Abstract
The intersection of behavioural economics and microfinance has created an exciting subfield of studies. So too has the attention brought by the community of empirical political scientists to the effects of conflict on countries. This chapter critically examines the major works of each field, as relevant for an examination of microfinance in conflict, and highlights the overarching recommendations made by many for greater precision in empirical work. Taking the financial development literature apart for a closer look at what happens during conflict, a narrative is presented of decreasing demand and relevance for microfinance services during conflict. The chapter lays the groundwork for the significant practical challenges related to empirically measuring the anecdotal evidence. Moreover, it paves the way to engaging with these issues, and the current conversation, in a constructive and holistic way.
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Notes
- 1.
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Ibid., 41–42.
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Bryan, Gharad, Dean Karlan, and Scott Nelson. “Commitment devices.” Annual Review of Economics 2, no. 1 (2010): 671–698.
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Ibid., 3.
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Edmund S. Phelps, and Robert A. Pollak. “On second-best national saving and game-equilibrium growth.” The Review of Economic Studies 35, no. 2 (1968): 185–199.
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David Laibson. “Golden eggs and hyperbolic discounting.” The Quarterly Journal of Economics 112, no. 2 (1997): 443–478.
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Macartan, Humphreys. “Natural resources, conflict, and conflict resolution: Uncovering the mechanisms.” Journal of conflict resolution 49, no. 4 (2005): 508–537.
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Stefano Costalli, Luigi Moretti, and Costantino Pischedda “The economic costs of civil war: synthetic counterfactual evidence and the effects of ethnic fractionalization”. Household in Conflict Network (HiCN) Working Paper, Brighton 184 (2014).
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Paul Collier “On the economic consequences of civil war”. Oxford economic papers 51, no. 1 (1999): 168–183.
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Timothy Besley and Marta Reynal-Querol. “The legacy of historical conflict: Evidence from Africa.” American Political Science Review 108, no. 2 (2014): 319–336.
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Daron Acemoglu, Simon Johnson, and James A. Robinson. “The colonial origins of comparative development: An empirical investigation.” American Economic Review 91, no. 5 (2001): 1369–1401.
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For a good overview of the issues, refer to the Oxford Handbook of the Economics of Peace and Conflict (2012).
- 14.
James Fearon and Hoeffler, 2014. Benefits and Costs of the Conflict and Violence Targets for the Post-2015 Development Agenda. Copenhagen: Copenhagen Consensus Center.
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Anke Hoeffler and James Fearon (2014)’s cost estimates for selected categories of violence include collective violence, interpersonal violence, and homicides.
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Jeffrey Sachs. “The end of poverty: economic possibilities for our time.” European Journal of Dental Education 12, no. s1 (2008): 17–21.
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Paul Collier. The bottom billion: Why the poorest countries are failing and what can be done about it. Oxford University Press, USA, 2008.
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As quoted in Christopher, Blattman and Edward Miguel. “Civil war.” Journal of Economic Literature (2010): 3–57.
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Ibid.
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Robert Barro, J., N. Gregory Mankiw, and Xavier Sala-i-Martin. Capital mobility in neoclassical models of growth. No. w4206. National Bureau of Economic Research, 1992.
- 21.
Paul Collier. “On the economic consequences of civil war.” Oxford economic papers 51, no. 1 (1999): 168–183.
- 22.
Ibid.
- 23.
Dominik Bartsch. “Microfinance and refugees.” Forced Migration Review 20 (2004): 20.
- 24.
CGAP, 2014. A conversation with Michaël Knaute on the conflicts confronting many MFIs around the world. CGAP: Paris [online]. Available at: http://www.microfinancegateway.org/library/microfinance-conflict-zones-0. Accessed July 2016.
- 25.
Kuehnhast, 2001; Matabisi, 2011; Barr 2005, for example.
- 26.
PCMF, 2001. The Post Conflict Microfinance Periodical. [online]. Available at: http://www.spanish.microfinancegateway.org/files/14562_14562.pdf. Accessed March 2014.
- 27.
A product of the three-year DFID project on post-conflict microfinance, mentioned earlier.
- 28.
Karen Doyle 1998. Microfinance in the wake of conflict: Challenges and opportunities. USAID. [online]. Available at: http://pdf.usaid.gov/pdf_docs/Pnacd464.pdf. Accessed December 2016.
- 29.
CGAP, 2014. A conversation with Michaël Knaute on the conflicts confronting many MFIs around the world. CGAP: Paris [online]. Available at: http://www.microfinancegateway.org/library/microfinance-conflict-zones-0. Accessed July 2016.
- 30.
The Guardian. 2015. A Guide to Financial Inclusion in fragile states. The Guardian: New York [online]. Available at: https://www.theguardian.com/global-development-professionals-network/2015/nov/10/a-guide-to-financial-inclusion-in-fragile-states. Accessed January 2018.
- 31.
Cohen, Monique, Elizabeth Dunn, Nicholas Kalaitzandonakes, and Corinne Valdivia. “Risk and the impacts of microenterprise services” (1996).
- 32.
Ibid., 30.
- 33.
Formal financial institutions, on the other hand, are those that are subject to, and compliant with, their country’s banking laws, and may only represent a fraction of a user’s financial strategies, if any.
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Smith-Omomo, J. (2019). Certainty Premiums and Cognitive Loads. In: African Indigenous Financial Institutions. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-98011-9_2
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