Khandker, Shahidur R.

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Last updated January 31, 2023
Shahidur R. Khandker (PhD, McMaster University, Canada, 1983) is currently a visiting senior research fellow at the International Food Policy Research Institute (IFPRI) and a former lead economist in the Development Research Group of the World Bank.  He has authored more than 40 articles in peer-reviewed journals, including the Journal of Political Economy, Review of Economic Studies, World Bank Economic Review, and Journal of Development Economics.  He has also written various books, including the Handbook on Impact Evaluation: Quantitative Methods and Practices, co-authored with Gayatri Koolwal and Hussain Samad and published by the World Bank; Seasonal Hunger and Public Policies: Evidence from Northwest Bangladesh, co-authored with Wahiduddin Mahmud; Fighting Poverty with Microcredit: Experience in Bangladesh, published by Oxford University Press; and Handbook on Poverty and Inequality, co-authored with Jonathan Haughton and published by the World Bank.  He has written several book chapters and more than three dozen discussion papers at the World Bank on poverty, rural finance and microfinance, agriculture, and infrastructure.  His work spans some 30 countries and covers a wide range of development issues, from microfinance and rural finance, agriculture, and infrastructure to poverty, seasonality, and energy.
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Now showing 1 - 10 of 45
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    The Poverty Impact of Rural Roads: Evidence from Bangladesh
    ( 2009) Khandker, Shahidur R. ; Bakht, Zaid ; Koolwal, Gayatri B.
    A rationale for public investment in rural roads is that households can better exploit agricultural and nonagricultural opportunities to employ labor and capital more efficiently. Significant knowledge gaps persist, however, as to how opportunities provided by roads actually filter back into household outcomes as well as distributional consequences. This study examines the impacts of two rural road-paving projects in Bangladesh using a new quasi-experimental household panel data set surveying project and control villages before and after program implementation. A household panel fixed-effects methodology controlling for initial area conditions is used to estimate the impact of paved roads on household and individual outcomes and account for potential bias in program placement at the village level. Rural road investments are found to reduce poverty significantly through higher agricultural production, lower input and transportation costs, and higher agricultural output prices at local village markets. Rural road development has also led to higher secondary schooling enrollment for boys and girls, as compared to primary school enrollment. We find that road investments have also benefited the poor, meaning the gains are significant for the poor and in some cases disproportionately higher than for the nonpoor.
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    Seasonal Hunger and Its Mitigation in North-West Bangladesh
    (Taylor and Francis, 2012-11-20) Khandker, Shahidur R. ; Khalily, M.A. Baqui ; Samad, Hussain A.
    Seasonal hunger may result from seasonality of agriculture when households fail to smooth income and consumption. Using household survey data from the north-west region of Bangladesh, this article examines alternative measures of seasonal hunger, and provides some evidence to support policies and programmes needed to mitigate seasonal hunger. The results suggest that a large majority of food-vulnerable households are the perpetual poor, as opposed to a small percentage of households who are subject to food deprivation only during the lean period. Findings suggest that government safety net programmes and microcredit provide a cushion for the poor to stave off seasonal hunger.
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    Are Microcredit Participants in Bangladesh Trapped in Poverty and Debt?
    (World Bank, Washington, DC, 2013-04) Khandker, Shahidur R. ; Samad, Hussain A.
    This paper addresses whether microcredit participants in Bangladesh are trapped in poverty and debt, as many critics have argued in recent years. Analysis of data from a long panel survey over a 20-year period confirms this is not the case, although numerous participants have been with microcredit programs for many years. The results of the analysis suggest that participants derive a variety of benefits from microcredit: It helps them to earn income and consume more, accumulate assets, invest in children's schooling, and be lifted out of poverty. This is not to say that non-participants have failed to progress over the same period. Both participants and non-participants have gained as the economy has grown; however, the rates of poverty reduction have been higher for participants. Testing the net effect of microcredit programs requires applying an econometric method that controls for why some households participated and others did not, conditional on their initial characteristics. In addition, the method must control for time-varying, unobserved heterogeneity that affects everyone over time, albeit in possibly different ways. The paper's econometric estimates show significant welfare gains resulting from microcredit participation, especially for women. They also show that the accrued benefits of borrowing outweigh accumulated debt. As a result, households' net worth has increased, and both poverty and the debt-asset ratio have declined.
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    Seasonal Migration to Mitigate Income Seasonality : Evidence from Bangladesh
    (Taylor and Francis, 2011-12-19) Khandker, Shahidur R. ; Baqui Khalily, M. A. ; Samad, Hussain A.
    In north-west Bangladesh, some 36 per cent of poor households migrate every year during the lean (monga) period to cope with seasonal deprivation. Analysis of household survey data shows that the probability of seasonal migration is high for households with a high dependency ratio, high dependency on wage employment, and in villages with high unemployment; but low in villages with microcredit access. Findings show that seasonal migration helps households to smooth consumption and that non-migrant households who suffer during monga would likely benefit from deciding to migrate. But the cost of migration and lack of networking are potential barriers.
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    Does Access to Finance Matter in Microenterprise Growth? Evidence from Bangladesh
    (World Bank, Washington, DC, 2013-01) Khandker, Shahidur R. ; Samad, Hussain A. ; Ali, Rubaba
    In less-developed economies such as Bangladesh, the farm sector is the major source of employment and income, while the rural nonfarm sector provides as an additional source of income. But the rural nonfarm sector increasingly plays an important role in fostering the development of the rural economy. A significant share of this sector is made up of microenterprise activities, which requires investment and access to adequate funds. This paper investigates the role access to finance plays in promoting the efficiency and growth of microenterprise activities. The findings suggest that households engaged in microenterprise activities, in addition to farm and other nonfarm activities, are much better off (in terms of income, expenditure and poverty) than those not engaged in such activities. Fewer than 10 percent of the enterprises have access to institutional finance (formal banks or microcredit), although the rate of return on microenterprise investments is more than sufficient (36 percent per year) to repay institutional loans. The research suggests that credit constraints may reduce the enterprises' profit margin by as much as 13.6 percent per year. As the returns to microenterprise investment are found to be high, microfinance institutions can play a larger role in supporting microenterprise growth in Bangladesh.
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    Microfinance and Poverty : Evidence using Panel Data from Bangladesh
    (Published by Oxford University Press on behalf of the World Bank, 2005-09-08) Khandker, Shahidur R.
    Microfinance supports mainly informal activities that often have a low return and low market demand. It may therefore be hypothesized that the aggregate poverty impact of microfinance is modest or even nonexistent. If true, the poverty impact of microfinance observed at the participant level represents either income redistribution or short run income generation from the microfinance intervention. This article examines the effects of microfinance on poverty reduction at both the participant and the aggregate levels using panel data from Bangladesh. The results suggest that access to microfinance contributes to poverty reduction, especially for female participants, and to overall poverty reduction at the village level. Microfinance thus helps not only poor participants but also the local economy.
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    Are Microcredit Borrowers in Bangladesh Over-indebted ?
    (World Bank, Washington, DC, 2013-08) Khandker, Shahidur R. ; Faruqee, Rashid ; Samad, Hussain A.
    Microcredit programs in Bangladesh have experienced spectacular growth in recent years, with a growing number of borrowers availing credit from multiple microcredit agencies. There is a growing concern that if there are not sufficient returns to borrowing from microfinance institutions (MFIS), some borrowers might be taking loans that they will not be able to repay. A household may be considered over-indebted, for example, if its debt liability exceeds 40 percent of its income or assets. Using a long panel of household survey data from Bangladesh, the paper finds that some 26 percent of microcredit borrowers are over-indebted on this measure versus 22 percent of non-microcredit borrowers. Econometric analysis suggests that both MFI competition and multiple borrowing raise indebtedness. However, repeated borrowing, while it affects short-term liability adversely, does affect the long-term debt-asset ratio favorably. That is, repeated borrowing helps increase assets more than debt over time. Microcredit borrowers in Bangladesh are thus not necessarily over-indebted. But when borrowing is seen as protection against shocks such as floods even at the cost of being indebted, MFIs may offer micro-insurance schemes to safeguard borrowers against economic shocks.
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    Estimating the Effects of Credit Constraints on Productivity of Peruvian Agriculture
    (World Bank, Washington, DC, 2013-10) Woutersen, Tiemen ; Khandker, Shahidur R.
    This paper proposes an estimator for the endogenous switching regression models with fixed effects. The estimator allows for endogenous selection and for conditional heteroscedasticity in the outcome equation. Applying the estimator to a dataset on the productivity in agriculture substantially changes the conclusions compared to earlier analysis of the same dataset. This paper proposes an estimator for the endogenous switching re-gression models with fixed effects. The estimator allows for endogenous selection and for conditional heteroscedasticity in the outcome equation. Applying the estimator to a dataset on the productivity in agriculture substantially changes the conclusions compared to earlier analysis of the same dataset.
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    The Benefits of Solar Home Systems : An Analysis from Bangladesh
    (World Bank, Washington, DC, 2013-12) Samad, Hussain A. ; Khandker, Shahidur R. ; Asaduzzaman, M. ; Yunus, Mohammad
    The Government of Bangladesh, with help from the World Bank and other donors, has provided aid to a local agency called Infrastructure Development Company Limited and its partner organizations to devise a credit scheme for marketing solar home system units and making these an affordable alternative to grid electricity for poor people in remote areas. This paper uses household survey data to examine the financing scheme behind the dissemination of these solar home systems, in particular the role of the subsidy; the factors that determine the adoption of the systems in rural Bangladesh; and the welfare impacts of such adoption. The paper finds that while the subsidy has been declining over time, the demand for solar home systems has seen phenomenal growth, mostly because of technological developments that have made the systems increasingly more affordable. Households with better physical and educational endowments are more likely to adopt solar home systems than poor households. The price of the system matters in household decision making -- a 10 percent decline in the price of the system increases the overall demand for a solar panel by 2 percent. As for the benefits, adoption of a solar home system improves children s evening study time, lowers kerosene consumption, and provides health benefits for household members, in particular for women. It is also found to increase women's decision-making ability in certain household affairs. Finally, it is found to increase household consumption expenditure, although at a small scale.
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    Restoring Balance : Bangladesh's Rural Energy Realities
    (World Bank, Washington, DC, 2009-03) Asaduzzaman, M. ; Barnes, Douglas F. ; Khandker, Shahidur R.
    This study, the first to concentrate on Bangladesh's energy systems and their effects on the lives of rural people, drew on these background studies, as well as other World Bank-financed research on IAP and rural infrastructure, to present a rural energy strategy for the country. The study's broad aim was to identify ways to improve the living standard in rural Bangladesh through better and more efficient use of energy, while creating an environment conducive to growth and poverty reduction. For any developing country, the crux of a rural energy strategy is to have more and better choices for meeting rural demand for energy through market mechanisms and sound policy. This goes hand in hand with the development of competent implementing institutions, which are critical to the process. Also important are new supply- and demand side technologies that can be used to raise rural people's welfare and improve productivity to increase growth prospects. Accordingly, the rural energy strategy advocated by this study aims to satisfy the types of demand that increase household welfare and raise rural growth prospects as energy becomes a direct input into the production process.