Do Rural Banks Matter That Much? Burgess and Pande (AER, 2005) Reconsidered

Nino Buliskeria and Jaromir Baxa

No 2020/16, Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies

Abstract: We replicate Burgess and Pande (2005), who analyze the effects of the state-led expansion of the banking sector on poverty in India from 1961 to 1990. They find that the bank branch expansion in the rural areas decreased poverty due to improved access to credit and saving facilities. However, Burgess and Pande (2005) do not consider other simultaneous policies affecting the financial sector and poverty, in particular, the Integrated Rural Development Program aiming at credit subsidizing for the poor. Therefore, using the methodology by Burgess and Pande (2005), we show that structural shifts in the rural bank branch expansion and rural poverty can be identified for almost any other year between 1970 and 1984. Our results imply that the experiment by Burgess and Pande (2005) does not prove a superior impact of the bank branch expansion on poverty reduction in India.

Keywords: Bank expansion; rural poverty; finance (search for similar items in EconPapers)
JEL-codes: G21 G28 O15 O16 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2020-05, Revised 2020-05
New Economics Papers: this item is included in nep-ban, nep-fdg and nep-mfd
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Persistent link: https://EconPapers.repec.org/RePEc:fau:wpaper:wp2020_16

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