Francisco Galarza

Dynamic Field Experiments in Development Economics: Risk Valuation in Morocco, Kenya and Peru

The effective design and implementation of interventions that reduce vulnerability and poverty require a solid understanding of underlying poverty dynamics and associated behavioral responses. Stochastic and dynamic benefit streams can make it difficult for the poor to learn the value of such interventions to them. We explore how dynamic field experiments can help (i) intended beneficiaries to learn and understand these complicated benefit streams, and (ii) researchers to better understand how the poor respond to risk when faced with nonlinear welfare dynamics. We discuss and analyze dynamic risk valuation experiments in Morocco, Peru, and Kenya.

Increasing Indebtedness, Institutional Change and Credit Contract in Peru

This paper reviews the main causes of the rapid growth of credit in Peru during the 1990s. The creation of new types of lending intermediaries besides traditional banks has allowed debt to increase and credit to be extended to new classes of borrowers such as middle and lower-class urban residents. Improvements in information-sharing, borrower selection and the range of public and private arrangements available have further aided the expansion of credit. Evaluating several case studies, the paper concludes that credit growth remains limited by inefficient judicial enforcement procedures and insufficient information on borrowers` credit risk.