Published on: 2017-09-15
Co-organized with the Department of Economics, Hong Kong University of Science and Technology.
Individuals can have social preferences defined over their friends or share some group identity with: these lead to well-studied issues of favoritism and in-group bias. Such social preferences might also be endogenously shaped by the presence of rival groups. We study these issues in the context of a standard anti-poverty program, delivered by locally recruited delivery agents in villages in Uganda. We use a field experiment to study how the targeting of the program by delivery agents is shaped by the social ties delivery agents have and the social context of villages where they operate. Our design exploits: (i) experimental variation in the social ties of delivery agents to farmers within villages that we engineer; (ii) non-experimental variation in group identity and conflict between groups across villages. We find that delivery agents are: (i) significantly more likely to target households they are socially tied; (ii) among their social ties, they are significantly more likely to target households in their group rather than those in rival groups; (iii) this distinction is exacerbated in villages in which group conflict is most salient . We then measure the allocation and total coverage of the anti-poverty program relative to three benchmarks: (i) if delivery agents were self-interested; (ii) if delivery agents have social ties but display no group biases; (iii) the social planner’s objective of targeting the poorest households. We document when social contexts lead to allocative biases, and highlight that some contexts – where group rivalry is greatest – lead to greater coverage. Overall, the results suggest that greater conflict between groups can enhance targeting within groups by delivery agents: in line with delivery agents have social preferences defined by ‘parochial altruism’. More generally, development programs that leverage off locally hired agents need to account for the social ties of those agents and the social context in which they are asked to operate.
Imran Rasul is Professor of Economics at University College London, co-director of the Centre for the Microeconomic Analysis of Public Policy at the Institute for Fiscal Studies, and research co-director of the Entrepreneurship Research Group of the International Growth Centre. His research interests include labor, development and public economics and his work has been published in leading journals such as theJournal of Political Economy, Quarterly Journal of Economics, Econometrica and theReview of Economic Studies. He is currently a co-editor of the Journal of the European Economic Association, and he been a co-editor and director of the Review of Economic Studies (2009-17). He was awarded the 2007 IZA Young Economist Prize, the 2008 CESIfo Distinguished Affiliate Award, an ERC-starter grant in 2012, and a British Academy Mid-career Fellowship in 2018.