In village economies, insurance networks are key to smoothing shocks, while production networks can propagate them. The interplay of these networks is crucial. We show that a significant health expenditure shock to one household propagates to other linked households via supply-chain and labor...

In village economies, insurance networks are key to smoothing shocks, while production networks can propagate them. The interplay of these networks is crucial. We show that a significant health expenditure shock to one household propagates to other linked households via supply-chain and labor...

In village economies, small firm owners facing idiosyncratic shocks adjust production by cutting spending and reducing employment. House-holds with whom they trade inputs and labor scale back their own businesses and reduce consumption. As effects reverberate through local economies, the...

We look at liquidity constraints and the financing of household investment in fixed assets. We find that rural households in our sample, especially the poor, seem to face liquidity constraints. The constraints are partially mitigated by kinship networks in the village. When we further analyze...

Delegating the allocation of public resources to community members is an increasingly popular form of delivering development programs and are associated with a tradeoff between improved information about potential beneficiaries and favoritism towards local elites. Unlike targeting cash transfers...

Limited borrower information may create targeting distortions in credit markets. Community-based lending programs may reduce these distortions by exploiting information transmitted in local networks, but connections may create asymmetries in power. This paper analyzes how local leaders balance...