Jonathan J. Morduch

Jonathan J. Morduch
Professor of Public Policy and Economics, Executive Director of the Financial Access Initiative

NYU | Wagner Faculty 295 Lafayette Street New York NY 10012 USA

Jonathan Morduch is Professor of Public Policy and Economics at the NYU Wagner Graduate School of Public Service, and Executive Director of the Financial Access Initiative (, a consortium of researchers focused on financial inclusion. His research centers on microfinance, social investment, and the economics of poverty.

He is co-author of Portfolios of the Poor: How the World’s Poor Live on $2 a Day (Princeton 2009) and The Economics of Microfinance (MIT Press, 2nd edition 2010).  His current works follows the financial lives of 235 working Americans over the course of a year ( Morduch is also co-author of Economics, a new principles text with Dean Karlan. Morduch has worked with the United Nations and World Bank, and advises global NGOs. Morduch holds a BA from Brown and Ph.D. from Harvard, both in economics.  He was awarded an honorary doctorate from the Université Libre de Bruxelles in December 2008 in recognition of his work on microfinance.

In 2016-17, Morduch is on sabbatical as a member of the School of Social Science at the Institute for Advanced Study in Princeton, New Jersey.

New Grants:
Ford Foundation, US Financial Diaries project.
Citi Foundation, US Financial Diaries project.
IMTFI and IGC, Mobile banking in Bangladesh




Semester Course
Spring 2016 PADM-GP.2203.001 International Economic Development: Governments, Markets, and Communities

While some countries have achieved unprecedented rates of economic growth in the past half century, other countries have experienced set-backs. For those that have seen rapid growth, economic changes have not always translated into proportional social changes – and sometimes rapid social changes have occurred in the absence of economic growth.

This course takes up issues of economic growth and social change in a comparative perspective. The course begins by reviewing the relationships between poverty, inequality, and economic growth. In that context, attention then turns to the role of markets, with a focus on local financial markets. In the second part of the semester, attention turns to policy interventions to improve education, confront rapid population growth, reduce the burden of disease, and confront corruption.

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Spring 2015 PADM-GP.2203.001 International Economic Development: Governments, Markets, and Communities

While some countries have achieved unprecedented rates of economic growth in the past half century, other countries have experienced set-backs. For those that have seen rapid growth, economic changes have not always translated into proportional social changes – and sometimes rapid social changes have occurred in the absence of economic growth.

This course takes up issues of economic growth and social change in a comparative perspective. The course begins by reviewing the relationships between poverty, inequality, and economic growth. In that context, attention then turns to the role of markets, with a focus on local financial markets. In the second part of the semester, attention turns to policy interventions to improve education, confront rapid population growth, reduce the burden of disease, and confront corruption.

Download Syllabus
Spring 2014 PADM-GP.2203.001 International Economic Development: Governments, Markets, and Communities

While some countries have achieved unprecedented rates of economic growth in the past half century, other countries have experienced set-backs. For those that have seen rapid growth, economic changes have not always translated into proportional social changes – and sometimes rapid social changes have occurred in the absence of economic growth.

This course takes up issues of economic growth and social change in a comparative perspective. The course begins by reviewing the relationships between poverty, inequality, and economic growth. In that context, attention then turns to the role of markets, with a focus on local financial markets. In the second part of the semester, attention turns to policy interventions to improve education, confront rapid population growth, reduce the burden of disease, and confront corruption.

Download Syllabus
Spring 2013 PADM-GP.2203.001 International Economic Development: Governments, Markets, and Communities

While some countries have achieved unprecedented rates of economic growth in the past half century, other countries have experienced set-backs. For those that have seen rapid growth, economic changes have not always translated into proportional social changes – and sometimes rapid social changes have occurred in the absence of economic growth.

This course takes up issues of economic growth and social change in a comparative perspective. The course begins by reviewing the relationships between poverty, inequality, and economic growth. In that context, attention then turns to the role of markets, with a focus on local financial markets. In the second part of the semester, attention turns to policy interventions to improve education, confront rapid population growth, reduce the burden of disease, and confront corruption.

Download Syllabus
US Financial Diaries Ongoing Communications and Book Promotion
AIG Research Fund
The purpose of the AIG Research Fund is to strengthen research at NYU Wagner on extending banking and insurance markets to poor and under-served markets and to support leading researchers in translating evidence into action through support of the Financial Access Initiative. The current study investigates how health insurance can affect the quality care available to poor households. This will include a quantitative review of the experience of insured and non-insured individuals while seeking treatment for a specific aliment.
Date Publication/Paper

Robert Cull, Asli Demirgurc-Kunt, and Jonathan Morduch 2016. The Microfinance Business Model: Enduring Subsidy and Modest Profit
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Recent evidence suggests only modest social and economic impacts of microfinance. Favorable cost-benefit ratios then depend on low costs. We use proprietary data on 1335 microfinance institutions between 2005 and 2009, jointly serving 80.1 million borrowers, to calculate the costs of microfinance and other elements of the microfinance business model. We calculate that on average, subsidies amounted to $132 per borrower, but the distribution is highly skewed. The median microfinance institution used subsidies at a rate of just $26 per borrower, and no subsidy was used by the institution at the 25th percentile. These data suggest that, for some institutions, even modest benefits could yield impressive cost-benefit ratios. At the same time, the data show that subsidy is large for some institutions. Counter to expectations, the most heavily-subsidized group of borrowers are customers of the most commercialized institutions, with an average of $275 per borrower and median of $93. Customers of NGOs, which focus on the poorest customers and on women, receive far less subsidy: the median microfinance NGO used subsidy at a rate of $23 per borrower, and subsidy for the NGO at the 25th percentile was just $3 per borrower.

Jonathan Morduch, Rachel Schneider, Timothy Ogden, Anthony Hannagan, & Julie Siwicki 2016. Savings Horizons June 2015. U.S. Financial Diaries Issue Brief 5.
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Jonathan Morduch, Rachel Schneider, Timothy Ogden, Anthony Hannagan, & Julie Siwicki 2016. Emergency Savings June 2015. U.S. Financial Diaries Issue Brief 4.
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Jonathan Morduch, Daryl Collins, Stuart Rutherford, & Orlanda Ruthven 2016. Portfolios of the Poor: How the World's Poor Live on $2 a Day Arabic translation.

Portfolios of the Poor: How the World's Poor Live on $2 a Day (Princeton University Press, 2009) tackles the fundamental question of how the poor make ends meet. Over 250 families in Bangladesh, India, and South Africa participated in this unprecedented study of the financial practices of the world's poor.

These households were interviewed every two weeks over the course of a year, reporting on their most minute financial transactions. This book shows that many poor people have surprisingly sophisticated financial lives, saving and borrowing with an eye to the future and creating complex "financial portfolios" of formal and informal tools.

Indispensable for those in development studies, economics, and microfinance, Portfolios of the Poor will appeal to anyone interested in knowing more about poverty and what can be done about it.

Jonathan Morduch 2016. Interview with Jonathan Morduch: On the Interpretation and Methodology of RCTs in Development Economics 2016. In Timothy Ogden, ed., Experimental Conversations. MIT Press.

Jonathan Morduch, Jonathan Bauchet, & Shamika Ravi 2016. Failure vs. Displacement: Why an Innovative Anti-Poverty Program Showed no Net Impact in South India September 2015. Journal of Development Economics 116: 1-16.
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We analyze a randomized trial of an innovative anti-poverty program in South India, part of a series of pilot programs that provide “ultra-poor” households with inputs to create new, sustainable livelihoods (often tending livestock). In contrast with results from other pilots, we find no lasting net impact on income or asset accumulation in South India. We explore concerns with program implementation, data errors, and the existence of compelling employment alternatives. The baseline consumption data contain systematic errors, and income and consumption contain large outliers. Steps to address the problems leave the central findings largely intact: Wages for unskilled labor rose sharply in the area while the study was implemented, blunting the net impact of the intervention and highlighting one way that treatment effects depend on factors external to the intervention itself, such as broader employment opportunities.

Jonathan Morduch 2016. Economics and the Social Meaning of Money 2017. Chapter 1 in Nina Bandelj, Frederick F. Wherry, & Viviana Zelizer, eds. Money Talks. Princeton University Press.
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Economic analyses of household choices usually assume that money is fungible—that a dollar is a dollar, no matter how it was earned or by whom. But, in practice, families often earmark money earned by a particular family member or generated from a particular job. Viviana Zelizer’s The Social Meaning of Money thoroughly documents the importance of earmarking and the social relations that explain why and how. More recently, the US Financial Diaries project documents the frequency of earmarking in a sample of low- and moderate-income households in ten sites across America.   Earmarking income for particular purposes generally leads to spending patterns that deviate from patterns delivered by household-level optimization with full fungibility. Not surprisingly, economists have been slow to embrace notions of earmarking.  That, though, may be changing, as behavioral economics and game theory provide examples of how “anomalous” empirical results can open doors to the acceptance of richer theoretical approaches.


Jonathan Morduch & Anthony Hannagan 2015. Income Gains and Month-to-Month Income Volatility: Evidence from the US Financial Diaries 2016. In Economic Mobility: Selected Papers from the 2015 Federal Reserve Community Development Research Conference. Online publication. Federal Reserve Bank of St. Louis.
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The US Financial Diaries track the daily finances of low and moderate-income households over a year. The households faced substantial swings in income from month to month. On average, they experienced 2.7 months when income fell more than 25 percent below average, and 2.7 months when income was more than 25 percent above average. The volatility is summarized by an average coefficient of variation of monthly income (within year, averaged across households) of 39 percent. The CV is greatest (55 percent) for households below the poverty line, but the CV remained relatively high (33-35 percent) and steady for households with income from 100 percent of the poverty line up to 300 percent. Thus, in the non-poor sample, greater income did not imply notably greater income stability.

Gershman, John and Jonathan Morduch 2015. Credit is Not a Right in Microfinance, Rights, and Global Justice (edited by Tom Sorell and Luis Cabrera). Cambridge University Press.
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Muhammad Yunus, the microcredit pioneer, has proposed that access to credit should be a human right. We approach the question by drawing on fieldwork and empirical scholarship in political science and economics. Evidence shows that access to credit may be powerful for some people some of the time, but it is not powerful for everyone all of the time, and in some cases it can do damage. Yunus’s claim for the power of credit access has yet to be widely verified, and most rigorous studies find microcredit impacts that fall far short of the kinds of empirical assertions on which his proposal rests. We discuss ways that expanding the domain of rights can diminish the power of existing rights, and we argue for a right to non-discrimination in credit access, rather than a right to credit access itself.



Bauchet, Jonathan and Jonathan Morduch and Shamika Ravi 2014. What Can We Learn from Impact Assessments? “What Can We Learn from Impact Assessments?” Chapter 4 in Practical Guide to Impact Assessments of Microinsurance. Edited by Ralf Rademacher and Katja Roth. Microinsurance Network. 2014.
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This chapter introduces the basics of quantitative impact assessments. The context is microinsurance, but the lessons apply more broadly. The chapter covers seletion bias, control groups, randomization, statistical power, internal validity, and external validity.

Robert Cull, Asli Demirgüç-Kunt, and Jonathan Morduch 2014. Banks and Microbanks Journal of Financial Services Research (2014) 46:1–53. DOI 10.1007/s10693-013-0177-z
Banks and Microbanks

We combine two datasets to examine whether the presence of banks affects the profitability and outreach of microfinance institutions.We find evidence that competition matters. Greater bank penetration in the overall economy is associated with microbanks pushing toward poorer markets, as reflected in smaller average loans sizes and greater outreach to women. The evidence is particularly strong for microbanks relying on commercial-funding and using traditional bilateral lending contracts (rather than group lending methods favored by microfinance NGOs). We consider plausible alternative explanations for the correlations, including relationships that run through the nature of the regulatory environment and the structure of the banking environment, but we fail to find strong support for these alternative hypotheses.

David Roodman and Jonathan Morduch 2014. The Impact of Microcredit on the Poor in Bangladesh: Revisiting the Evidence Journal of Development Studies 50 (4), April 2014: 583-604.
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We replicate and reanalyse the most influential study of microcredit impacts (Pitt and Khandker, 1998). That study was celebrated for showing that microcredit reduces poverty, a much hoped-for possibility (though one not confirmed by recent randomized controlled trials). We show that the original results on poverty reduction disappear after dropping outliers, or when using a robust linear estimator. Using a new program for estimation of mixed process maximum likelihood models, we show how assumptions critical for the original analysis, such as error normality, are contradicted by the data. We conclude that questions about impact cannot be answered in these data.


Bauchet, Jonathan and Jonathan Morduch 2013. Is Micro Too Small? Microcredit vs. SME Finance World Development 43: 288-297. 2013.
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Microcredit and SME finance are often pitched as alternative strategies to create employment opportunities in low-income communities. So far, though, little is known about how employment patterns compare. We integrate evidence from three surveys to show that, compared to Bangladeshi microcredit customers, typical SME employees in Bangladesh have more education and professional skills, and live in households that are notably less poor. SME jobs also require long work weeks, clashing with family responsibilities. The evidence from Bangladesh rejects the idea that SME finance more efficiently creates jobs for the population currently served by microcredit.

Karlan, Dean and Jonathan Morduch 2013. Economics, First Edition. McGraw-Hill/Irwin.
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Built from the ground up to focus on what matters to students in today’s high-tech, globalized world, Dean Karlan and Jonathan Morduch’s Economics represents a new generation of products, optimized for digital delivery and available with the best-in-class adaptive study resources in McGraw-Hill’s LearnSmart Advantage Suite. Engagement with real-world problems is built into the very fabric of the learning materials as students are encouraged to think about economics in efficient, innovative, and meaningful ways.

Drawing on the authors’ experiences as academic economists, teachers, and policy advisors, a familiar curriculum is combined with material from new research and applied areas such as finance, behavioral economics, and the political economy, to share with students how what they’re learning really matters. This modern approach is organized around learning objectives and matched with sound assessment tools aimed at enhancing students’ analytical and critical thinking competencies. Students and faculty will find content that breaks down barriers between what goes on in the classroom and what is going on in our nation and broader world.

By teaching the right questions to ask, Karlan and Morduch provide readers with a method for working through decisions they’ll face in life and ultimately show that economics is the common thread that enables us to understand, analyze, and solve problems in our local communities and around the world.

Morduch, Jonathan 2013. How Microfinance Really Works The Milken Institute Review
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About half of the world’s adults lack bank accounts. Most of these “unbanked” are deemed too expensive to serve, or not worth the hassle created by banking regulations. But what may be good business from a banker’s perspective isn’t necessarily what’s best for society. The inequalities that persist in financial access reinforce broader inequalities in the distribution of income and wealth. This is the opening for microfinance and also its challenge. Microlending has been sold as a practical means to get capital into the hands of small-scale entrepreneurs who can then earn their way out of poverty. The idea appeals to our impulse to help people help themselves and to our conviction that bottom-up development depends on the embrace of the market. By eschewing governments and traditional charities, the sector promises to sidestep the bureaucracy and inertia that have hobbled other attempts to expand the opportunities of the poor.


(eds.) Cull, Robert, Asli Demirgüç-Kunt and Jonathan Morduch 2012. Banking The World The MIT Press
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About 2.5 billion adults, just over half the world’s adult population, lack bank accounts. If we are to realize the goal of extending banking and other financial services to this vast “unbanked” population, we need to consider not only such product innovations as microfinance and mobile banking but also issues of data accuracy, impact assessment, risk mitigation, technology adaptation, financial literacy, and local context. In Banking the World, experts take up these topics, reporting on new research that will guide both policy makers and scholars in a broader push to extend financial markets.

The contributors consider such topics as the complexity of surveying people about their use of financial services; evidence of the impact of financial services on income; the occasional negative effects of financial services on poor households, including disincentives to work and overindebtedness; and tools for improving access such as nontraditional credit scores, financial incentives for banking, and identification technologies that can dramatically reduce loan default rates.

Bauer, Michal; Julie Chytilová; and Jonathan Morduch 2012. Behavioral Foundations of Microcredit: Experimental and Survey Evidence from Rural India American Economic Review 102 (2), April 2012: 1118-1139.
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We use experimental measures of time discounting and risk aversion for villagers in south India to highlight behavioral features of microcredit, a financial tool designed to reduce poverty and fix credit market imperfections. The evidence suggests that microcredit contracts may do more than reduce moral hazard and adverse selection by imposing new forms of discipline on borrowers. We find that, conditional on borrowing from any source, women with present-biased preferences are more likely than others to borrow through microcredit institutions. Another particular contribution of microcredit may thus be to provide helpful structure for borrowers seeking self-discipline.

Dehejia, Rajeev; Heather Montgomery and Jonathan Morduch 2012. Do interest rates matter? Credit demand in the Dhaka Slums Journal of Development Economics, 97(2): 437-449
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“Best practice” in microfinance holds that interest rates should be set at profit-making levels, based on the belief that even poor customers favor access to finance over low fees.  Despite this core belief, little direct evidence exists on the price elasticity of credit demand in poor communities.  We examine increases in the interest rate on microfinance loans in the slums of Dhaka, Bangladesh.  Using unanticipated between-branch variation in prices, we estimate interest elasticities from -0.73 to -1.04, with our preferred estimate being at the upper end of this range. Interest income earned from most borrowers fell, but interest income earned from the largest customers increased, generating overall profitability at the branch level. 

Kiviat, Barbara and Jonathan Morduch 2012. From Financial Literacy to Financial Action McGraw-Hill Research Foundation, January 2012.
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More than ever, Americans need to be financially savvy. The past few years have shown that mortgages can be complicated, business-cycle downswings severe, and investing far from obvious. And, for many of us, saving is not easy. Creating a successful financial life takes a high level of know-how and stamina. Not surprisingly, efforts to increase financial literacy among Americans have won wide support

Jonathan Morduch 2012. Notre façon de voir la pauvreté [How we see poverty] FACTS, Special Issue 4 (Lutte contre la pauvreté), January 2012: 14-19.
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How we think about poverty is colored by how we measure it. For economists, that often means seeing poverty through quantities measured in large, representative surveys. The surveys give a comprehensive view, but favor breadth over depth. Typical economic surveys are limited in their ability to tease out informal activity, and, while they capture yearly sums, they offer little about how the year was actually lived by families. Year-long financial diaries provide a complementary way of seeing poverty, with a focus on week by week choices and challenges. The result is a re-framing of poverty and its relationship to money, calling for greater attention to financial access and a broader notion of how finance matters.


Jonathan Morduch 2011. Not so Fast: The Realities of Impact Investing America's Quarterly
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At the beginning of 2010, the Indian microfinance sector was a hotspot for impact investors. The promise of impact investing could be seen in the number of investors lining up to participate in the IPO of SKS Microfinance. 

SKS had ballooned from 603,000 borrowers in fiscal year 2007 to 6.8 million in fiscal year 2010.  Most were women in South Indian villages. The founder of SKS, Vikram Akula, had been saluted by Time and the World Economic Forum, and his Harvard-published memoir told the story of an “unexpected quest to end poverty through profitability.” 

But by 2011, the Indian microfinance sector was mired in bad press and political controversy.  Newspapers accused lenders of putting poor villagers in debt and causing suicides. State-level legislation in late 2010 capped interest rates and scared away equity investors.  Borrowers ceased to repay, and SKS’s share price plummeted, dipping below 200 rupees in late August 2011 (from an IPO price of 985 rupees in August 2010). As summer 2011 ended, BASIX—a pioneering competitor of SKS-- very publicly searched for funding to stay afloat.

Both the achievements and challenges in India hold lessons for impact investors. 

Impact investing has been widely touted, with microfinance as a leading example.  The temptation to attract capital by promising macro-impact at a micro-cost is difficult to resist—and India continues to be one of the most important and innovative microfinance markets. But getting the equation right is more complicated than most advocates admit.

Here are seven lessons on challenges, risks and realities drawn from three decades of microfinance ups and downs.

Jonathan Morduch 2011. Why Finance Matters Science, vol. 332, 10 June 2011: 1271-1272.

Roughly one-half of the world’s adults, about 2.5 billion people, have neither a bank account nor access to semiformal financial services such as “microcredit,” the growing practice in developing nations of providing small loans, typically less than US$500, to self-employed people. But what if they did? Muhammad Yunus, the 2006 Nobel Peace Prize winner and founder of Bangladesh’s Grameen Bank, a pioneering microcredit institution, argues that this lack of financial access means that the poor, especially poor women, can’t obtain the loans they need to build their businesses and get on a path out of poverty. The idea has taken hold: In 2009, for instance, Grameen Bank served 8 million customers; its average loan balance was just $127. Worldwide, microcredit advocates now claim more than 190 million customers. Proof of concept, however, is not proof of impact. Recent studies have found that some efforts to provide small loans have produced surprisingly weak results, and in this issue, Karlan and Zinman provide more evidence that we need to rethink microcredit. Their findings, from a randomized evaluation of microcredit lending in the Philippines, adds to a handful of recent results that suggest that microcredit’s effectiveness has been overstated by studies that selectively focus on success stories.

Cull, Robert; Asli Demirgüç-Kunt; and Jonathan Morduch 2011. Does Regulatory Supervision Curtail Microfinance Profitability and Outreach? World Development 39(6): 949-965, June 2011
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We combine two datasets to examine whether the scale of an economy’s banking system affects the profitability and outreach of microfinance institutions. We find evidence that competition matters. Greater bank penetration in the overall economy is associated with microbanks pushing toward poorer markets, as reflected in smaller average loans sizes and greater outreach to women. The evidence is particularly strong for microbanks that rely on commercial-funding, use traditional bilateral lending contracts (rather than group lending methods favored by microfinance NGOs), and take deposits. We consider plausible alternative explanations for the correlations, including relationships that run through the nature of the regulatory environment and the structure of the banking environment, but we fail to find strong support for these alternative hypotheses.

Conning, J. & Morduch, J. 2011. Microfinance and Social Investment Annual Review of Financial Economics, vol. 3, ed. Robert Merton and Andrew Lo. 2011: 407-434.
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This paper puts a corporate finance lens on microfinance.  Microfinance aims to democratize global financial markets through new contracts, organizations, and technology. We explain the roles that government agencies and socially-minded investors play in supporting the entry and expansion of private intermediaries in the sector, and we disentangle debates about competing social and commercial firm goals. We frame the analysis with theory that explains why microfinance institutions serving lower-income communities charge high interest rates, face high costs, monitor customers relatively intensively, and have limited ability to lever assets. The analysis blurs traditional dividing lines between non-profits and for-profits and places focus on the relationship between target market, ownership rights and access to external capital.

Gershman, John and Jonathan Morduch. 2011. Credit is Not a Right
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Is credit a human right? Muhammad Yunus, the most visible leader of a global movement to provide microcredit to world’s poor, says it should be. NYU’s John Gershman and FAI’s Jonathan Morduch disagree. In their new paper, Credit is Not a Right, they ask whether a rights-based approach to microcredit will in fact be effective in making quality, affordable credit more available to poor families – and, more importantly, whether it is a constructive step in terms of the broader goal of global poverty reduction. Jonathan Morduch argues his case in this video.


Jonathan Morduch 2010. Borrowing to Save Journal of Globalization and Development 102 (2), December 2010.
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Poor families often borrow even when they have savings sufficient to cover the loan. The practice is costly relative to drawing down one’s own savings, and it seems particularly puzzling in poor communities.  The families themselves explain that it is easier to repay a moneylender than to “repay” oneself, an explanation in line with recent findings in behavioral economics.  In this context, high interest rates on loans can help instill discipline.  While workable, the mechanism is hardly optimal; options could be improved through access to a contractual saving device that helps savers rebuild assets after a major withdrawal.

Gine, Xavier, Pamela Jakiela, Dean Karlan, and Jonathan Morduch 2010. Microfinance Games American Economic Journal: Applied Economics 2(3): 60-95, July 2010.
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Microfinance banks use group-based lending contracts to strengthen borrowers' incentives for diligence, but the contracts are vulnerable to free-riding and collusion. We systematically unpack microfinance mechanisms through ten experimental games played in an experimental economics laboratory in urban Peru. Risk-taking broadly conforms to theoretical predictions, with dynamic incentives strongly reducing risk-taking even without group-based mechanisms. Group lending increases risk-taking, especially for risk-averse borrowers, but this is moderated when borrowers form their own groups. Group contracts benefit borrowers by creating implicit insurance against investment losses, but the costs are borne by other borrowers, especially the most risk averse. 

Beatriz Armendáriz and Jonathan Morduch 2010. The Economics of Microfinance, 2nd edition Cambridge, MA: MIT Press.
Amazon page


1 Rethinking Banking 

2 Why Intervene in Credit Markets? 

3 Roots of Microfinance: ROSCAs and Credit Cooperatives

4 Group Lending

5 Beyond Group Lending

6 Savings and Insurance

7 Gender

8 Commercialization and Regulation

9 Measuring Impacts

10 Subsidy and Sustainability

11 Managing Microfinance 

Morduch, J. & Bauchet, J. 2010. Selective Knowledge: Reporting Bias in Microfinance Data Perspectives on Global Development and Technology.
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Answering surveys is usually voluntary, yet much of our knowledge depends on the willingness of households and institutions to answer. In this study, we explore the implications of voluntary reporting on knowledge about microfinance. We show systematic biases in microfinance institutions' choices about which survey to respond to and which specific indicators to report. The analysis focuses on data for 2,072 microfinance institutions from MixMarket and the Microcredit Summit Campaign databases for the years 2004-2006. In general, we find that financial indicators are more often reported than social indicators. The patterns of reporting correlate with the institutions' region of operation, mission, and size. The patterns in turn affect analyses of key questions on trade-offs between financial and social goals in microfinance. For example, the relationship between operational self-sufficiency and the percentage of women borrowers is positive in the Microcredit Summit Campaign data but negative in the MixMarket data. The results highlight the conditional nature of our knowledge and the value of supporting social reporting.

Jonathan Morduch and Jonathan Bauchet 2010. An Introduction to Impact Evaluations with Randomized Design Financial Access Initiative Framing Note. March 2010.
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Jonathan Morduch, Alberto Chaia, Aparna Dalal, Tony Goland, Maria Jose Gonzalez, and Robert Schiff 2010. Half the World is Unbanked Financial Access Initiative Report, October 2009. Feature in McKinsey Quarterly, March 2010
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Limited information on the size and nature of the global population using financial services limits policy makers’ abilities to identify what’s working and what’s not, and it limits financial services providers’ abilities to identify where the opportunities lie and where they could learn from current successes.

A new report, “Half the world is unbanked,” provides an improved estimate of the size and nature of the global population that does and does not use formal (or semiformal) financial services.

This paper builds on a data set compiled from existing cross-country data sources on financial access and socioeconomic and demographic characteristics to generate an improved estimate of the size and nature of the global population that does and does not use formal (or semiformal) financial services.

Jonathan Morduch, Dean Karlan and Sendhil Mullainathan 2010. Take-Up Financial Access Initiative Framing Note. February 2010.


Collins, D., Morduch, J., Rutherford, S. & Ruthven, O. 2009. Portfolios of the Poor: How the World's Poor Live on $2 a Day Princeton, NJ: Princeton University Press. May 2009
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About forty percent of the world's people live on incomes of two dollars a day or less. If you've never had to survive on an income so small, it is hard to imagine. How would you put food on the table, afford a home, and educate your children? How would you handle emergencies and old age? Every day, more than a billion people around the world must answer these questions. Portfolios of the Poor is the first book to explain systematically how the poor find solutions.

The authors report on the yearlong "financial diaries" of villagers and slum dwellers in Bangladesh, India, and South Africa--records that track penny by penny how specific households manage their money. The stories of these families are often surprising and inspiring. Most poor households do not live hand to mouth, spending what they earn in a desperate bid to keep afloat. Instead, they employ financial tools, many linked to informal networks and family ties. They push money into savings for reserves, squeeze money out of creditors whenever possible, run sophisticated savings clubs, and use microfinancing wherever available. Their experiences reveal new methods to fight poverty and ways to envision the next generation of banks for the "bottom billion."

Jonathan Morduch 2009. Foreword In Stuart Rutherford, The Pledge: ASA, Microfinance and Peasant Politics in Bangladesh. New York: Oxford University Press. 2009.
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Morduch, J. & Karlan, D. 2009. Access to Finance Handbook of Development Economics, Volume 5.  Amsterdam:  Elsevier. 2009
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Morduch, J., Cull, R. & Demirguc-Kunt, A. 2009. Microfinance Meets the Market February Journal of Economic Perspectives 23(1), Winter:  167-192.
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In this paper, we examine the economic logic behind microfinance institutions and consider the movement from socially oriented nonprofit microfinance institutions to for-profit microfinance. Drawing on a large dataset that includes most of the world's leading microfinance institutions, we explore eight questions about the microfinance "industry": Who are the lenders? How widespread is profitability? Are loans in fact repaid at the high rates advertised? Who are the customers? Why are interest rates so high? Are profits high enough to attract profit-maximizing investors? How important are subsidies? The evidence suggests that investors seeking pure profits would have little interest in most of the institutions we see that are now serving poorer customers. We will suggest that the future of microfinance is unlikely to follow a single path. The recent clash between supporters of profit-driven Banco Compartamos and of the Grameen Bank with its "social business" model offers us a false choice. Commercial investment is necessary to fund the continued expansion of microfinance, but institutions with strong social missions, many taking advantage of subsidies, remain best placed to reach and serve the poorest customers, and some are doing so at a massive scale. The market is a powerful force, but it cannot fill all gaps.


Morduch, J. & Jonston Jr., D. 2008. The Unbanked: Evidence from Indonesia October   World Bank Economic Review 22(3): 517-537
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To analyze the prospects for expanding financial access to the poor, bank professionals assessed 1,438 households in six provinces in Indonesia to judge their creditworthiness. About 40 percent of poor households were judged creditworthy according to the criteria of Indonesia's largest microfinance bank, but fewer than 10 percent had recently borrowed from a microbank or formal lender. Possessing collateral appeared as a minor determinant of creditworthiness, in keeping with microfinance innovations. Although these households were judged able to service loans reliably, most desired small loans. Calculations show that the bank, given its current fee structure and banking practices, would lose money when lending at the scales desired. So, while innovations have helped to extend financial access, it remains difficult to lend in small amounts and cover costs.

Morduch, J. 2008. The Knowledge Bank in William Easterly, editor, Reimagining Foreign Aid. Cambridge, MA: MIT Press.
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The urgency of reducing poverty in the developing world has been the subject of a public campaign by such unlikely policy experts as George Clooney, Alicia Keyes, Elton John, Angelina Jolie, and Bono. And yet accompanying the call for more foreign aid is an almost universal discontent with the effectiveness of the existing aid system. In Reinventing Foreign Aid, development expert William Easterly has gathered top scholars in the field to discuss how to improve foreign aid. These authors, Easterly points out, are not claiming that their ideas will (to invoke a current slogan) Make Poverty History. Rather, they take on specific problems and propose some hard-headed solutions.

Jonathan Morduch 2008. Can the Poor Afford Microcredit? Financial Access Initiative Framing Note. May 2008.
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Jonathan Morduch 2008. Household Savings in Low-Income Countries: An annotated reading list Financial Access Initiative. March 2008.
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Morduch, J. & Collins, D. 2008. Banking Low-Income Populations: Perspectives from South Africa Insufficient Funds:  Savings, Assets, Credit and Banking Anomg Low-Income Households.  New York:  Russell Sage,

Morduch, J. & Durlauf, S., Blume, L. 2008. Micro-Credit New Palgrave Dictionary of Economics Second Edition.  Palgrave Macmillan. 2008

Written by 1506 eminent contributors, this new edition of The New Palgrave Dictionary of Economics retains many classic essays of enduring importance and contains 1,872 articles. Published in eight print volumes and for the first time in online format, this is the definitive scholarly reference work for a new generation of economists.


Jonathan Morduch 2007. Smart Subsidy Chapter 5 in Bernd Balkenhol, ed., Microfinance and Public Policy: Outreach, Performance and Efficiency. Palgrave/Macmillan, 2007, pp. 72-85.

Jonathan Morduch, Mudit Kapoor, and Shamika Ravi 2007. From Microfinance to m-Finance Innovations: Technology, Governance, Globalization Winter/Spring 2007, Vol. 2, No. 1-2: 82-90.
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Morduch, J., Cull, R. & Demirguc-Kunt, A. 2007. Financial Performance and Outreach: A Global Analysis of Leading Microbanks Economic Journal, February 2007, Vol. 117, Issue 517, pp. F107-F133
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Microfinance promises to reduce poverty by employing profit-making banking practices in low-income communities. Many microfinance institutions have secured high loan repayment rates but, so far, relatively few earn profits. We examine why this promise remains unmet. We explore patterns of profitability, loan repayment, and cost reduction with unusually high-quality data on 124 institutions in 49 countries. The evidence shows the possibility of earning profits while serving the poor, but a trade-off emerges between profitability and serving the poorest. Raising fees to very high levels does not ensure greater profitability and the benefits of cost-cutting diminish when serving better-off customers.


Jonathan Morduch 2006. Poverty Measures Chapter 3. United Nations Handbook of Poverty Statistics. New York: United Nations.
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Jonathan Morduch 2006. Concepts of Poverty Chapter 2. United Nations Handbook of Poverty Statistics. New York: United Nations.
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Morduch, J. 2006. Micro-Insurance: The Next Revolution? In Understanding Poverty, edited by Abhijit Banerjee, Roland Benabou, and Dilip Mookherjee. Oxford University Press, 2006.
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This essay focuses on the design of insurance products for poor customers. Several promising innovations are described: credit life insurance, health insurance partnerships, and weather insurance. Each was created to serve populations that were previously unserved, and workable institutional solutions are emerging. The next step must be to shift from the question of what creates workable institutions to the question of how to refine designs to best serve low-income populations. In doing so, current approaches must be reassessed in order to most improve clients’ lives and to avoid doing unintended harm.


Jonathan Morduch 2005. Smart Subsidy for Sustainable Microfinance Finance for the Poor 4 (6), Asian Development Bank, Manila, December 2005: 1-7.
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Jonathan Morduch 2005. Implementing the Microenterprise Results and Accountability Act of 2004 Testimony for the House International Relations Committee, Subcommittee on Africa, Global Human Rights and International Operations. September 20, 2005.
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Morduch, J. & Armendariz de Aghion, B. 2005. The Economics of Microfinance Harvard University. MIT Press: Cambridge,

The microfinance revolution, begun with independent initiatives in Latin America and South Asia starting in the 1970s, has so far allowed 65 million poor people around the world to receive small loans without collateral, build up assets, and buy insurance. This comprehensive survey of microfinance seeks to bridge the gap in the existing literature on microfinance between academic economists and practitioners. Both authors have pursued the subject not only in academia but in the field; Beatriz Armendáriz de Aghion founded a microfinance bank in Chiapas, Mexico, and Jonathan Morduch has done fieldwork in Bangladesh, China, and Indonesia. The authors move beyond the usual theoretical focus in the microfinance literature and draw on new developments in theories of contracts and incentives. They challenge conventional assumptions about how poor households save and build assets and how institutions can overcome market failures. The book provides an overview of microfinance by addressing a range of issues, including lessons from informal markets, savings and insurance, the role of women, the place of subsidies, impact measurement, and management incentives. It integrates theory with empirical data, citing studies from Asia, Africa, and Latin America and introducing ideas about asymmetric information, principal-agent theory, and household decision making in the context of microfinance. The Economics of Microfinance can be used by students in economics, public policy, and development studies. Mathematical notation is used to clarify some arguments, but the main points can be grasped without the math. Each chapter ends with analytically challenging exercises for advanced economics students.

Morduch, J. 2004. Consumption Smoothing Across Space: Tests for Village-Level Responses to Risk Stefan Dercon, ed., Insurance Against Poverty. Oxford University Press,
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In the important and topical area of insurance and risk, this book proposes new forms of insurance for developing economies. Thorough, up-to-date thematic papers and case studies, development assessments and policy analyses from a broad scope of disciplines.

Morduch, J. 2004. Managing Tradeoffs in ID21, August 2004 issue. Special issue on "What role for microfinance? Reframing the questions."
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Achieving both profitability and strong social performance is the ultimate promise of microfinance. It is not impossible, but neither is it easy and few microlenders are there yet. Ten years ago it had been hoped that achieving both goals would simply be a matter of raising interest rates on loans. If borrowers were willing to pay, say, 50% interest per year for a loan, rather than 30%, the microlender’s profits would see an immediate boost, and, it was hoped, the well-being of clients would not be seriously hurt. Both parts of the claim are true up to a point, but increasing interest rates too high can bring financial and political difficulty and risk undermining social impacts.

Morduch, J. & Kamanaou, G. 2004. Measuring Vulnerability to Poverty Stefan Dercon, ed., Insurance Against Poverty. Oxford University Press,
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This book evaluates alternatives in widening insurance and social protection provision - including sustainability and poverty effects, in thematic papers and case studies, development assessments, and policy analyses.

Morduch, J. & Armendariz de Aghion, B. 2004. Microfinance: Where Do We Stand? Chapter included in Charles Goodhart, editor, Financial Development and Economic Growth: Explaining the Links. Basingstoke, Hampshire, UK: Palgrave Macmillan,
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The most successful economies have the best working financial markets. While causation obviously runs in both directions, current research has increasingly emphasized the role of finance in promoting growth. Here seven leading financial economists explore the links between financial development and growth. The book seeks to answer the question of the role of finance in promoting sustainable growth and in the reduction of poverty, for example via micro-financial institutions.

Morduch, J. 2004. The Grameen Bank Rethinks Microcredit (In Japanese), Ajiken World Trend 106 (7) (Institute of Developing Economies, Chiba), June


Jonathan Morduch and Akihiko Matsui 2003. The Strategy of Global Public Goods Presented at NYU Conference on Foreign Aid and Northeast University Development Consortium, Yale University. December 2003.
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Increasingly international institutions like the United Nations and the World Bank are redefining their missions in terms of global public goods provision. Global public goods have benefits that spill across national borders, and priorities include constructing financial architecture, generating and spreading knowledge, peace-keeping, containing disease, and cleaning up the environment. The rhetoric of global public goods underscores the notion that sending foreign aid overseas can deliver benefits at home as well. As in standard analyses of public goods, under-supply can occur due to free-riding, and public action can improve eficiency. But other cases depart from the standard analysis. We consider cases in which the content of global public goods may be controversial, and where welfare may be a function of multiple public goods consumed simultaneously. In this setting, free-riding may be encouraged and strategic policymakers may choose the quality of public goods to either "crowd out" or "crowd in" the provision of other public goods. The formal analysis is illustrated with discussion of two recent initiatives to provide global public goods: the failed proposal to start an Asian Monetary Fund in 1997 and the World Bank's announcement in 1996 that it is becoming a "Knowledge Bank" that spreads information on international development policy.

Morduch, J. & Rutherford, S. 2003. Microfinance: Analytical Issues for India India's Financial Sector: Issues, Challenges and Policy Options. Edited by Basu, Priya. Oxford University Press
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Poor households face many constraints in trying to save, invest, and protect their livelihoods. They take financial intermediation seriously and devote considerable effort to finding workable solutions. Most of the solutions are found in the informal sector, which, so far, offers low-income households convenience and flexibility unmatched by formal intermediaries. The microfinance movement is striving to match the convenience and flexibility of the informal sector, while adding reliability and the promise of continuity, and in some countries it is already doing this on a significant scale. Getting to this point - reaching poor people on a massive scale with popular products on a continuous basis - has involved rethinking basic assumptions along the way. One by one, the keywords of the 1980s and 1990s - women, groups, graduation, microbusinesses, and credit - are giving way to those of the new century - convenience, reliability, continuity, and a flexible range of services. We describe the elements that we feel have contributed most and that are most relevant for India.

Morduch, J., Hashemi, S. & Littlefield, E. 2003. Is Microfinance an Effective Strategy to Reach the Millenium Development Goals? Focus Note No. 24. Washington, DC: Consultative Group to Assist the Poor. July
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The United Nations' Millennium Development Goals (MDGs) have galvanized the development community with an urgent challenge to improve the welfare of the world's neediest people. This paper reviews the mounting body of evidence showing that the availability of financial services for poor households is a critical contextual factor with strong impact on the achievement of MDGs. Evidence from the millions of microfinance clients around the world demonstrates that access to financial services enables poor people to increase their household incomes, build assets, and reduce their vulnerability to the crises that are so much a part of their daily lives.

Morduch, J. & Haley, B. 2003. Microfinance and Poverty Reduction: What is the Bottom Line? In Exclusion et Liens Financiers. Lyon: Centre Walras,


Morduch, J. & Sharma, M. 2002. Strengthening Safety Nets from the Bottom Up Development Policy Review 20 (5), November, pp. 569-88,
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This paper describes ways to build public safety nets to complement and extend informal and private institutions. It demonstrates that the most effective policies will combine both transfer systems that are sensitive to existing mechanisms and new institutions for providing insurance and credit and for generating savings.

Morduch, J. 2002. Replicating Microfinance in the United States: Opportunities and Challenges (with Mark Schreiner) Chapter 1 of Replicating Microfinance in the United States, edited by Jim Carr and Zhong Yi Tong. Baltimore: Woodrow Wilson Center/Johns Hopkins University Press,
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Microfinance was pioneered in the developing world as the lending of small amounts of money to entrepreneurs who lacked the kinds of credentials and collateral demanded by banks. Similar practices spread from the developing to the developed world, reversing the usual direction of innovation, and today several hundred microfinance institutions are operating in the United States.

Replicating Microfinance in the United States reviews experiences in both developing and industrialized countries and extends the applications of microlending beyond enterprise to consumer finance, housing finance, and community development finance.

This book reviews experiences in both developing and industrial countries and extends the applications of microlending beyond enterprise to consumer finance, housing finance, and community development finance, concentrating especially on previously underserved households and their communities.


Morduch, J. & Sicular, T. 2002. Rethinking Inequality Decomposition, with Evidence from Rural China Economic Journal 112 (476), January 2002, 93-106.
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We examine inequality decompositions by income source and describe a general, regression-based approach for decomposing inequality. The approach provides an efficient and flexible way to quantify the roles of variables like education and age in a multivariate context. We illustrate the method using survey data from China. The empirical results demonstrate how sharply different conclusions can emerge for different decomposition rules. We explain how these differences reflect the treatment of equally-distributed sources of income, and we discuss implications for how results from inequality decomposition are interpreted. Copyright Royal Economic Society 2002


Jonathan Morduch 2001. Rainfall Insurance and Vulnerability: Economic Principles and Cautionary Notes World Bank. Background Note for the Rainfall Insurance Project for Nicaragua. March 2001
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Morduch, J. & Sicular, T. 2001. Risk and Insurance in Transition: Perspectives from Zouping County, China Chapter 8 in Community and Market in Economic Development, Oxford University Press, edited by Professors Masahiko Aoki and Yujiro Hayami.

This book explores the role of community in facilitating the transition to market relationships in economic development, and in controlling and sustaining local public goods such as irrigation, forests, grazing land, and fishing grounds. Previously it was customary to classify economic systems in terms of varying combinations of state and market control of resource allocation. In contrast, this book recognizes community as the third major element of economic systems. This new approach also departs from the conventional view that markets and community norms should be treated as mutually exclusive means of organizing economic activity, instead clarifying the situations in which they may become complementary. Further discussion focuses on the conditions under which management of local commons can, and should, be delegated to local communities rather than subjected to the control of central government.


Morduch, J. 2000. Sibling Rivalry in Africa American Economic Review (AEA, Papers and Proceedings) 90 (2), May 2000, 405 - 409.
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This article uses data on young teenagers to investigate how sibling composition affects schooling outcomes in South Africa and Tanzania. The results, while not estimated very precisely, establish additional evidence of positive associations between school completion and the number of sisters a child has (controlling for the total number of siblings), but the evidence from South Africa shows that they are not general findings. The estimates are conditional on the given family structure, and of course, family structure may not be fully exogenous to schooling choices.

Morduch, J. 2000. Microfinance Beyond Group Lending with Beatriz Armendariz de Aghion. The Economics of Transition 8 (2) 2000: 401-420.
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Studies the mechanisms that allows microfinance programs to successfully penetrate new segments of credit markets. Repayment rates from low-income borrowers; Microfinance in transition economies; Non-refinancing threats; Features of microfinance credit contracts.

Morduch, J. & Sicular, T. 2000. Politics, Growth, and Inequality in Rural China: Does it Pay to Join the Party? Journal of Public Economics 77 (3), September 2000, 331 - 346.
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Presents survey data of the household incomes of local officials in northern China and their relation to market liberalization, increases in consumer demand and the provision of local public goods. Description of the rank-and-file bureaucrats; Political status in rural China; Survey data and economic setting; Effects of political variables on income levels; Analyses; Economic reform.

Morduch, J. 2000. Reforming Poverty Alleviation Policies published in Economic Policy Reform: The Second Stage, edited by Professor Anne Krueger, University of Chicago Press,
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In the world today, about one billion people live on less than one dollar per day, and about two to three billion live on less than two dollars per day (World Bank 1997). Thirty years ago, the numbers looked very different. Broad-based economic growth in populous countries like China and Indonesia has substantially reduced rates of absolute poverty. In Indonesia, for example, the fraction of the population below the poverty line fell from 58 to 17 percent between 1972 and 1982, and in Brazil the fraction fell from 50 to 21 percent between 1960 and 1980 (World Bank 1993a). Similarly, China boasts a reduction in rural poverty from 31 to 7 percent between 1978 and 1995, a decrease by 185 million people. These changes have left a growing concentration of world poverty in slow-growth areas of South Asia and Africa.

Morduch, J. 2000. The Microfinance Schism World Development, 28 (4), April 2000, 617 - 629.
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Presents a study on win-win proposition, a principle of good banking, by leading microfinance advocates which can alleviate poverty through microfinance institution. Logic of the win-win proposition; Advantages of financial sustainability; Limits of the proposition.


Morduch, J. 1999. The Microfinance Promise Journal of Economic Literature, Dec 1999, Vol. 37 Issue 4, p1569, 46p.
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The article presents information about a set of financial institutions in underdeveloped countries which are striving to alleviate poverty by providing financial services to low-income households. These institutions, united under the banner of microfinance, share a commitment to serving clients that have been exclude from the formal banking sector. Almost all of the borrowers do so to finance self-employment activities, and many start by taking loans as small as $75, repaid over several months or a year. Only a few programs require borrowers to put up collateral, enabling would-be entrepreneurs with few assets to escape positions as poorly paid wage laborers or farmers. The programs point to innovations like "group-lending" contracts and new attitudes about subsidies as keys to their success. Group-lending contracts effectively make a borrower's neighbors co-signers to loans, mitigating problems created by informational asymmetries between lender and borrower. Neighbours now have incentives to monitor each other and to exclude risky borrowers from participation, promoting repayment even in the absence of collateral requirements.

Morduch, J. 1999. Between the Market and State: Can Informal Insurance Patch the Safety Net? World Bank Research Observer, 14 (2), August 1999, 187 - 207.
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Examines use of informal insurance arrangements in households of low-income countries. Relationship between household consumption and income; Ways in dealing economic hardships; Systems of reciprocal transfers; Role of public policy in reducing economic vulnerability; Overview on microcredit, insurance and employment guarantee schemes.

Morduch, J. & Anand, S. 1999. Poverty and the 'Population Problem' Population and Poverty in Developing Countries, Massimo Livi-Bacci and Gustavo de Santis, eds., Oxford University (Clarendon) Press.

Morduch, J. 1999. The Role of Subsidies in Microfinance: Evidence from The Grameen Bank Journal of Development Economics, 60, October 1999, 229-248.
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Focuses on the role of subsidies in microfinance as evidenced by the Grameen Bank of Bangladesh. Difficulties in maintaining high repayment rates; Role of the bank in alleviating poverty; Recognition of the myriad benefits that have been attributed to program participation.


Jonathan Morduch 1998. Does Microfinance Really Help the Poor?: New Evidence from Flagship Programs in Bangladesh Presented at Stanford, UC-Berkeley, University of Washington, RAND, University of Toronto, Princeton, and Yale. Research Program in Development Studies, Woodrow School of Public and International Affairs. June 1998.
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The microfinance movement has built on innovations in financial intermediation that reduce the costs and risks of lending to poor households. Replications of the movement’s flagship, the Grameen Bank of Bangladesh, have now spread around the world. While programs aim to bring social and economic benefits to clients, few attempts have been made to quantify benefits rigorously. This paper draws on a new cross-sectional survey of nearly 1800 households, some of which are served by the Grameen Bank and two similar programs, and some of which have no access to programs. Households that are eligible to borrow and have access to the programs do not have notably higher consumption levels than control households, and, for the most part, their children are no more likely to be in school. Men also tend to work harder, and women less. More favorably, relative to controls, households eligible for programs have substantially (and significantly) lower variation in consumption and labor supply across seasons. The most important potential impacts are thus associated with the reduction of vulnerability, not of poverty per se. The consumption-smoothing appears to be driven largely by income-smoothing, not by borrowing and lending.

The evaluation holds lessons for studies of other programs in low-income countries. While it is common to use fixed effects estimators to control for unobservable variables correlated with the placement of programs, using fixed effects estimators can exacerbate biases when, as here, programs target their programs to specific populations within larger communities.

Morduch, J. 1998. Poverty, Economic Growth, and Average Exit Time Economics Letters 59, 385-390.
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Morduch, J. Garg, A. 1998. Sibling Rivalry and the Gender Gap: Evidence from Child Health Outcomes in Ghana Journal of Populations Economics 11 (4), December 1998, 471 - 493.
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When capital and labor markets are imperfect, choice sets narrow, and parents must choose how to ration available funds and time between their children. One consequence is that children become rivals for household resources. In economies with pro-male bias, such rivalries can yield gains to having relatively more sisters than brothers. Using a rich household survey from Ghana, we find that on average if children had all sisters (and no brothers) they would do roughly 25-40% better on measured health indicators than if they had all brothers (and no sisters). The effects are as large as typical quantity-quality trade-offs, and they do not differ significantly by gender.

Bravo, D., Godoy, R. & Morduch, J. 1998. Technological Adoption in Rural Cochabamba, Bolivia Journal of Anthropological Research 54, 351-371.
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Morduch, J. & Stern, H. 1997. Using Mixture Models to Detect Sex Bias in Health Outcomes in Bangladesh Journal of Econometrics 77 (1), March, 259-276.
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Many interesting economic hypotheses entail differences in behaviors of groups within a population, but analyses of pooled samples shed only partial light on underlying segmentations. Finite mixture models are considered as an alternative to methods based on pooling. Robustness checks using t-regressions and a Bayesian analogue to the likelihood ratio test for model evaluation are developed. The methodology is used to investigate pro-son bias in child health outcomes in Bangladesh. While regression analysis on the entire sample appears to wash out evidence of bias, the mixture models reveal systematic girl-boy differences in health outcomes.


Morduch, J. Klibanoff, P. 1995. Decentralization, Externalities, and Efficiency Review of Economic Studies 62, April 1995, 223-247.
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In the competitive model, externalities lead to inefficiencies, and inefficiencies increase with the size of externalities. However, as argued by Coase, these problems may be mitigated in a decentralized system through voluntary coordination We show how coordination is limited by the combination of two factors: respect for individual autonomy and the existence of private information. Together they imply that efficient outcomes can only be achieved through coordination when external effects are relatively large Moreover, there are instances in which coordination cannot yield any improvement at all, despite common knowledge that social gains from agreement exist This occurs when external effects are relatively small, and this may help to explain why coordination is so seldom observed in practice. When improvements are possible, we describe how simple subsidies can be used to implement second-best solutions and explain why standard solutions, such as Pigovian taxes, cannot be used. Possible extensions to issues arising in the structure of research joint ventures, assumptions in the endogenous growth literature, and the location of environmental hazards are also described.

Morduch, J. 1995. Income Smoothing and Consumption Smoothing Journal of Economic Perspectives 9(3), Summer 1995, 103-114.
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Examines the ways in which farm households in developing countries may self-insure, with a particular emphasis on the idea that farm households may seek to smooth their consumption by altering their methods of production. Quantifying the importance of risk; Consumption smoothing and risk; Income smoothing; Simplicity and complexity in low-income economies.


Jonathan Morduch 1994. Poverty and Vulnerability American Economic Review (AEA Papers and Proceedings) 84 (2), May 1994, 221 - 225.
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Jonathan Morduch, Karen Brooks, and Yakov Urinson 1994. Distributional Consequences of the Russian Price Reform Economic Development and Cultural Change 42:3, April 1994, 469 - 484.
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Jonathan Morduch and Alan Taylor 1993. A Model of Price Liberalization in Russia In The Economics of Transformation: Theory and Practice in the New Market Economies, eds. A. Schipke and A. Taylor (Berlin, New York: Springer, 1993).
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Jonathan Morduch 1992. Reflections on Alternative Allocation Mechanisms In Approaches to Poverty Alleviation in Indonesia. Report 136/92/255, HIID/Indonesia, November 1992.


Jonathan Morduch 1990. Risk, Production and Saving: Theory and Evidence from Indian Households Presented at Harvard, Stanford, UC-San Diego, UC-Los Angeles, U. of Pennsylvania, Boston College, U. of Virginia, Princeton, Yale, UC-Berkeley. November 1990 (Revised June 1993).


Jonathan Morduch, Avishay Braverman, and Jeffrey S. Hammer 1987. Wheat and Maize Price Policies in Hungary: Tradeoffs between Foreign Exchange and Government Revenue Agricultural Economics 1, 1987. 273-290.
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This paper reports on a methodology designed to examine the effects of selected agricultural policies in Hungary. The purpose of the paper is twofold. The first is to explain the methodology, dubbed multi-market analysis in previous work, which is implemented on personal computers to support discussions on policy reforms.

The second is to examine wheat and maize policies in Hungary. While the model is constructed to focus on these policies, it will also be possible to outline ways to use the model to address other problems.

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