Solidarity and Microfinance

[Tuberculosis and solidarity].

Tuberculosis is very probably the oldest human epidemic and the one that has inflicted the most harm in the history of the species. Recent studies have estimated tuberculosis to be about 3 million years old,1 and during much of that time this disease has been our greatest scourge. It is difficult to accept that tuberculosis has been causing harm for so many millions of years and that even today...

Microfinance and Dynamic Incentives

Dynamic incentives, where incentives to repay are generated by granting access to future loans, is one of the methodologies used by microfinance institutions (MFIs). In this paper, I present a model of dynamic incentives where lenders are uncertain over how much borrowers value future loans. Loan terms are determined endogenously, and loans become more favorable as the probability of default be...

Priority, solidarity and egalitarianism

Using the axioms of “priority” and “solidarity” (solidarity in the influences of the changes in population or resources on the original members) in a variable and potentially infinite population model, Moreno-Ternero and Roemer (2006) establish an axiomatic characterization of index-egalitarian rules. We show that similar characterization results can be established in a fixed and finite populat...

Microfinance and Financial Development

Digital Solidarity

Over the last two decades, the Internet has been a laboratory for social innovation. One of the most unexpected collective discoveries has been the existence of another mode of organization to achieve large−scale co−ordination. This mode relies neither on the market, where price signals perform important co−ordinating functions horizontally (as Friedrich Hayek famously stated), nor on public an...