What Does Debt Relief Do for Development? Evidence from India’s Bailout for Rural Households

doi:10.1257/app.20130399

Publication:
What Does Debt Relief Do for Development? Evidence from India’s Bailout for Rural Households

dc.contributor.author	Kanz, Martin
dc.date.accessioned	2019-01-03T18:24:42Z
dc.date.available	2019-01-03T18:24:42Z
dc.date.issued	2016-10
dc.description.abstract	This paper studies the impact of debt relief, using a natural experiment arising from India's "Agricultural Debt Waiver and Debt Relief Scheme," one of the largest household-level debt relief initiatives in history. I find that debt relief has a substantial impact on household balance sheets, but does not affect savings, consumption and investment, as predicted by theories of debt overhang or balance sheet distress. Instead, debt relief leads to greater reliance on informal credit, reduced investment, and lower agricultural productivity. Consistent with moral hazard generated by the bailout, beneficiaries are significantly less concerned about the reputational consequences of future default.	en
dc.identifier.citation	American Economic Journal: Applied Economics
dc.identifier.doi	10.1596/31093
dc.identifier.uri	https://hdl.handle.net/10986/31093
dc.publisher	American Economic Association
dc.rights	CC BY 3.0 IGO
dc.rights.holder	American Economic Association
dc.rights.uri	http://creativecommons.org/licenses/by/3.0/igo
dc.subject	PERSONAL FINANCE
dc.subject	FINANCIAL REGULATION
dc.subject	MICROECONOMIC ANALYSIS
dc.subject	FINANCIAL MARKETS
dc.subject	CORPORATE FINANCE
dc.subject	DEBT RELIEF
dc.subject	RURAL FINANCE
dc.subject	AGRICULTURE FINANCE
dc.subject	FOOD POLICY
dc.title	What Does Debt Relief Do for Development? Evidence from India’s Bailout for Rural Households	en
dc.type	Journal Article	en
dc.type	Article de journal	fr
dc.type	Artículo de revista	es
dspace.entity.type	Publication
okr.associatedcontent	https://openknowledge.worldbank.org/handle/10986/12110 Working paper version (pre-print)	en
okr.associatedcontent	https://www.aeaweb.org/articles?id=10.1257/app.20130399 Journal website (version of record)
okr.date.disclosure	2019-01-03
okr.doctype	Publications & Research::Journal Article
okr.doctype	Publications & Research
okr.externalcontent	External Content
okr.identifier.doi	10.1257/app.20130399
okr.identifier.doi	10.1596/31093
okr.journal.nbpages	66-99
okr.language.supported	en
okr.peerreview	Academic Peer Review
okr.region.administrative	South Asia
okr.region.country	India
okr.topic	Finance and Financial Sector Development::Debt Markets
okr.topic	Finance and Financial Sector Development::Finance and Development
okr.topic	Rural Development::Agricultural Growth and Rural Development
okr.topic	Rural Development::Rural Development Strategy & Policy
okr.unit	Development Economics Research Group
okr.volume	8(4)