The Role of Social Capital in Risk-Taking Decisions under Joint Liability Lending

Richard A. Gallenstein, Jon Einar Flatnes and Abdoul G. Sam

Journal of Development Studies, 2020, vol. 56, issue 12, 2194-2211

Abstract: Joint liability group lending has come under scrutiny for failure to promote profitable risk-taking among smallholder borrowers in developing countries. One possible explanation for the absence of profitable risk-taking is the collateral-like effect of social capital, which borrowers fear losing if they default. In this paper, we use data from a framed field experiment and a survey administered in Tanzania to empirically investigate the relationship between social capital and risk-taking. We find that borrowers with more close relationships (family and friends) in their borrowing group increase risk-taking yet borrowers with more relationships that induce negative moral emotions (shame and guilt) reduce risk-taking.

Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://hdl.handle.net/10.1080/00220388.2020.1755654 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:jdevst:v:56:y:2020:i:12:p:2194-2211

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/FJDS20

DOI: 10.1080/00220388.2020.1755654

Access Statistics for this article

Journal of Development Studies is currently edited by Howard White, Oliver Morrissey and Ken Shadlen

More articles in Journal of Development Studies from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().