The ex ante theory of collateral states that better informed lenders, such as informal lenders, rely less on collateral. We test this by contrasting the use of collateral between formal and informal lenders in the same market. Indeed, formal lenders rely more often on collateral, controlling for...

In many developing countries, we observe rather high levels of corruption. This is surprising from a political economy perspective, as the majority of people generally suffers from high corruption levels. We explain why citizens do not exert enough political pressure to reduce corruption if...

The distribution of economic activity over physical space - economic geography - is central to economic development. Geographical variations in industrialisation are the primary factor affecting geographical variations in incomes. And so, the question of what drives industry to locate in one...

Cluster policy is recognized as one of the pivotal elements of state-of-art innovation policy. State support for clusters helps to take into account regional peculiarities and engage the most innovative local actors into the process of innovation policy drafting and implementation. Cluster...

This volume was prepared by Benedikt Heid while he was working at the ifo Institute and the University of Bayreuth. It was completed in December 2013 and accepted as a doctoral thesis by the Department of Economics at the Ludwig-Maximilians-Universität München. It includes six self-contained...

Lending to the poor is expensive due to high screening, monitoring, and enforcement costs. Group lending advocates believe lenders overcome this by harnessing social connections. Using data from FINCA-Peru, I exploit a quasi-random group formation process to find evidence of peers successfully...

This review examines portions of the vast literature on rural financial markets and household behavior in the face of risk and uncertainty. We place particular emphasis on studying the important role of financial intermediaries, competition and regulation in shaping the changing structure and...

The labor surplus economy model has as its basic premise the inability of unskilled agricultural labor markets to clear in countries with high man/land ratios. In such situations, the marginal product of labor is likely to fall below a bargaining wage, related to the average rather than the...

This study presents a comparative analysis of farmers' organisations in Korea and Taiwan during 1950-80 in order to help us understand the role of group behavior in affecting development outcomes. It highlights the linkages between group behavior, parastatal organisational structures and...

This paper examines whether sharecroppers and fixed-rent tenants in the rice farms of South Asia are distinguished by their farming skills. The idea that fixed-rent contracts are typically given to relatively skilled tenants dates back to the agricultural (tenancy) ladder hypothesis of Spillman...