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Title: Three essays in development economics
Author: Dalwai, S.
ISNI:       0000 0004 8502 6209
Awarding Body: University of Exeter
Current Institution: University of Exeter
Date of Award: 2019
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To find a route on the map to reach the destination, one starts by looking for the current location. Development economics studies underdevelopment. The primary matter of interest are the individuals, groups and societies that have lagged behind and the reasons for the same. It is imperative to look for solutions that would help bridge the gap. The 20th century's debate of market orientation or intervention is stark in 21st century development strategies for the underdeveloped. But there is also growing consensus on making the choices based on strong empirical evidence. The supporters of market oriented strategies put great emphasis on the efficacy of the efficient capital markets to solve the problem of poverty. Microfinance is seen as the magic bullet that can eradicate poverty through the market by being innovative enough to reach out to the poor. It does that while achieving women empowerment. How exactly it achieves the transformation of lives of the underserved is inevitably a question of interest for a development economist. Chapter One of this thesis seeks to explore the development of microfinance in India by looking at the experience of the Mann Deshi Bank, which established in 1997 as the first microfinance women bank in India. The qualitative and quantitative methods are employed to analyse the contribution of the bank. The narratives of the borrowers of the bank highlighting the role of credit are analyzed. Subsequently, the descriptive statistics of the joint liability loans is reported and their growth and financial performance are discussed. This chapter further argues that the innovative financial products introduced by Mann Deshi to address the cash flow needs of clients can serve as a potential template for greater financial inclusion around the world. The conclusion is on how the work of Mann Deshi Bank can serve as a new benchmark in the microfinance industry in India. It follows also to explore the strategy employed by the microfinance institutions to enhance their performance. Most microfinance banks, which have become a key provider of credit in developing countries use agents to acquire new borrowers, manage the account and collect repayments. Chapter Two of this thesis studies the incentives provided to such financial agents and the effect such incentives had on the outcome desired by the microfinance bank. Mann Deshi Bank, a microfinance bank operating in western India, changed its remuneration scheme from pure commission to a mix scheme with a combination of a base salary and other incentives. This chapter examines the effect it had on the effort and the output of the agents by using a panel data of 39 agents working on the bank's joint liability lending product for five years. The results show that although the bank was able to reduce its wage bills for the loan product, it came with the poorer performance by the agents. The supply of credit to new borrowers reduced, both in terms of the rate of reaching out to new borrowers as well as the loan amount disbursed to them. However, interestingly, borrowers delay their repayments less with the new agents on the mixed contract. On the other hand not just for the supporters of the interventionism but also for all for the sake of curbing the market failure arising due to public goods, the efficiency of the government to deliver remains of great interest. Enabling the citizens to monitor their government through a right to information is hoped to improve the public goods distribution. To what extent it indeed happens, if it does and does it particularly show any potential in achieving the developmental goals quicker is currently a burning question. Chapter three of this thesis considers the efficacy of Right to Information Act (RTI) in India for achieving developmental goals for poor Indian citizens. Nations worldwide have enacted freedom to information to provide greater transparency to government operations and to allow citizens to monitor their governments more effectively. Does this lead to better public services? The efficacy of the RTI since its inception in 1997 is analyzed. Also, the kind of public goods which can be improved is identified. Lastly, whether these public goods are beneficial for the poor population is examined. Two indicators are applied; electrification and health. Electrification is used to understand how much attention a state pays to its rural voter- since electrification is nearly complete in urban India but many rural areas either do not have electricity connections or do not receive any electricity the whole week. For health, an analysis of effect of RTI is employed on infant mortality. Infant mortality is a key health outcome and a good indicator of the quality of health care provision in a society. So a more accountable government due to RTI will provide better health care and therefore the state or country is likely to have lower infant mortality. The key explanatory variable in the study is RTI implementation.
Supervisor: Chakravarty, S. ; Kumar, P. Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available
Keywords: microfinance ; Mann Deshi ; microfinance in India ; RTI ; Incentive contract ; agent performance ; salary contract ; commission contract ; transparency ; right to information ; household electrification ; infant mortality ; logit ; random effect model ; difference in difference ; microfinance institutions ; joint liability ; weekly market ; micro credit