New Working Papers
Jonathan Morduch and Ariane Szafarz: “Earning to Give: Occupational Choice for Effective Altruists.” Working paper, April 2018.
Jean Lee, Jonathan Morduch, Saravana Ravindran, Abu S. Shonchoy, Hassan Zaman. “Poverty and Migration in the Digital Age: Evidence on Mobile Banking in Bangladesh.” Working paper, February 28, 2018.
“Paying in Pieces: A natural experiment on consumer demand under different payment schemes” (with Jonathan Bauchet). Working paper, February 6, 2018.
Robert Cull, Jonathan Morduch, and Asli Demirgüç-Kunt. “The Microfinance Business Model: Enduring Subsidy and Modest Profit.” World Bank Economic Review, forthcoming 2018. Blog post.
Robert Cull and Jonathan Morduch. “Microfinance and Economic Development,” in (eds.), Thorsten Beck and Ross Levine. Handbook of Finance and Development. Cheltenham, UK: Edward Elgar, 2018.
Jonathan Morduch and Julie Siwicki. 2017. “In and Out of Poverty: Poverty spells and income volatility in the U.S. Financial Diaries.” Social Service Review 91 (3): September 2017: 390-421.
Jonathan Morduch. “Economics and the Social Meaning of Money,” chapter 1 in Nina Bandelj, Frederick F. Wherry and Viviana Zelizer, eds., Money Talks: Explaining How Money Really Works. Princeton, NJ: Princeton University Press. 2017.
Jonathan Morduch and Tim Ogden. “Interview with Jonathan Morduch” [on the interpretation and methodology of RCTs in development economics] in Timothy Ogden, ed., Experimental Conversations. MIT Press, 2017.
Anthony Hannagan and Jonathan Morduch. “Income Gains and Month-to-Month Income Volatility: Evidence from the US Financial Diaries.” In Economic Mobility: Research & Ideas on Strengthening Families, Communities & the Economy. Federal Reserve Bank of St. Louis and Board of Governors of the Federal Reserve System, 2016.
Jonathan Bauchet, Jonathan Morduch, and Shamika Ravi. “Failure vs Displacement: Why an innovative anti-poverty program showed no net impact in South India.” Journal of Development Economics 116, September 2015: 1-16.
John Gershman and Jonathan Morduch. “Credit is not a right.”In Microfinance, Rights, and Global Justice, Tom Sorell and Luis Cabrera, eds. Cambridge University Press, 2015.
Robert Cull, Jonathan Morduch, and Asli Demirgüç-Kunt. “Banks and Microbanks.” Journal of Financial Services Research 46 (1), August 2014: 1-53.
David Roodman and Jonathan Morduch. “The Impact of Microcredit on the Poor in Bangladesh: Revisiting the Evidence.” Journal of Development Studies 50 (4), April 2014: 583-604. [Appendix.] [Drafts, code, data, more.]
ABSTRACT: We replicate and reanalyze the most influential study of microcredit impacts (Pitt and Khandker, 1998). That study was celebrated for showing that microcredit reduces poverty, a much hoped-for possibility (though one not confirmed by recent randomized controlled trials). We show that the original results on poverty reduction disappear after dropping outliers, or when using a robust linear estimator. Using a new program for estimation of mixed process maximum likelihood models, we show how assumptions critical for the original analysis, such as error normality, are contradicted by the data. We conclude that questions about impact cannot be answered in these data.
Jonathan Bauchet, Aparna Dalal, and Jonathan Morduch. “What Can We Learn from Impact Assessments?” Chapter 4 in Practical Guide to Impact Assessments of Microinsurance. Edited by Ralf Rademacher and Katja Roth. Microinsurance Network. 2014.
Jonathan Bauchet and Jonathan Morduch. “Is Micro too Small? Microcredit vs. SME Finance.” 2013. World Development 43: 288-297.
Beatriz Armendáriz, Yu Luo, and Jonathan Morduch. “Microfinance in China.” In Economics of Microfinance, Chinese edition. China Social Sciences Press, Beijing; 2nd edition: Liangjing Publishing House, Beijing. 2013.
Jonathan Morduch. “10 Research Questions”, chapter 15 (conclusion) in Robert Cull, Asli Demirgüç-Kunt, and Jonathan Morduch, editors, Banking the World. MIT Press, 2013.
Alberto Chaia, Aparna Dalal, Tony Goland, Maria Jose Gonzalez, Jonathan Morduch, and Robert Schiff. “Half the World is Unbanked” Chapter 2 in Robert Cull, Asli Demirgüç-Kunt, and Jonathan Morduch, editors, Banking the World. MIT Press, 2013. Featured in McKinsey Quarterly, 2010.
Michal Bauer, Julie Chytilová, and Jonathan Morduch. “Behavioral Foundations of Microcredit: Experimental and Survey Evidence from Rural India.” American Economic Review 102 (2), April 2012: 1118-1139.
ABSTRACT: We use experimental measures of time discounting and risk aversion for villagers in south India to highlight behavioral features of microcredit, a financial tool designed to reduce poverty and fix credit market imperfections. The evidence suggests that microcredit contracts may do more than reduce moral hazard and adverse selection by imposing new forms of discipline on borrowers. We find that, conditional on borrowing from any source, women with present-biased preferences are more likely than others to borrow through microcredit institutions. Another particular contribution of microcredit may thus be to provide helpful structure for borrowers seeking self-discipline.
Rajeev Dehejia, Heather Montgomery, and Jonathan Morduch. “Do interest rates matter? Credit demand in the Dhaka Slums.” Journal of Development Economics 47 (2), March 2012: 437 – 499.
ABSTRACT: “Best practice” in microfinance holds that interest rates should be set at profit-making levels, based on the belief that even poor customers favor access to finance over low fees. Despite this core belief, little direct evidence exists on the price elasticity of credit demand in poor communities. We examine increases in the interest rate on microfinance loans in the slums of Dhaka, Bangladesh. Using unanticipated between-branch variation in prices, we estimate interest elasticities from − 0.73 to − 1.04, with our preferred estimate being at the upper end of this range. Interest income earned from most borrowers fell, but interest income earned from the largest increased, generating overall profitability at the branch level.
Aparna Dalal and Jonathan Morduch. “The Psychology of Microinsurance: Small Changes Can Make a Surprising Difference.” Chapter 13 in Craig Churchill and Michal Matul, eds., Protecting the Poor: A Microinsurance Compendium, Volume II. Geneva: International Labour Organization, 2012, pp. 274-285.
Jonathan Conning and Jonathan Morduch. “Microfinance and Social Investment.” Annual Review of Financial Economics, vol. 3, ed. Robert Merton and Andrew Lo. 2011: 407-434.
ABSTRACT: This review puts a corporate finance lens on microfinance. Microfinance aims to democratize global financial markets through new contracts, organizations, and technology. We explain the roles that government agencies and socially minded investors play in supporting the entry and expansion of private intermediaries in the sector, and we disentangle debates about competing social and commercial firm goals. We frame the analysis with theory that explains why microfinance institutions serving lower-income communities charge high interest rates, face high costs, monitor customers relatively intensively, and have limited ability to lever assets. The analysis blurs traditional dividing lines between nonprofits and for-profits and places focus on the relationship between target market, ownership rights, and access to external capital.
Robert Cull, Jonathan Morduch, and Asli Demirgüç-Kunt. “Does Regulatory Supervision Curtail Microfinance Profitability and Outreach?” World Development 39(6): 949-965, June 2011.
Jonathan Morduch. “Does Microfinance Really Help the Poor? New Evidence on Flagship Programs in Bangladesh,” Chapter 12 in S. R. Osmani and M. A. Baqui Kalily, Readings in Microfinance: Reach and Impact. Dhaka, Bangladesh: University Press Limited, 2011, pp. 323-349. (Publication of an unpublished June 1998 discussion paper).
Robert Cull, Jonathan Morduch, and Asli Demirgüç-Kunt. “Microfinance Tradeoffs: Regulation, Competition, and Financing.” In Beatriz Armendáriz and Marc Labie, eds., Handbook of Microfinance. World Scientific, 2010, pp. 141-157. [Japanese translation 2016]
Jonathan Morduch. “Borrowing to Save.” Journal of Globalization and Development 102 (2), December 2010.
Xavier Gine, Pamela Jakiela, Dean Karlan, and Jonathan Morduch. “Microfinance Games.” American Economic Journal: Applied Economics 2(3): 60-95, July 2010.
Jonathan Bauchet and Jonathan Morduch. “Selective Knowledge: Reporting Bias in Microfinance Data.” Perspectives on Global Development and Technology 9 (3-4): 240-269, 2010.
Robert Cull, Jonathan Morduch, and Asli Demirgüç-Kunt. “Microfinance Meets the Market.” Journal of Economic Perspectives 23(1), Winter 2009: 167-192.
Reprinted as ch. 1 of Contemporary Studies in Economic and Financial Analysis, Volume 92, Moving Beyond Storytelling: Emerging Research in Microfinance, Todd A. Watkins and Karen Hicks (eds.). 2009. Bingley, UK: Emerald.
Dean Karlan and Jonathan Morduch. “Access to Finance.” In Dani Rodrik and Mark Rosenzweig, eds., Handbook of Development Economics, Volume 5. Amsterdam: Elsevier, 2009, pp. 4704 – 4784.
Jonathan Morduch. “The Knowledge Bank,” chapter 13 in Reinventing Foreign Aid, edited by William Easterly. Cambridge, MA: MIT Press, 2008, pp. 377-397.
Don Johnston Jr. and Jonathan Morduch. “The Unbanked: Evidence from Indonesia.”October 2008. World Bank Economic Review 22 (3): 517-537.
Jonathan Morduch. “Micro-credit.” In New Palgrave Dictionary of Economics, Steven Durlauf and Lawrence Blume, eds. Second Edition. Palgrave Macmillan. 2008.
Daryl Collins and Jonathan Morduch. “Banking Low-Income Populations: Perspectives from South Africa.” In Rebecca Blank and Michael S. Barr, eds., Insufficient Funds: Savings, Assets, Credit and Banking Among Low-Income Households. New York: Russell Sage, 2008.
Condensed version published as “Reimagining the Unbanked: Perspectives from South Africa” (with Daryl Collins) in Communities and Banking, Federal Reserve Bank of Boston, Spring 2010, pp. 22-23.
Robert Cull, Jonathan Morduch, and Asli Demirgüç-Kunt. “Financial Performance and Outreach: A Global Analysis of Leading Microbanks.” Economic Journal, February 2007, Vol. 117, Issue 517: F107-F133.
Jonathan Morduch. “Smart Subsidy,” chapter 5 in Bernd Balkenhol, ed., Microfinance and Public Policy. Palgrave/Macmillan, 2007, pp. 72-85.
Reprinted in French as “Les subventions intelligentes” (Presses Universitaires de France, 2009).
Updated and translated into Spanish, in Microfinanzas y Políticas Públicas, (Plaza y Valdes and ILO).
Jonathan Morduch. “Micro-insurance: The Next Revolution?” in Understanding Poverty, edited by Abhijit Banerjee, Roland Benabou, and Dilip Mookherjee. Oxford University Press, 2006: 337-356.
Jonathan Morduch. “Concepts of Poverty.” Chapter 2 of United Nations Handbook of Poverty Statistics. New York: United Nations, 2008.
Jonathan Morduch. “Poverty Measures,” Chapter 3 of United Nations Handbook of Poverty Statistics. New York: United Nations, 2008.
Beatriz Armendàriz and Jonathan Morduch. “Microfinance: Where do we stand?” Invited presentation at the 2003 Meeting of the British Association for the Advancement of Science. Chapter in Charles Goodhart, editor, Financial Development and Economic Growth: Explaining the Links. Basingstoke, Hampshire, UK: Palgrave Macmillan, 2004.
Jonathan Morduch and Stuart Rutherford. “Microfinance: Analytical issues for India.” April 2003. In Priya Basu, ed., India‘s Financial Sector: Issues, Challenges and Policy Options. Oxford University Press.
Barbara Haley and Jonathan Morduch. “Microfinance and Poverty Reduction: What is the Bottom Line?” (In French) in Exclusion et Liens Financiers. 2003.
Jonathan Morduch. “Consumption Smoothing Across Space: Tests for Village-Level Responses to Risk.”In Stefan Dercon, ed., Insurance Against Poverty, Oxford University Press, 2003.
Gisele Kamanou and Jonathan Morduch. “Measuring vulnerability to poverty.” In Stefan Dercon, ed., Insurance Against Poverty, Oxford University Press, 2003.
Mark Schreiner and Jonathan Morduch. “Replicating Microfinance in the United States: Opportunities and Challenges.” Chapter 1 of Replicating Microfinance in the United States, edited by Jim Carr and Zhong Yi Tong. Baltimore: Woodrow Wilson Center/Johns Hopkins University Press, 2002.
Jonathan Morduch and Manohar Sharma. “Strengthening Safety Nets from the Bottom Up.”Development Policy Review, 2002. Prepared for World Bank Institute, December 2000. Also available in the World Bank Social Safety Nets Primer, and as a Human Development Network Social Protection Unit (HDNCP) working paper (www.worldbank.org/poverty/safety). In translation as “Redes de seguridad, seguro informal y Microfinanzas” and “Renforcement des filets sociaux de sécurité publics à partir de la base” (Paper No. 0227)
Jonathan Morduch and Terry Sicular. “Rethinking Inequality Decomposition, with Evidence from Rural China.” Economic Journal 112 (476), January 2002, 93-106.
Jonathan Morduch and Terry Sicular. “Risk and Insurance in Transition: Perspectives from Zouping County, China.” Chapter 8 in Community and Market in Economic Development, Oxford University Press, edited by Professors Masahiko Aoki and Yujiro Hayami. 2001.
Jonathan Morduch. “Reforming Poverty Alleviation Policies,” presented at conference on “Economic Policy Reform: What We Know and What We Need to Know” held at Stanford University, September 1998. Published in Economic Policy Reform: The Second Stage, edited by Professor Anne Krueger, University of Chicago Press, 2000.
Beatriz Armendàriz and Jonathan Morduch. “Microfinance Beyond Group Lending.” The Economics of Transition 8 (2) 2000: 401 – 420.
Jonathan Morduch. “Sibling Rivalry in Africa,” American Economic Review (AEA Papers and Proceedings) 90 (2), May 2000, 405 – 409.
Jonathan Morduch and Terry Sicular. “Politics, Growth, and Inequality in Rural China: Does it Pay to Join the Party?” (with Terry Sicular). Journal of Public Economics 77 (3), September 2000, 331 – 356.
Jonathan Morduch. “The Microfinance Promise,” Journal of Economic Literature 37 (4), December 1999, 1569 – 1614.
Reprinted in Gerald Meier and James Rauch, Leading Issues in Development Economics, 8th edition, 2006. New York: Oxford University Press.
Jonathan Morduch. “The Role of Subsidies in Microfinance: Evidence from The Grameen Bank,” Journal of Development Economics 60, October 1999, 229 – 248.
Jonathan Morduch. “Between the Market and State: Can Informal Insurance Patch the Safety Net?” World Bank Research Observer 14 (2), August 1999, 187 – 207.
Sudhir Anand and Jonathan Morduch. “Poverty and the `Population Problem’.” Revision of Address at International Union for the Scientific Study of Population Congress, Florence, Italy, March 1995. In Population and Poverty in Developing Countries, Massimo Livi-Bacci and Gustavo de Santis, eds., Oxford University (Clarendon) Press, 1999.
Jonathan Morduch. “The Microfinance Schism,” October 1998. World Development 28 (4), April 2000, 617 – 629.
Reprinted as ch. 3 of Microfinance: A Reader. David Hulme and Thankom Arun, eds. Abingdon, Oxon and New York, NY: Routledge. 2009.
ABSTRACT: Leading advocates for microfinance have put forward an enticing “win-win” proposition: microfinance institutions that follow the principles of good banking will also be those that alleviate the most poverty. This vision forms the core of widely-circulated “best practices,” but as a general proposition the vision is fully supported neither by logic nor by the available empirical evidence. Recognizing the limits to the win-win proposition is an important step toward reaching a more constructive dialogue between microfinance advocates that privilege financial development and those that privilege social impacts.
Ashish Garg and Jonathan Morduch. “Sibling Rivalry and the Gender Gap: Evidence from Child Health Outcomes in Ghana.” Journal of Population Economics 11 (4), December 1998, 471 – 493.
Jonathan Morduch. “Poverty, Economic Growth, and Average Exit Time,” Economics Letters 59, 1998, 385-390.
Featured in Economic Intuition (July 1998) as one of the “best 100 articles annually” in management, finance, and economics.
David Bravo, Ricardo Godoy, and Jonathan Morduch. “Technological Adoption in Rural Cochabamba, Bolivia” (with ), Journal of Anthropological Research 54, Fall 1998, 351 – 371.
Hal Stern and Jonathan Morduch. “Using Mixture Models to Detect Sex Bias in Health Outcomes in Bangladesh.” Journal of Econometrics 77 (1), March 1997, 259 – 276.
ABSTRACT: Many interesting economic hypotheses entail differences in behaviors of groups within a population, but analyses of pooled samples shed only partial light on underlying segmentations. Finite mixture models are considered as an alternative to methods based on pooling. Robustness checks using t-regressions and a Bayesian analogue to the likelihood ratio test for model evaluation are developed. The methodology is used to investigate pro-son bias in child health outcomes in Bangladesh. While regression analysis on the entire sample appears to wash out evidence of bias, the mixture models reveal systematic girl-boy differences in health outcomes.
Jonathan Morduch. “Income Smoothing and Consumption Smoothing,” Journal of Economic Perspectives 9(3), Summer 1995, 103 – 114.
Reprinted in Development Economics: Critical Concepts in Development Studies (Routledge Major Works series). Lead article, Volume II.
Reprinted in Chris Barrett, ed., Agricultural Development: Critical Concepts in Development Studies. Routledge 2011.
Peter Klibanoff and Jonathan Morduch. “Decentralization, Externalities, and Efficiency.” Review of Economic Studies 62, April 1995, 223 – 247.
ABSTRACT: In the competitive model, externalities lead to inefficiencies, and inefficiencies increase with the size of externalities. However, as argued by Coase, these problems may be mitigated in a decentralized system through voluntary coordination. We show how coordination is limited by the combination of two factors: respect for individual autonomy and the existence of private information. Together they imply that efficient outcomes can only be achieved through coordination when external effects are relatively large. Moreover, there are instances in which coordination cannot yield any improvement at all, despite common knowledge that social gains from agreement exist. This occurs when external effects are relatively small, and this may help to explain why coordination is so seldom observed in practice. When improvements are possible, we describe how simple subsidies can be used to implement second-best solutions and explain why standard solutions, such as Pigovian taxes, cannot be used. Possible extensions to issues arising in the structure of research joint ventures, assumptions in the endogenous growth literature, and the location of environmental hazards are also described.
Jonathan Morduch. “Poverty and Vulnerability.” American Economic Review (AEA Papers and Proceedings) 84 (2), May 1994, 221 – 225.
Karen Brooks, Jonathan Morduch, and Yakov Urinson. “Distributional Consequences of the Russian Price Reform.” Economic Development and Cultural Change 42:3, April 1994, 469 – 484.
Jonathan Morduch and Alan M. Taylor. “A Model of Price Liberalization in Russia” in The Economics of Transformation: Theory and Practice in the New Market Economies, eds. A. Schipke and A. Taylor (Berlin, New York: Springer, 1993).
Avishay Braverman, Jeffrey S. Hammer, and Jonathan Morduch. “Wheat and Maize Price Policies in Hungary: Tradeoffs between Foreign Exchange and Government Revenue.” Agricultural Economics 1, 1987.