We study how social networks change due to an exogenous intervention, such as an expansion in financial access, and we show how to estimate the effect of these network changes on individual outcomes (intervention spillovers). We use a unique panel dataset that contains detailed information on the network of informal financial transactions before and after a field experiment that randomized acce...

By Choice and by Necessity: Entrepreneurship and Self-Employment in the Developing World Over half of all workers in the developing world are self-employed. Although some selfemployment is chosen by entrepreneurs with well-defined projects and ambitions, roughly two thirds results from individuals having no better alternatives. The importance of selfemployment in the overall distribution of job...

When the quality of a good is at the discretion of the seller, how can buyers assure that the seller provides the mutually efficient level of quality? Contracts that provide a bonus to the seller if the quality is acceptable, or impose a penalty on the seller if quality is unacceptable, can in theory provide efficient incentives. But how are such contracts enforced? While the courts can be used...

This paper investigates the role of risk-aversion in the allocation of workers between formal and informal jobs in Ghana. In the model I propose risk-averse workers can opt between the free-entry informal sector and queuing for formal occupations. Conditional on identifying the riskier option, the model yields testable implications on the relationship between risk-preferences and workers’ alloc...

Estimations of the shadow economies for 145 countries, including developing, transition and highly developed OECD economies over 1999 to 2005 are presented. The average size of the shadow economy (as a percent of "official" GDP) in 2004/05 in 96 developing countries is 36.7%, in 25 transition countries 38.8% and in 21 OECD countries 14.8%. An increased burden of taxation and social security con...

This paper studies nonmarket institutions that facilitate exports. In Malawi, as in many other developing countries, farmers face numerous constraints that disconnect them from export markets. We explore the role of a local institution, the burley tobacco clubs, in bridging smallholders to exports. Burley clubs potentially enable farmers to increase their tobacco farming productivity by providi...

This paper studies kinship band networks as capital market institutions. It explores two of the channels through which membership in a community where individuals are genealogically linked, such as a kinship group, can a¤ect their access to informal credit. The ...rst is that incentives to default are lower for community members who can expect retaliation to fall on their o¤spring as well as on...

We review existing estimates of the size of the Spanish underground economy, apply the Ahumada et al. (2007, RIW) correction procedure to some of them and calculate the size of the underground economy in Spain for the period 1960 through 2009 by using the modified-cash-deposits-ratio (MCDR) approach recently developed by Pickhardt and Sardà (2011, EJLE). We then extend the MCDR approach with re...

In many developing countries, public programs in the form of food aid distribution and food-for-work programs are often meant to protect vulnerable households from consumption and nutrition downturns by providing a safety net. Few studies have evaluated the impact of these programs. Furthermore, households often use a variety of informal mechanisms to cope with risk, including mutual support an...