Microfinance and Prosocial Behaviors: Experimental Evidence of Public-Good Contributions in Uganda

Bryan McCannon and Zachary Rodriguez

Journal of Institutional and Theoretical Economics (JITE), 2019, vol. 175, issue 2, 228-257

Abstract: Microfinance is an important component of the fight against poverty. We ask whether access to microfinance loans by the poor relates to their prosocial behaviors. A lab-in-the-field study in southern, rural Uganda is done. A public-good game is used to measure subjects' willingness to free-ride. We document higher levels of contributions by those who have previously received a microloan. We explore potential explanations such as differing social-norm assessments, measurable income effects, or sample selection bias. Receiving a microloan continuesto have an independent effect on prosociality. The results suggest that exposureto microfinance correlates with social preferences.

Keywords: lab in the field; microfinance; public goods; social preference; Uganda (search for similar items in EconPapers)
JEL-codes: C93 G21 O16 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1628/jite-2018-0010

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