In recent years, microfinance institutions have expanded into group lending with individual liability, leaving out the joint liability clause which was an important feature in earlier lending contracts. Recent experimental evidence indicates that group lending may yield benefits, specifically...

We investigate donor-beneficiary relationships in participatory development programs, where (i) communities are heterogeneous and dominated by the local elite, (ii) the elite strategically propose a project to the donor, knowing that the latter has imperfect knowledge of the needs of the target...