Aid Effectiveness, Informal Finance & Redistributive Pressures

  • Vincent Somville

Student thesis: Doc typesDoctor of Economics and Business Management

Abstract

Chapter 1 Elite Capture Through Information Distortion: Common wisdom as well as sound analytical arguments suggest that stronger punishment of deviant behavior meted out by a principal typically prompts the agents to better conform with his objectives.We address the specific issue of donor-beneficiary relationships in the context of participatory development programs, and we show that greater tolerance on the part of donors may, under certain conditions, favor rather than hurt the interests of the poor. Also, greater uncertainty surrounding the donor’s knowledge regarding the poor’s preference may have the same paradoxical effect. Critical features of our framework are: (i) communities are heterogeneous and dominated by the local elite in dealing with external agencies, (ii) the elite choose the project proposed to the donor strategically, knowing that the latter has a certain amount of tolerance toward elite capture and an imperfect knowledge of the poor’s priorities. Chapter 2 consists in a previous analysis of the same issue that I carried out on my own before teaming up with Jean-Philippe and Zaki. I use more specific functions and the results are less general. Nevertheless, the central idea is there and this chapter may be useful to grasp the mechanism behind the main result. Chapter 3 Informal Savings and Intra-Household Strategies: Theory & Evidence from Urban Benin: Daily collectors operate worldwide; they charge a fee in exchange for the collection of their client’s deposits. The clients recover their savings after one month. With a negative nominal return of -3.3% per month, the service is quite expensive but nonetheless prevalent among the very poor. The economic literature so far emphasizes one motive for making deposits: people want to commit to save. I argue that in addition, people make deposits in order to reduce their contribution to the household’s expenditures and increase their private consumption. This intra-household motive is first modelled and then tested using a unique panel data-set collected in Benin. Additionally, I show that daily collectors enable women to make more gifts to their children and acquaintances, and allow men to reduce those gifts and their participation to household’s public goods. There is large positive effect of the deposits on people’s purchase of new clothes, and making deposits increases women’s expenditures on frivolous goods substantially. Finally, the commitment motive appears to be an important determinant of men’s deposits. Chapter 4 Double, Double Toil and Trouble: An Investigation into Expenditures in Occult Forces in Benin: Drawing on data we collected in Benin we provide evidence that highlights the importance of magico-religious expenditures within Beninese households. In the context of this study we focus on magico-religious powers used as a versatile means to cure and protect one-self or relatives against misfortunes. Far from being anecdotal, our data show that out of the 178 households in our sample 48% of their heads have made some magico-religious expenditures in the year preceding the survey. For these household heads these expenditures represented on average 5.6% of all expenditures. Our data allow us to test several conjectures that can be found in the relevant literature as to what variables drive magico-religious expenditures. We find that the main determinants are economic success and tensions within the family.
Date of Award28 Sep 2011
Original languageFrench
Awarding Institution
  • University of Namur
SupervisorJean-Philippe PLATTEAU (Supervisor), Gani Aldashev (President), CATHERINE GUIRKINGER (Jury), Vijayendra RAO (Jury) & Marcel FAFCHAMPS (Jury)

Cite this

Aid Effectiveness, Informal Finance & Redistributive Pressures
Somville, V. (Author). 28 Sep 2011

Student thesis: Doc typesDoctor of Economics and Business Management