Abhijit Banerjee

Abhijit Banerjee
Reliance Industries Limited · Insurance

About

97
Publications
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12,321
Citations

Publications

Publications (97)
Article
Redistribution programs in developing countries often “leak” because local officials do not implement programs as the central government intends. We study one approach to reducing leakage. In an experiment in over 550 villages, we test whether mailing cards with program information to targeted beneficiaries increases the subsidy they receive from a...
Article
The promise of randomized controlled trials is that evidence gathered through the evaluation of a specific program helps us—possibly after several rounds of fine-tuning and multiple replications in different contexts—to inform policy. However, critics have pointed out that a potential constraint in this agenda is that results from small “proof-of-c...
Article
Full-text available
We present results from six randomized control trials of an integrated approach to improve livelihoods among the very poor. The approach combines the transfer of a productive asset with consumption support, training, and coaching plus savings encouragement and health education and/or services. Results from the implementation of the same basic progr...
Article
Under the Thumb of History? Political Institutions and the Scope for Action This paper discusses the two leading views of history and political institutions. For some scholars, institutions are mainly products of historical logic, while for others, accidents, leaders, and decisions have a significant impact. We argue that while there is clear evide...
Article
We examine individuals' abilities to identify the highly central people in their social networks, where centrality is defined by diffusion centrality (Banerjee et al., 2013), which characterizes a node's influence in spreading information. We first show that diffusion centrality nests standard centrality measures -- degree, eigenvector and Katz-Bon...
Article
To study the impact of the choice of injection points in the diffusion of a new product in a society, we developed a model of word-of-mouth diffusion and then applied it to data on social networks and participation in a newly available microfinance loan program in 43 Indian villages. Our model allows us to distinguish information passing among neig...
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This paper estimates the effect of access to transportation networks on regional economic outcomes in China over a twenty-period of rapid income growth. It addresses the problem of the endogenous placement of networks by exploiting the fact that these networks tend to connect historical cities. Our results show that proximity to transportation netw...
Article
Institutions in developing countries, particularly those inherited from the colonial period, are often thought to be subject to strong inertia. This study presents the results of a unique randomized trial testing whether these institutions can be reformed through incremental administrative change. The police department of the state of Rajasthan, In...
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Full-text available
Does completing a household survey change the later behavior of those surveyed? In three field studies of health and two of microlending, we randomly assigned subjects to be surveyed about health and/or household finances and then measured subsequent use of a related product with data that does not rely on subjects' self-reports. In the three healt...
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Full-text available
Between 1863 and 1890, phylloxera destroyed 40% of French vineyards. Using the regional variation in the timing of this shock, we identify and examine the effects on adult height, health, and life expectancy of children born in the years and regions affected by the phylloxera. The shock decreased long-run height, but it did not affect other dimensi...
Article
This paper shows how the productive interplay of theory and experimental work has furthered our understanding of credit markets in developing countries. Descriptive facts motivated a body of theory, which in turned motivated experiments designed to test it. Results from these experiments reveal both the success and the limits of the theory, prompti...
Article
How does uncertainty and credit constraints affect the cyclical composition of investment and thereby volatility and growth? This paper addresses this question within a model where firms engage in two types of investment: a short-term one; and a long-term one, which contributes more to productivity growth. Because it takes longer to complete, long-...
Article
Randomized experiments have become a popular tool in development economics research and have been the subject of a number of criticisms. This paper reviews the recent literature and discusses the strengths and limitations of this approach in theory and in practice. We argue that the main virtue of randomized experiments is that, owing to the close...
Article
We analyze a model of lending in which loan o¢ cers face both an incentive to lend, and the possibility of penalties for making loans that go bad. The model predicts the following: loan o¢ cer incentives will be at, and …rms may face credit constraints in equilibrium. Outside monitoring may alleviate these credit constraints, but may also lead to i...
Article
Participation of beneficiaries in the monitoring of public services is increasingly seen as a key to improving their efficiency. In India, the current government flagship program on universal primary education organizes both locally elected leaders and parents of children enrolled in public schools into committees and gives these groups powers over...
Article
This paper uses household surveys from 13 developing countries to describe consumption choices, health and education investments, employment patterns and other features of the of the economic lives of the “middle classes” defined as those whose daily consumption per capita is between $2 and $4 or between $6 and $10. The data shed lights on differen...
Article
This paper focuses on the relationship between public action and access to public goods. It begins by developing a simple model to capture the various mechanisms that are discussed in the theoretical literature on collective action. We use the model to illustrate the special assumptions embedded in many popular theories of collective action and sho...
Article
The purpose of the data collection was to evaluate two programs implemented by Pratham, an Indian NGO. The first program, remedial education, was implemented from 2001-2003 in Vadodara and Mumbai. The second program, a computer-aided learning program, was implemented in Vadodara only from 2001-2004. Data included in this study are results from pre-...
Article
This data set contains data on the health histories of, and access to healthcare facilities for, individuals located in the Udaipur districts of Rajasthan, India. Data was collected at the household level, as well as at the individual level, separately for adults and children. Also, private and public healthcare facilities located in the area were...
Article
Most credit in India is provided by public-sector banks. Previous research has found that loan officers in public banks decline profitable lending opportunities, and are strikingly reluctant to enhance loans of growing and profitable firms. Loan officers in government owned banks often cite fear of prosecution for corruption as a reason for their r...
Article
A central plank of public policy for improving primary education services in India is the participation of village education committees, consisting of village government leaders, parents, and teachers. This paper reports the findings from a survey in a rural district in Uttar Pradesh. Rural households, parents, teachers and VEC members were surveye...
Article
We investigate whether timing of the elections leads to riots or not within India. In other words, does timing of elections instigate riots? The theoretical underpinning is that an incumbent government and opposition parties exercises control over their agents to instigate communal mob violence and riots during the election years. The motto behind...
Article
This paper provides estimates of the long-term effects on height and health of a large income shock experienced in early childhood. Phylloxera, an insect that attacks the roots of grape vines, destroyed 40% of French vineyards between 1863 and 1890, causing major income losses among wine growing families. Because the insects spread slowly from the...
Article
This paper focuses on the relationship between public action and access to public goods. It begins by developing a simple model of collective action which is intended to capture the various mechanisms that are discussed in the theoretical literature on collective action. We argue that several of these intuitive theoretical arguments rely on special...
Article
The 1990 World Development Report from the World Bank defined the “extremely poor” people of the world as those who are currently living on no more than $1 per day per person. But how actually does one live on less than $1 per day? This essay is about the economic lives of the extremely poor: the choices they face, the constraints they grapple with...
Article
Absent providers are a major problem both for public health facilities and primary schools in many developing countries. For example, in India, absence rates for teachers are over 24 percent, and for health providers they are over 40 percent. This paper presents evidence on a number of innovative strategies to reduce absenteeism in government- and...
Article
Full-text available
The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The find...
Article
This evaluation of World Bank research between 1998 and 2005 was carried out by a panel consisting of Abhijit Banerjee (MIT), Angus Deaton (Princeton, chair), Nora Lustig (UNDP), and Kenneth Rogoff (Harvard.) The panel selected a large random sample of research projects, which were read and assessed by a team of 25 evaluators. Panel members also so...
Article
Many efforts to improve school quality by adding school resources have proven to be ineffective. This paper presents the results of two experiments conducted in Mumbai and Vadodara, India, designed to evaluate ways to improve the quality of education in urban slums. A remedial education program hired young women from the community to teach basic li...
Book
It has long been recognized that productivity growth and the business cycle are closely interrelated. Yet, until recently, the two phenomena have been investigated separately in the economics literature. This book provides the first consistent attempt to analyze the effects of macroeconomic volatility on productivity growth, and also the reverse ca...
Article
We examine how credit constraints affect the cyclical behavior of productivity-enhancing investment and thereby volatility and growth. We first develop a simple growth model where firms engage in two types of investment: a short-term one and a long-term productivity-enhancing one. Because it takes longer to complete, long-term investment has a rela...
Article
We introduce intentional idiosyncratic play in a standard stochastic evolutionary model of equilibrium selection in bargaining games. We define intentional mutations as rare play of mixed strategies that are supported only on the set of strategies that would give the idiosyncratic player a higher payoff were it to become an equilibrium. In contract...
Article
This article presents data on the evolution of top incomes and wages for 1922--2000 in India using individual tax return data. The data show that the shares of the top 0.01 percent, 0.1 percent, and 1 percent in total income shrank substantially from the 1950s to the early to mid-1980s but then rose again, so that today these shares are only slight...
Article
We examine the influence of three historically important sources of social divisions on the availability of public goods in rural India: colonial power, landowner-peasant relations as determined by the land tenure system and social fragmentation based on the Hindu caste system and the presence of sizable religious minorities. Using data on public g...
Article
We analyze the colonial land revenue institutions set up by the British in India, and show that differences in historical property rights institutions lead to sustained differences in economic outcomes. Areas in which proprietary rights in land were historically given to landlords have significantly lower agricultural investments and productivity i...
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Full-text available
In recent years a group of researchers at Cambridge (UK) have (re)introduced conceptions of open and closed systems into economics. In doing so they have employed these categories in ways that, in my assessment, both facilitate a significant critique of current disciplinary practices and also point to more fruitful ways of proceeding. In an issue o...
Article
This article uses variation in access to a targeted lending program to estimate whether firms are credit constrained. While both constrained and unconstrained firms may be willing to absorb all the directed credit that they can get (because it may be cheaper than other sources of credit), constrained firms will use it to expand production, while un...
Article
This paper introduces a framework for analyzing the role of financial factors as a source of instability in small open economies. Our basic model is a dynamic open economy model with a tradeable good produced with capital and a country-specific factor. We also assume that firms face credit constraints, with the constraint being tighter at a lower l...
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Full-text available
This paper examines the impact of the 1993 Land Law of Vietnam which gave households the power to exchange, transfer, lease, inherit and mortgage their land-use rights. We use household surveys before and after the law was passed, together with the considerable variation across provinces in the speed of implementation of the reform to identify the...
Article
This paper presents a general equilibrium currency crisis model of the ‘third generation’, in which the possibility of currency crises is driven by the interplay between private firms’ credit-constraints and nominal price rigidities. Despite our emphasis on microfoundations, the model remains sufficiently simple that the policy analysis can be cond...
Article
This paper studies the effect of community identity on investment behaviour in the knitted garment industry in the South Indian town of Tirupur. We document very large and systematic differences in both levels of capital stock and the capital intensity of production in firms owned by people from two different community groups. We argue that the dif...
Article
This paper reports on a survey conducted in rural Udaipur to gauge the delivery of health care and the impact it has on the health status of the largely poor population of the region. The study shows that the quality of public service is extremely low and that unqualified private providers account for the bulk of health care provision. The low qual...
Article
Explores the foundations of policy making in developing countries. Goal is to spell out various policy options and to quantify the trade-offs between them. Special emphasis on education, health, gender, fertility, adoption of technological innovation, and the markets for land, credit, and labor. From the course home page: Course Description In this...
Article
This paper sheds light on the dynamics of international labor migration by examin-ing how domestic and foreign economic shocks affect the departure and return of overseas Filipino workers. In a time-series of cross-sections of Philippine households, I find that neg-ative domestic income shocks (due to unusual rainfall) make households less likely t...
Article
This paper uses a novel approach to shed light on the impact of remittances on child human capital in the Philippines. Overseas Filipino workers send remittances home from many foreign countries, so exchange rate fluctuations due to the 1997 Asian financial crisis generated large, heterogeneous shocks to the incomes of these workers' origin househo...
Article
We show that the effect of eviction threats on unobservable investment effort can be positive. We demonstrate this apparently counter-intuitive result in a model of tenancy where investment by a tenant in the current period raises the chances of doing well in the next period, and therefore retaining the job in the period after next period. If the t...
Article
This Paper presents data on the evolution of top incomes and wages from 1956 to 2000 in India using individual tax returns data. Our data shows that the shares of the top 0.01%, the top 0.1% and the top 1% in total income shrank very substantially until the early-to-mid 1980s, but then went back up again, so that today these shares are only slightl...
Article
Full-text available
During the last two decades West Bengal has led the rest of the country with regard to agricultural performance and implementation of panchayat institutions. But these developments have begun to level out. At the same time the state has fallen behind in other sectors--industry, higher education and state of public finances, particularly--to an exte...
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Full-text available
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 o...
Article
Agricultural issues: peasant behavior, land tenancy, and interlinked markets. Credit and insurance market problems and institutions. Health, nutrition, and productivity. Gender bias. Education. Technological change. Government failures.
Article
This paper examines, theoretically and empirically, the determinants of collective success in the maintenance of infrastructure projects. The empirical analysis employs primary data collected by the author on 132 community-maintained infrastructure projects in Northern Pakistan. Determinants are grouped into community-specific and project-specific...
Article
This paper presents a theory of rent seeking within farmer cooperatives in which inequality of asset ownership affects relative control rights of different groups of members. The two key assumptions are constraints on lump-sum transfers from poorer members and disproThis paper could not have been completed without the support and encouragement that...
Article
This paper presents a simple model of currency crises which is driven by the interplay between the credit constraints of private domestic firms and the existence of nominal price rigidities. The possibility of multiple equilibria, including a ‘currency crisis’ equilibrium with low output and a depreciated domestic currency, results from the followi...
Article
We think of voice as a means of information aggregation within groups operating in a variety of settings. We explore how the characteristics of groups and their leaders influence voice. In relatively homogeneous groups, members farthest away from the leader have the best incentives to provide information, and their voice tends to moderate policy de...
Article
Full-text available
This paper presents a theory of rent seeking within farmer cooperatives in which inequality of asset ownership affects relative control rights of different groups of members. The two key assumptions are constraints on lump-sum transfers from poorer members and disproportionate control rights wielded by wealthier members. Transfers of rents to the l...
Article
Full-text available
We present new data on the regulation of entry of start-up firms in 75 countries. The data set contains information on the number of procedures, official time, and official cost that a start-up must bear before it can operate legally. The official costs of entry are extremely high in most countries. Countries with heavier regulation of entry have h...
Article
Full-text available
This paper introduces a framework for analyzing the role of financial factors as a source of stability in small open economies. Our basic model is a dynamic open economy with a tradeable good produced with capital and a country-specific factor. We also assume that firms face credit constraints, with the constraint being tighter at a lower level of...
Article
This paper examines evidence of the role that reputation plays in determining contractual outcomes. We conduct an empirical analysis of the Indian customized software industry, using a data set we collected containing detailed information on 230 projects carried out by 125 software firms. We propose a model ofthe industry where reputation determine...
Article
When the automobile was developed near the beginning of the last century, it was the relatively new fuel gasoline, not the familiar ethanol that became the fuel of choice. We examine the intersections of the early development of the automobile and the petroleum industry and consider the state of the agriculture sector during the same period. Throug...
Article
This paper studies the effects of social network based lending. This is a pervasive phenomenon in most of the developing world. Access to such network capital has an obvious influence on investment. It also influences the pattern of migration since, ceteris paribus, migrants would prefer to be in locations where they have access to their community'...
Article
This paper explores the relationship between ethnic diversity and local school funding in Kenyan primary schools. The empirical results paint a picture of pervasive local collective action problems in ethnically diverse Kenyan primary schools. Local ethnic diversity is robustly associated with lower local school funding, less parental involvement i...
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This paper develops a simple macroeconomic model that shows that combining capital market imperfections together with unequal access to investment opportunities across individuals can generate endogenous and permanent fluctuations in aggregate GDP, investment, and interest rates. Reducing inequality of access may be a necessary condition for macroe...
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Full-text available
The recent East Asian crisis has highlighted the relationship between financial development and output volatility. In this essay we develop a simple model of a small open economy producing a tradeable good using a non-tradeable input and where firms access to borrowings and investment depends on current cash flows. We then show, first that macroeco...
Article
Full-text available
We analyze the effect of agricultural tenancy laws that offer security of tenure to tenants and regulate the share of output they should pay the landlord 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 tends to improve the crop-share of tenants and...
Article
Economists now appreciate that resource allocation in less economically developed economies is profoundly influenced by nonfirm economic institutions. However, the authors' theories of nonfirm institutions often suggest different answers to many questions, including those of policy. This paper illustrates a method for discriminating between alterna...
Article
Credit default swaps (CDS) which constitute up to 98% of credit derivatives have had a unique, endemic and pernicious role to play in the current financial crisis. However, there are few in depth empirical studies of the financial network interconnections among banks and between banks and nonbanks involved as CDS protection buyers and protection se...
Article
This course is intended as an introduction to the newly emerging …eld of political econ- omy of institutions and development. Its purpose is to give you both a sense of the frontier research topics and a good command of the tools in the area. The reading list is intention- ally long, to give those of you interested in the …eld an opportunity to dig...
Article
Full-text available
Abstract This paper presents a theory of rent-seeking within farmer cooperatives in which inequality of asset ownership affects relative control rights of different groups of members. The two key assumptions are constraints on lumpsum,transfers from poorer members and disproportionate control rights wielded by wealthier members. Transfer of rents t...
Article
Iron deficiency anemia is prevalent in the developing world, and is thought to cause reduced productivity, increased susceptibility to illness, and cognitive difficulties in childhood. This paper reports on a randomized evaluation of an experimental community-level iron fortification program in Udaipur district, Rajasthan. The program was designed...
Article
We introduce intentional idiosyncratic play in a standard stochastic evolutionary model of equilibrium selection, where the equilibria represent distributional conven-tions between members of two classes. We define intentional mutations as rare play of mixed strategies that are supported only on the set of strategies that would give the population...
Article
We exploit random variation in the meeting frequency of microfinance groups dur-ing their first loan cycle to show that more frequent meeting is associated with long-run increases in social interaction and lower default. Relative to clients who met on a monthly basis during their first loan, those who met weekly are three and a half times less like...
Article
Ethnic politics and political corruption remain important concerns in many develop-ing country democracies. Experimental evaluation of a hortatory voter mobilization campaign in rural India shows that a voter's preference for the party that represents her ethnic group is malleable and that declines in ethnic voting lower the vote share of criminal...
Article
Full-text available
This study uses a unique survey to study the impact of electoral reforms on income growth in rural China during the past two decades. Electoral reforms shifted the accountability of village leaders from higher levels of government towards villagers. We provide a simple model to illustrate how such a shift in accountability can a¤ect leaders'incenti...
Article
This paper presents the results of a two-year randomized evaluation of a large scale remedial education program, conducted in Mumbai and Vadodara, India, and the preliminary results of a randomized evaluation of a computer assisted learning program in Vadodara. The remedial education program hires young women from the community to teach basic liter...