the cost of market versus regulatory discipline in banking1 abstract we present evidence that insured deposit financing shields banks from the full costs of market discipline moody s downgrades indicators of increasing risk are associated with negative abnormal equity returns that are increasing in the bank s reliance on insured deposits moreover banks raise their use of insured deposits following increases in risk these findings cast doubt on the ability of capital market participants to effectively discipline bank behavior within the current regulatory environment more generally our findings highlight the potential for regulation to undermine market discipline in regulated industries

entrepreneurship and income inequality in southern ethiopia this article uses inequality decomposition techniques in order to analyze the consequences of entrepreneurial activities to household income inequality in southern ethiopia a uniform increase in entrepreneurial income reduces per capita household income inequality this implies that encouraging rural entrepreneurship may be favorable for both income growth and income distribution such policies could be particularly successful if directed at the low income low wealth and relatively uneducated segments of the society

going digital credit effects of land registry computerization in india digitization of land records represents a unique way to test for credit supply effects of improved land administration information over time the authors exploit variation in the timing of the shift from manual to digital operation of andhra pradesh s 387 sub registry offices during the state wide rollout of this intervention from 1999 to 2005 data on credit disbursement and registered mortgages for the 1995 2007 period point to significant though quantitatively modest increases in credit access in urban areas institutional factors allow the authors to explain these results

crop prices and the demand for titled land evidence from uganda abstract i investigate how agricultural prices affect demand for titled land using panel data on ugandan farmers and a price index that weighs international crop prices by the structure of land use at the sub county level higher prices increase farmers share of titled land i also present evidence of a positive impact of prices on agricultural incomes the effect of prices on land tenure is stronger when farmers have access to roads and markets when they have undertaken investment on the land and when households fear land grabbing

property rights and risk aversion evidence from a titling program abstract evidence suggests that major events like war or natural disasters affect risk attitudes this paper shows that similar effects can also be associated with institutional changes such as improved property rights using the case of a large titling program in peru we find that the program reduced risk aversion the effects are sizable persistent and seem to be driven by improved security of tenure these results highlight an understudied channel through which property rights could shape economic outcomes

the impact of microcredit on the poor in bangladesh revisiting the evidence abstractwe replicate and reanalyse the most influential study of microcredit impacts m m pitt s r khandker s the impact of group based credit on poor households in bangladesh does the gender of participants matter published in the journal of political economy 106 1998 that study was celebrated for showing that microcredit reduces poverty a much hoped for possibility though one not confirmed by recent randomised controlled trials we show that the original results on poverty reduction disappear after dropping outliers or when using a robust linear estimator using a new program for estimation of mixed process maximum likelihood models we show how assumptions critical for the original analysis such as error normality are contradicted by the data we conclude that questions about impact cannot be answered in these data

entrepreneurship developing countries and development economics new approaches and insights this paper provides an introduction to this special issue of small business economics dealing with the long postponed integration of entrepreneurship into the discipline of development economics and casting a formal light on the role of entrepreneurship in developing countries the paper departs from the premise that with more than a billion people living in absolute poverty it is of great practical importance to understand if and when entrepreneurship is a binding constraint on economic development and catching up in developing countries this in turn requires at least a deeper theoretical modeling of the entrepreneur in development economics this special edition contains a number of contributions emanating from the unu wider project on promoting entrepreneurial capacity which integrates the disciplines of entrepreneurship and development economics these contributions model and explore the role of the entrepreneur in key areas of concern for development economics such as structural change and economic growth income and wealth inequalities welfare poverty traps and market failures this introduction discusses and contextualizes these various contributions and their implications for further theoretical and empirical work

where do property rights matter more explaining the variation in demand for property titles across cities in mexico this paper examines the variation in the value of property rights to housing in mexico focusing specifically on differences between urban housing markets roughly 30 of owner occupied houses in mexico do not have a proper deed houses with no deed are estimated to be five percent less valuable than otherwise similar houses with a full deed yet this premium varies widely across cities i match data from the 2012 and 2014 national survey of household incomes and expenditures to different sources of city level data in order to examine hypotheses explaining this variation in a multilevel regression framework i find that deeds are valued more in cities with more highly educated residents more political competition and more voting measures of local economic activity degree of informality and the regulatory bureaucracy are not associated with higher value to full property rights additionally i find that more educated households value deeds more and having a deed is more valuable for larger houses in neighborhoods with less vacancy and higher infrastructure quality based on these results i suggest funds to subsidize titling should be redirected to places where titles are worth more more broadly i suggest policymakers reconsider framing property titling programs as poverty alleviation low income households would benefit more from subsidies for improvements to housing and residential infrastructure at the same time the federal government should further push to reduce the costs of transferring property

inter generational effects of titling programmes physical vs human capital abstractprogrammes aimed at giving legal ownership titles to the occupants of land titling programmes are associated with an income or wealth effect that induce higher expenditure on normal goods like education and health services there is also a substitution effect the elimination of expropriation risk makes home investment more attractive and increases the opportunity cost of other forms of spending the net effect on human capital is ambiguous using data from a natural experiment in uruguay we find that titling favours home investment to the detriment of some dimensions of human capital investment for children of 16 and under

life satisfaction and self employment a matching approach despite lower incomes the self employed consistently report higher satisfaction with their jobs but are self employed individuals also happier more satisfied with their lives as a whole high job satisfaction might cause them to neglect other important domains of life such that the fulfilling job crowds out other pleasures leaving the individual on the whole not happier than others moreover self employment is often chosen to escape unemployment not for the associated autonomy that seems to account for the high job satisfaction we apply matching estimators that allow us to better take into account the above mentioned considerations and construct an appropriate control group in terms of balanced covariates using the bhps dataset that comprises a large nationally representative sample of the british populace we find that individuals who move from regular employment into self employment experience an increase in life satisfaction up to 2 years later while individuals moving from unemployment to self employment are not more satisfied than their counterparts moving from unemployment to regular employment we argue that these groups correspond to opportunity and necessity entrepreneurship respectively these findings are robust with regard to different measures of subjective well being as well as choice of matching variables and also robustness exercises involving simulated confounders

enhancing capabilities through credit access creditworthiness as a signal of trustworthiness under asymmetric information article i nfo creditworthiness and trustworthiness are almost synonyms because under asymmetric information the act of conferring a loan has the indirect effect of signaling the trustworthiness of the borrower we test the creditworthiness trustworthiness nexus in an investment game experiment on a sample of participants non participants in a microfinance program in argentina and find that trustors give significantly more to and believe they will receive more from microfinance borrowers the first and second order beliefs of trustees are also consistent with this picture our findings then show that mf participants appear more trustworthy and this may help microfinance to work a related consequence is that if and only if borrower s trustworthiness is not public information the mere loan provision acts as a reputation enhancing signal increasing the borrower s attractiveness as a business partner in such case we have a channel through which a private financial intermediary contributes to the provision of a public good like information thereby

late career entrepreneurship income and quality of life late career transitions to entrepreneurship are discussed as a promising way to address some of the problematic implications of population aging by extending employment choice theory to simultaneously account for career stage and for non monetary rewards from entrepreneurship we investigate how late career transitions from organizational employment to entrepreneurship influence the returns from the monetary income and non monetary quality of life components of an individual s utility using data from the english longitudinal study of ageing our empirical analysis shows that for late career individuals starting a business is positively associated with change in quality of life and negatively associated with change in income

expanding credit access using randomized supply decisions to estimate the impacts expanding access to commercial credit is a key ingredient of financial development strategies there is less consensus on whether expanding access to consumer credit helps borrowers particularly when loans are extended at high interest rates popular skepticism about unproductive usurious lending is fueled by research highlighting behavioral biases that may induce overborrowing we estimate the impacts of expanding access to consumer credit at a 200 annual percentage rate apr using a field experiment and follow up data collection the randomly assigned marginal loans produced significant net benefits for borrowers across a wide range of outcomes there is also some evidence that the loans were profitable the author 2009 published by oxford university press on behalf of the society for financial studies all rights reserved for permissions please e mail journals permissions oxfordjournals org oxford university press

happiness and productivity some firms say they care about the well being and happiness of their employees but are such claims hype or scientific good sense we provide evidence for a classic piece rate setting that happ

property rights and intra household bargaining abstract this paper examines whether an individual level transfer of property rights increases the individual s bargaining power within the household the question is analyzed in the context of a housing reform that occurred in china that gave existing tenants the opportunity to purchase the homes that they had been renting from their state employers the rights to each housing unit were granted to a particular employee so property rights were defined at the individual level rather than the household level the results indicate that transferring ownership rights to men increased household consumption of some male favored goods and women s time spent on chores transferring ownership rights to women decreased household consumption of some male favored goods

viewpoint measuring and understanding subjective well being increasing attention is being paid in academic policy and public arenas to subjective measures of well being this promising trend represents a shift towards mea suring positive outcomes in psychology and greater realism in the study of economic behaviour we describe the main measures of subjective well being swb and provide ex amples of policy relevant research findings including new accountings of the differences in individual level swb assessments around the world and across canada these suggest a consistent pattern of life circumstances linked to swb and highlight the importance of social factors whose role has otherwise been hard to quantify in income equivalent terms

deposit insurance regulation and moral hazard in the thrift industry evidence from the 1930 s this paper compares risk taking of insured and uninsured thrifts operating under strict and less strict regulatory regimes during the 1930 s analysis of balance sheet data indicates that while newly insured thrifts undertook less risk than their uninsured counterparts possibly because of screening by deposit insurance authorities moral hazard emerged gradually insured institutions operating under relatively permissive regulatory regimes were more prone to undertake risky lending activities than their more tightly regulated counterparts possibly because of screening by deposit insurance authorities moral hazard emerged gradually insured institutions operating under relatively premissive regulatory regimes were more prone to undertake risky lending activities than their more tightly regulated counterparts given the current system of deposit insurance the results suggest that effective regulation and supervision will play a key role in maintaining thrift stability in the 1990s copyright 1992 by american economic association

insecurity of property rights and matching in the tenancy market this paper analyzes the functioning of land rental markets in the dominican republic using a new data set collected specifically to characterize the entire market we analyze the choice of the landlords and the tenants in the search for the optimal partner we show how insecure property rights leads to segmentation in the tenancy markets along socio economic group and hence severely limits access to land for the rural poor

property rights and water access evidence from land titling in rural peru summary insecure land tenure and property rights are an impediment to infrastructure access and services for households in many developing countries this paper explores whether alleviating this impediment through a land titling program in rural peru is associated with improvements in household water sources as well as sanitation and electricity services the economics literature on the links between property rights and investment decisions has amassed yet due to the necessity of water for life the high fixed costs associated with water infrastructure construction and the positive externalities that can result from water provision it is not obvious how water services might respond to land tenure improvements utilizing the phased in program timing in a quasi experimental design we exploit the differences in implementation timing across space in conjunction with the differences in program impact across households that held property titles prior to the project and those that did not results from this modified difference in differences method indicate that land titling is associated with small in magnitude but statistically significant increases in water access larger gains in sanitation and electricity services are found we investigate the channels through which this improved access occurs and find evidence of investments in all three services via either government or water utilities we find evidence of individual household investment only in the case of sanitation taken together these results indicate that land titles are important but not sufficient to increase access to water and other services

micro entrepreneurship and subjective well being evidence from rural bangladesh abstract microcredit has long been hailed as a powerful tool to promote livelihoods and reduce poverty through entrepreneurship however its impacts on people s subjective well being remain underexplored we present a unified theoretical framework for analyzing the effect of microcredit enabled entrepreneurship on overall life satisfaction a key manifestation of subjective well being empirically we apply an instrumental variable approach to a unique census like household survey conducted in three villages of bangladesh in 2013 in spite of having no direct effects we find that microcredit borrowing has an indirect negative effect on overall life satisfaction through increased worry on a positive note we find that female micro borrowers experience an increase in satisfaction with financial security and achievement in life we also provide evidence that micro borrowers with higher levels of assets experience an increase in satisfaction with financial security

economic and social impacts of an innovative self help group model in india summary we assess the impact of an approach in the indian state of andhra pradesh that combines micro credit with efforts to target the poor address their specific needs and enhance their economic potential our results support the pro poor nature of the program and point toward benefits in terms of female empowerment and nutritional intake but not asset formation or income for program participants and other villagers while study of longer term effects is desirable this suggests that even in the short term the program helped improve consumption smoothing and income diversification

can the west save africa in the new millennium the western aid effort toward africa has surged due to writ ings by well known economists a celebrity mass advocacy campaign and decisions by western leaders to make africa a major foreign policy priority this survey contrasts the predominant transformational approach west comprehensively saves africa to occasional swings to a marginal approach west takes one small step at a time to help individual africans evaluation of one step at a time initiatives is generally easier than that of transformational ones either through controlled experiments although these have been oversold or simple case studies where it is easier to attribute outcomes to actions we see two themes emerge from the literature survey 1 escalation as each successive western transformational effort has yielded disappointing results as judged at least by stylized facts since again the econometrics are shaky the response has been to try an even more ambitious effort and 2 the cycle of ideas rather than a progressive testing and discarding of failed ideas we see a cycle in aid ideas in many areas in africa with ideas going out of fashion only to come back again later after some lapse long enough to forget the previous disappointing experience both escalation and cyclicality of ideas are symptomatic of the lack of learning that seems to be characteristic of the transfor mational approach in contrast the marginal approach has had some successes in improving the well being of individual africans such as the dramatic fall in mortality

is microcredit a blessing for the poor a meta analysis examining development outcomes and contextual considerations abstract increasing efforts aim at economic development and the reduction of poverty in developing countries through microcredit enabled entrepreneurship following the award of the nobel peace prize to prof yunus microcredit lending has risen to prominence and the volume of microcredit loans has increased substantially however theory on the outcomes of this financing form is controversial furthermore the academic community lacks conclusive empirical evidence about the impact of such programs primary empirical studies report fragmented and to a large extent contradictory results in this meta analysis we empirically synthesize a total of 545 quantitative empirical findings from 90 studies conducted to date our findings reveal a positive impact of microcredit on key development outcomes at the level of the client entrepreneurs additionally we scrutinize how the development context influences the effectiveness of microcredit and find that microcredit generally has a greater impact in more challenging contexts with our findings we contribute to research on the nexus of entrepreneurship and economic development and offer recommendations for practitioners and academics working on this promising frontier

incentives and the de soto effect this paper explores the consequences of improving property rights to facilitate the use of fixed assets as collateral popularly attributed to the influential policy advocate hernando de soto we use an equilibrium model of a credit market with moral hazard to characterize the theoretical effects and also develop a quantitative analysis using data from sri lanka we show that the effects are likely to be nonlinear and heterogeneous by wealth group they also depend on the extent of competition between lenders there can be significant increases in profits and reductions in interest rates when credit markets are competitive however since these are due to reductions in moral hazard that is increased effort the welfare gains tend to be modest when cost of effort is taken into account allowing for an extensive margin where borrowers gain access to the credit market can make these effects larger depending on the underlying wealth distribution

the effect of lender identity on a borrowing firm s equity return previous research demonstrates that a firm s common stock price tends to fall when it issues new public securities by contrast commercial bank loans elicit significantly positive borrower returns this article investigates whether the lender s identity influences the market s reaction to a loan announcement although we find no significant difference between the market s response to bank and nonbank loans we do find that lenders with a higher credit rating are associated with larger abnormal borrower returns this evidence complements earlier findings that an auditor s or investment banker s perceived quality signals valuable information about firm value to uninformed market investors previous studies show that certain types of loan announcements generate significantly positive abnormal returns to the average borrower s equity 1 this finding contrasts with the negative equity returns generally associated with a corporation s issuance of public securities smith 1986 this difference in market reactions indicates that private and public securities are not perfect substitutes for the average firm in this sense lender identity defined as public versus private lender significantly impacts the borrower s abnormal equity return the standard theoretical explanation for this difference is that private lenders either obtain private information about the firm s value or they have the incentive and ability to monitor firm behavior more effectively than other outside monitors can although the empirical literature on private lending has evaluated primarily commercial bank loans and lines of credit these theoretical arguments apply equally to any type of private

impacts of land certification on tenure security investment and land market participation evidence from ethiopia this brief summarizes the results of a gender impact evaluation study entitled impacts of land certification on tenure security investment and land market participation evidence from ethiopia conducted between 2006 and 2011 in ethiopia the study observed the impact of land registration on tenure security land related investment and rental market participation using 900 randomly selected households and 4000 plots cultivated by the households on the household and land plots level certification resulted in significant reduction of tenure insecurity and an increase in land related investment the propensity to invest in water conservation increased between 20 and 30 percent from panel estimates the increased investment appears to be sustained over the long term the propensity to rent land increases by 9 to 13 percent the titling had significant positive impacts on the rate at which female headed households rented their land funding for the study derived from the gender action plan global land tools network and norwegian environmentally and socially sustainable development essd trust fund

using market information in prudential bank supervision a review of the u s empirical evidence in principle market and government supervision provide alternative devices for controlling governing any type of corporation most national governments have instituted nonmarket regulatory mechanisms for banking firms on the grounds that market based mechanisms do not adequately discipline banks but what evidence supports this assessment why must governments assure bank solvency but not the solvency of other firms government oversight naturally displaces private efforts to evaluate and control financial firms moreover if the banking business changes over time as it assuredly has in the past decade or two the best combination of government and private supervision may change concurrently this paper reviews and evaluates the growing empirical literature on private investors abilities to assess the financial condition of banking firms the evidence supports the proposition that market investors and analysts could reasonably provide a greater proportion of corporate governance services for large traded u s financial firms

land tenure systems and their impacts on agricultural investments and productivity in uganda this article provides an empirical analysis of the impact of different tenure systems mailo customary and public land on agricultural investment and productivity in central uganda a major hypothesis tested is that land investments and practices may have both economic and tenure security implications the results indicate that coffee planting is used by farmers to enhance tenure security while fallowing is practised to a greater extent by farmers on more secure holdings this supports the notion that farmers consider tenure implications when making investments and that different tenure systems do not inhibit the promotion of tree planting investment tenure had no impact on the productivity of crop farming

anarchy self governance and legal titling scholars and policymakers prescribe legal titling to improve prospects for economic development and political order however a public choice literature exists that has long recognized that self governance often works well and that the state may not be able to improve upon local economic institutions at reasonable cost although the implication that legal titling should proceed with caution is seemingly straightforward the literature on legal titling does not take anarchy seriously as a policy option in addition there is a public choice literature that presumes the state is the most important source of property rights this essay fills this gap in the property rights literature by applying the concept of efficient anarchy to legal titling in afghanistan original fieldwork evidence from rural afghanistan suggests that anarchy of land governance is a better option than legal titling the essay concludes by opening up the black box of state building by explaining why it often makes sense to sequence improvements in political capacity and political constraints prior to investing in legal titling

bankers at the gate microfinance and the high cost of borrowed logics in this paper we examine how the interaction between influences of commercial banking and poverty alleviation shaped the evolution of modern microfinance using institutional theory as a lens we observe that the commercial banking logic increasingly displaced the microfinance field s foundational poverty alleviation and development principles over time we argue that this process of displacement can occur inadvertently as organizations that embody multiple logics draw disproportionately on only one of those logics when developing legitimating accounts of their activity to stakeholders furthermore we introduce the concept of permeability the extent to which the elements of a logic are ambiguous and loosely coupled to explain why some logics may be more or less open to the influence of other logics we conclude by discussing implications for entrepreneurship and poverty alleviation more generally

on the determinants of slum formation we construct a simple model of a city with heterogeneous agents and housing choice to explain the determinants of slums home to about one third of the urban population in developing countries the model supports the main empirical evidence regarding slum formation and is able quantitatively to assess the role of each determinant of slum growth we show that urban poverty inequality and rural urban migration explain much of the variation in slum growth in brazil from 1980 to 2000 ex ante evaluation of the impacts of policy interventions shows that removing barriers to formalisation has a strong impact on slum reduction

which banks choose deposit insurance evidence of adverse selection and moral hazard in a voluntary insurance system this article investigates adverse selection and moral hazard in the voluntary deposit insurance system of kansas which operated from 1909 to 1929 regulations were imposed to limit risk taking and membership was made voluntary to assuage objections that insurance forces conservative banks to protect depositors of high risk institutions the authors find however that risk prone banks were the most likely to join the system at its inception using a simultaneous equations model they also detect both adverse selection and moral hazard behavior throughout the system s first ten years copyright 1995 by ohio state university press

the federal home loan bank system the lender of next to last resort the federal home loan bank fhlb system is a large complex and understudied government sponsored liquidity facility that currently has more than 1 trillion in secured loans outstanding mostly to commercial banks and thrifts this paper first documents the significant role played by the fhlb system at the outset of the ongoing financial crisis and then provides evidence about the uses of these funds by their bank and thrift members we then identify the trade offs faced by fhlb member borrowers when choosing between accessing the fhlb system or the federal reserve s discount window during the crisis we conclude by describing the fragmented u s lender of last resort framework and finding that additional clarity about the respective roles of the various liquidity facilities would be helpful

housing demand and housing policy in urban bangladesh this paper estimates demand for housing and its attributes in urban bangladesh using a survey of 4400 owner renter and squatter households the results revealed that housing demand is inelastic with respect to income and price and price elasticity is less than income elasticity in absolute terms estimates of demand for housing attributes showed that owner and renter households value structural quality sanitation and electricity as well as a living room and dining room kitchen squatter households value living space pit latrine water supply and electricity but place less emphasis on structural quality irrespective of these submarkets income improvement strategies are likely to be the most effective means of enhancing housing consumption the rental submarket might be improved by rent liberalisation while slum improvement strategies should focus on tenure security and incremental improvement however contrary to current practice the emphasis should be on the size of squatter dwellings rather than on their structural quality

entitled to work urban property rights and labor supply in peru this brief summarizes the results of a gender impact evaluation study entitled entitled to work urban property rights and labor supply in peru new legal rights were issued in 1996 project teams providing titling service through 2003 in peru the study observed that between 1996 and 2003 the peruvian government issued property titles to over 1 2 million urban households the largest titling program targeted at urban squatters in the developing world this paper examines the labor market effects of increases in tenure security resulting from the program pre program squatters in program neighborhoods were significantly more likely to report improved tenure security by 60 percent similarly program participants were 18 8 percentage points less likely to report a high likelihood of eviction or invasion and 18 8 percentage points more likely to report that their dwelling was currently very secure from eviction or invasion the likelihood of working inside the home significantly falls by 11 6 percentage points for the average squatter family with two program periods

entrepreneurship as a solution to poverty individuals living in poverty remain a critical issue this special issue focuses on how entrepreneurship can help to solve such poverty rather than viewing those in poverty as a market for goods the solution lies in understanding how to help those living in poverty create their own businesses ultimately entrepreneurship among those in poverty will create a long lasting solution to their poverty herein we initially examine the extant knowledge about entrepreneurship we then examine where future research on this important topic should move finally we introduce the five articles that make up this special issue these five articles came from the initial 71 submissions and enhance our knowledge about entrepreneurship as a pathway to reducing poverty

land property rights and resource allocation abstractin this paper we review the most significant empirical literature on the causal effects of land property rights the literature indicates that secure property rights boost investment in both rural and urban areas these effects however do not appear to be the result of improved credit conditions in rural areas clear land rights also lead to increases in productivity and farm earnings in contrast for urban areas the evidence for an effect on earnings is mixed we find little empirical evidence to suggest that land titling programs enhance the development of land markets finally some evidence suggests that land titling induces changes in household structure that foster human capital accumulation and may help to increase the incomes of future generations

credit constraints job mobility and entrepreneurship evidence from a property reform in china this paper provides new evidence on the impact of private property rights on entrepreneurship i explore this issue in the context of a housing reform in urban china that allowed state employees renting state owned housing the opportunity to buy their homes at subsidized prices using the reform as an exogenous change in the capital constraints and mobility costs that inuence individuals entry

property rights for the poor effects of land titling secure property rights are considered a key determinant of economic development the evaluation of the causal effects of property rights however is a difficult task as their allocation is typically endogenous to overcome this identification problem we exploit a natural experiment in the allocation of land titles in 1981 squatters occupied a piece of land in a poor suburban area of buenos aires in 1984 a law was passed expropriating the former owners land to entitle the occupants some original owners accepted the government compensation while others disputed the compensation payment in the slow argentine courts these different decisions by the former owners generated an exogenous allocation of property rights across squatters using data from two surveys performed in 2003 and 2007 we find that entitled families substantially increased housing investment reduced household size and enhanced the education of their children relative to the control group these effects however did not take place through improvements in access to credit our results suggest that land titling can be an important tool for poverty reduction albeit not through the shortcut of credit access but through the slow channel of increased physical and human capital investment which should help to reduce poverty in future generations

the information content of bank exam ratings and subordinated debt prices do supervisory examinations of large commercial banking firms produce useful information not already reflected in market prices to investigate this question we apply a new research methodology to data on bank exam ratings and the subordinated debt risk spreads of their parent holding companies we find that government exams do produce new value relevant information that debenture prices do not immediately reflect this information and that the market prices the likely regulatory actions implied by this information these results have implications for market versus regulatory discipline at large banking firms and for proposals to make subordinated debt mandatory for these firms

property rights on first nations reserve land this paper examines the economic effects of existing private property rights on first nations reserves we focus on three regimes of land tenure lawful possession designated land and permits these land regimes have been used to create individual landholdings and grant secure and transferable rights of use of reserve land using confidential census microdata and rich administrative data we find evidence of a positive relationship between the use of these tenure regimes and homeownership rates housing conditions and band s public spending we also observe a positive relationship with average income however this last result is driven by the inflow of a non indigenous population not by improvements in indigenous households income or on reserve employment our findings thus suggest that while reforms to individual property rights on reserve have some positive effects their scope remains limited and they are unlikely to constitute a transformative tool to alleviate poverty on reserve droits de propriete sur les terres de reserve des premieres nations cet article examine les effets economiques des droits prives de propriete existants sur les reserves des premieres nations nous nous attardons sur trois modes de possession des terres la possession legitime les terres designees et les permis ces regimes ont ete utilises a la fois pour creer des proprietes foncieres individuelles sur des terres de reserve mais egalement pour garantir les droits d utilisation proteges et transmissibles y afferant a l aide de micro donnees de recensement confidentielles et d abondantes ressources administratives nous avons decouvert une relation positive entre l utilisation de ces regimes fonciers et les taux d accession a la propriete les conditions de logement et les depenses publiques des premieres nations nous avons egalement observe un rapport positif avec le salaire moyen cependant cette derniere observation resulte davantage d un afflux d une population non autochtone plutot que d une reelle amelioration des revenus des autochtones ou de l emploi dans les reserves ainsi et bien que les reformes pour l acces a la propriete privee dans les reserves ont eu quelques effets positifs nos resultats suggerent que leur portee reste limitee et qu elles ne constituent pas de reels outils de transformation pour reduire la pauvrete dans les reserves

micro credit initiatives for equitable and sustainable development who pays abstract there is a growing acknowledgement that micro credit programs have potential for equitable and sustainable development however my anthropological research on the micro credit program of the grameen bank shows that bank workers are expected to increase disbursement of loans among their members and press for high recovery rates to earn profit necessary for economic viability of the institution to ensure timely repayment in the loan centers bank workers and borrowing peers inflict an intense pressure on women clients in the study community many borrowers maintain their regular payment schedules through a process of loan recycling that considerably increases the debt liability on the individual households increases tension and frustration among household members produces new forms of dominance over women and increases violence in society

peer monitoring and credit markets a major problem for institutional lenders is ensuring that borrowers exercise prudence in the use of the funds so that the likelihood of repayment is enhanced one partial solution is peer monitoring having neighbors who are in a good position to monitor the borrower be required to pay a penalty if the borrower goes bankrupt peer monitoring is largely responsible for the successful financial performance of the grameen bank of bangladesh and of similar group lending programs elsewhere but peer monitoring has a cost it transfers risk from the bank which is in a better position to bear risk to the cosigner in a simple model of peer monitoring in a competitive credit market this article demonstrates that the transfer of risk leads to an improvement in borrowers welfare

cost of debt and federal home loan bank funding at u s bank and thrift holding companies abstractwe investigate the relationship between the cost of debt issued by bank holding companies bhcs and thrift holding companies thcs and their use of federal home loan bank fhlb advances cost of debt is used as a measure of bank riskiness for the first time in a fhlb study a two equation model of fhlb advances and cost of debt is estimated three main results are obtained first greater reliance on advances by bhcs and thcs is associated with lower cost of debt in the pre crisis period and more strongly so during the crisis because granting of advances sends a positive signal to the market about fhlb s support second greater holding company hc cost of debt as an explanatory variable is associated with smaller advances as fhlbs restrict advances to riskier hcs third we find no separate effect on the cost of debt from fhlb membership our results are robust to 3sls estimation used to address endogeneity and to alternative model specifications the negative association between cost o

the mystery of capital formation in sub saharan africa women property rights and customary law summary economists such as hernando de soto have argued that clearly defined property rights are essential to capital formation and ultimately to economic growth and poverty alleviation this article traces two impediments to the clear definition of property rights in the african context customary law and the status of women both of these issues interfere with the attempt of african countries to rearticulate property law with the goal of capital formation constructive attempts to define property rights must address the problem of enforcement in under resourced environments where changes may not be welcomed

village political economy land tenure insecurity and the rural to urban migration decision evidence from china this paper investigates the impact of land tenure insecurity on the migration decisions of china s rural residents a simple model first frames the relationship among these variables and the probability that a reallocation of land will occur in the following year after first demonstrating that a village leader s support for administrative land reallocation carries with it the risk of losing a future election the paper exploits election timing and village heterogeneity in lineage group composition and demographic change to identify the effect of land security in response to an expected land reallocation in the following year the probability that a rural resident migrates out of the county declines by 2 8 percentage points which accounts for 17 5 percent of the annual share of village residents aged 16 to 50 who worked as migrants during the period this finding underscores the potential importance of secure property rights for facilitating labor market integration and the movement of labor out of agriculture

does relationship specific investment depend on asset ownership evidence from a natural experiment in the housing market the classic hold up model grossman and hart 1986 predicts that allocations of asset ownership which expose a party to expropriation reduce relationship specific investments by this party in the empirical context of t he housing market i show that the hold up model predicts more relationship specific investments such as bathroom renovations in owner occupied housing than in rental housing i confirm this prediction for the german housing market to ob tain an exogenous variation of asset home ownership i use the natural experiment of the german reunification under the communist regime ownership exist ed but was economically meaningless it was a quasi random by product of dwelling choice yet after reunification ownership unexpectedly reacquired legal fo rce

property rights and investment in urban slums this paper examines the effect of changes in tenure security on residential investment in urban squatter neighborhoods to address the endogeneity of property rights i make use of variation in ownership status induced by a nationwide titling program in peru in a difference in difference analysis i compare the change in housing investment before and after the program among participating households to the change in investment among two samples of nonparticipants my results indicate that strengthening property rights in urban slums has a significant effect on residential investment the rate of housing renovation rises by more than two thirds of the baseline level the bulk of the increase is financed without the use of credit indicating that changes over time reflect an increase in investment incentives related to lower threat of eviction jel o12 o18 p25 p26

venture capital entrepreneurship and economic growth abstract using a panel of u s metropolitan areas we find that increases in the supply of venture capital positively affect firm starts employment and aggregate income our results remain robust to a variety of specifications including ones that address endogeneity the estimated magnitudes imply that venture capital stimulates the creation of more firms than it funds which appears consistent with two mechanisms first would be entrepreneurs anticipating financing needs more likely start firms when the supply of capital expands second funded companies may transfer know how to their employees thereby enabling spin offs and may encourage others to become entrepreneurs through demonstration effects

empowerment and efficiency tenancy reform in west bengal the paper analyzes the effect of agricultural tenancy laws offering security of tenure to tenants and regulating the share of output that is paid as rent on farm productivity theoretically the net impact of tenancy reform is shown to be a combination of two effects a bargaining power effect and a security of tenure effect analysis of evidence on how contracts and productivity changed after a tenancy reform program was implemented in the indian state of west bengal in the late 1970s suggests that tenancy reform had a positive effect on agricultural productivity there

do federal home loan bank membership and advances increase bank risk taking since the early 1990s commercial banks have turned to federal home loan bank fhlbank advances to plug the gap between loan and deposit growth is this trend worrisome on the one hand advances implicitly encourage risk by insulating borrowers from market discipline on the other advances give borrowers greater flexibility to managing interest rate and liquidity risk and access to fhlbank funding encourages members to reshape their balance sheets in ways that could lower credit risk using quarterly financial and supervisory data for banks from 1992 to 2005 we assess the effect of fhlbank membership and advances on risk the evidence suggests liquidity and leverage risks rose modestly but interest rate risk declined somewhat credit risk and overall failure risk were largely unaffected although the evidence suggest fhlbank membership and advances have had at best only a modest impact on bank risk we caution that our sample period constitutes one observation and that moral hazard could be pronounced if leverage ratios revert to historical norms

self employment in the developing world summary this paper analyzes heterogeneity among the self employed in 74 developing countries representing two thirds of the population of the developing world after profiling how worker characteristics vary by employment status it classifies self employed workers outside agriculture as successful or unsuccessful entrepreneurs based on two measures of success whether the worker is an employer and whether the worker resides in a non poor household four main findings emerge first jobs exhibit a clear pecking order with household income and worker education highest for employers followed by wage and salaried employees non agricultural own account workers non agricultural unpaid family workers and finally agricultural workers second a substantial minority of own account workers reside in non poor households suggesting that their profits are often a secondary source of household income third as per capita income increases across countries the structure of employment shifts rapidly first out of agriculture into unsuccessful non agricultural self employment and then mainly into non agricultural wage employment finally roughly one third of the unsuccessful entrepreneurs share similar characteristics with their successful counterparts suggesting they have the potential to be successful but face constraints to growth the authors conclude that although interventions such as access to credit can benefit a substantial portion of the self employed effectively targeting the minority of self employed with higher growth potential is important particularly in low income contexts the results also highlight the potential benefits of policies that facilitate shifts in the nature of work first from agricultural labor into non agricultural self employment and then into wage and salaried jobs

poverty and the varieties of entrepreneurship in the pursuit of prosperity abstract in this paper we revisit the entrepreneurship and poverty relationship under a eudaimonic perspective that brings together conversion factors and future prosperity expectations based on an fsqca of changes in life circumstances of 166 farm households in rural kenya we explore how different combinations of conversion factors enable distinct forms of entrepreneuring in the pursuit of prosperity results show that strong entrepreneurship enabled future prosperity expectations result from three combinations of enabling conversion factors shaping up three varieties of entrepreneurial endeavors family frugal individual market and family inwards which show a much more diverse and counterintuitive reality our research contributes to literature by revealing and theorizing on a split picture portraying the many ways in which farmers acting as everyday entrepreneurs exploit real opportunities in seemingly identical impoverished communities it also reveals a central disconnect between entrepreneurship life satisfaction and financial improvements when assessed against expectations of future prosperity in doing so this paper responds to calls for a better understanding of the processes whereby entrepreneurship can distinctively improve current and future life circumstances and the many ways in which this may happen