NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

NBER Working Papers by Benjamin Feigenberg

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Working Papers

May 2010Building Social Capital Through MicroFinance
with Erica M. Field, Rohini Pande: w16018
A number of development assistance programs promote community interaction as a means of building social capital. Yet, despite strong theoretical underpinnings, the role of repeat interactions in sustaining cooperation has proven difficult to identify empirically. We provide the first experimental evidence on the economic returns to social interaction in the context of microfinance. Random variation in the frequency of mandatory meetings across first-time borrower groups generates exogenous and persistent changes in clients' social ties. We show that the resulting increases in social interaction among clients more than a year later are associated with improvements in informal risk-sharing and reductions in default. A second field experiment among a subset of clients provides direct evidence...

Published: “The Economic Returns to Social Interaction: Experimental Evidence from Microfinance” (with Rohini Pande and Benjamin Feigenberg). Review of Economic Studies , October 2013, 80(4): 1459 - 1483 .

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