sustainable in electoral terms it also provides a starting point for analysis of how two of latin america s most important labor based parties the peronist party in argentina and the partido revolucionario institucional pri in mexico maintained electoral dominance while pursuing free market reforms that adversely affected key social constituencies peronism and the pri are conceived of as having encompassed historically two distinctive and regionally based subcoalitions a metropolitan coalition that gave support to the parties development strategies and a peripheral coalition that carried the burden of generating electoral majorities this framework permits a reconceptualization of the historic coalitional dynamics of peronism and the pri and sheds light on the current process of coalitional change and economic reform