This preview shows page 1. Sign up to view the full content.
Unformatted text preview: Burgess & Pande (2003) Credit and Microﬁnance of the 1:4 license policy yit = αi + βt + φ Bit + η1 [t − 1961] × Bi1961
+ η2 P1977 × Bi1961 + η3 P1990 × Bi1961 + uit
where deviations from the linear state-speciﬁc trend, [t − 1961] × Bi1961 ,
which we characterize as [t − 1977] × Bi1961 and [t − 1990] × Bi1961 , are our
instruments for BR .
Evidence suggests that state led rural branch expansion has been central
to tackling economic backwardness in India
Rural branch expansion has been a key driver of structural change and
Results counter widespread pessimism concerning potential of these types
Central bank’s licensing policy enabled the development of an extensive
rural branch network, and that this, in turn, allowed rural households to
better accumulate capital and to obtain loans for longer term productive
investments Lets do a Basic thought experiment – what happens when a bank opens in
a village or small town?
Answer seems to be that it helps households to start small businesses –
informal manufacturing and services
Engine for economic growth and poverty reduction
At this point, mechanisms through which effects achieved unclear
The paper is silent of whether intervention cost-effective relative to alternatives Development Economics, LSE Summer School 2007 131 ...
View Full Document
This note was uploaded on 12/29/2011 for the course ECO 307 taught by Professor Dublin during the Spring '10 term at SUNY Stony Brook.
- Spring '10