Few micro…nance-funded businesses grow beyond subsistence entrepreneur-ship. This paper considers one possible explanation: that the structure ofexisting micro…nance contracts may discourage risky but high-expected returninvestments. To explore this possibility, I develop a theory that uni…es...

Recent events in several countries have underscored the importanceof good governance in private occupational pension plans. Thepresent paper uses contract theory to analyze the interplay of residualclaims and control rights in private pensions. The residual claimant isthe plan sponsor in a...

This chapter develops a unified analytical framework, drawing on and extending the existing literatureon the subject, for studying the role of property rights in economic development. Itaddresses two fundamental and related questions concerning the relationship between propertyrights and...

An interesting puzzle is that trade liberalization in the 1980s and 1990s has been associated with a sharp increase in the skill premium in both developed and developing countries.This is in contrast with neoclassical theory, according to which trade should increase therelative return of the...

This paper analyzes the theoretical underpinnings of high-frequency repayment, a featurein nearly all microfi…nance contracts that has been largely overlooked by theorists. The pervasive belief among practitioners that frequent repayment is critical in achieving high repaymentrates is puzzling....

We study market inefficiencies and policy remedies when agents choose their occupations, and entrepreneurialtalent is subject to private information. Untalented entrepreneurs depress the returns to entrepreneurshipbecause of adverse selection. The severity of this problem depends on the outside...

We consider a linear growth model with idiosyncratic productivity shocks in whichproducers cannot commit to repay their loans. Borrowing constraints are determinedendogenously by the borrowers’ incentives to repay, assuming that defaulters lose a shareof output and are excluded from future...

This paper exploits data on the pattern of violence across regionsand over time to estimate the impact of the peace process in NorthernIreland on house prices. We begin with a linear model that estimatesthe average treatment effect of a conflict-related killing on house prices-showing a negative...

Almost one third of the population in developing countries is under age 15. Hence improvingthe effectiveness of policy interventions that target adolescents might be especiallyimportant. We analyze the intention to participate in training programs of adolescent girlsin Uganda, a country with...

This paper describes a new and intuitive methodfor answering these technical questions by tabulating theexact loss distribution arising from correlated credit eventsfor any arbitrary portfolio of counterparty exposures, downto the individual contract level, with the losses measuredon a...