Publication detail

Do Rural Banks Matter That Much? Burgess and Pande (AER, 2005) Reconsidered

Author(s): PhDr. Jaromír Baxa Ph.D.,
Nino Buliskeria ,
Type: IES Working Papers
Year: 2020
Number: 16
ISSN / ISBN:
Published in: IES Working Papers 16/2020
Publishing place: Prague
Keywords: Bank expansion, rural poverty, finance
JEL codes: G21, G28, O15, O16
Suggested Citation: Buliskeria N. and Baxa J. (2020): "Do Rural Banks Matter That Much? Burgess and Pande (AER, 2005) Reconsidered" IES Working Papers 16/2020. IES FSV. Charles University.
Abstract: We replicate Burgess and Pande (2005), who analyze the effects of the state-led expansion of the banking sector on poverty in India from 1961 to 1990. They find that the bank branch expansion in the rural areas decreased poverty due to improved access to credit and saving facilities. However, Burgess and Pande (2005) do not consider other simultaneous policies affecting the financial sector and poverty, in particular, the Integrated Rural Development Program aiming at credit subsidizing for the poor. Therefore, using the methodology by Burgess and Pande (2005), we show that structural shifts in the rural bank branch expansion and rural poverty can be identified for almost any other year between 1970 and 1984. Our results imply that the experiment by Burgess and Pande (2005) does not prove a superior impact of the bank branch expansion on poverty reduction in India.
Downloadable: wp_16_2020_buliskeria_baxa
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