The Impact of Credit Policy on Rice Production in Myanmar

Rural finance has long been an important tool for poverty reduction and rural development by donors and governments, but the impacts have been controversial. Measuring impact is challenging due to identification problems caused by selection bias and governments’ targeted interventions, while randomi...

Full description

Saved in:
Bibliographic Details
Published inJournal of agricultural economics Vol. 70; no. 2; pp. 426 - 451
Main Authors Aung, Nilar, Nguyen, Hoa‐Thi‐Minh, Sparrow, Robert
Format Journal Article
LanguageEnglish
Published Oxford Wiley Subscription Services, Inc 01.06.2019
Subjects
Agricultural economics
Agricultural production
Credit
Credit policy
Crop yield
Discontinuity
Donors
Farm income
Finance
Myanmar
Oryza
Poverty
regression discontinuity
Rice
rice production
Rural areas
Rural communities
Rural development
rural finance
Selection bias
Subsidies
Myanmar (Burma)
Online AccessGet full text

Cover

More Information
Summary:Rural finance has long been an important tool for poverty reduction and rural development by donors and governments, but the impacts have been controversial. Measuring impact is challenging due to identification problems caused by selection bias and governments’ targeted interventions, while randomised trial data are scarce and limited to contexts where little to no rural finance exists. Using an author‐collected dataset, we provide insights on a large‐scale long‐lasting subsidised rice credit programme in Myanmar, one of the poorest and, until recently, most economically isolated countries in Asia. Identification relies on a fuzzy regression discontinuity design, exploiting an arbitrary element to the credit provision rule which is based on rice landholding size. Although we find little evidence that rice yield or output is increased, we do see that the programme has some positive effects on total household income, suggesting a positive spillover effect on other farm income activities.
Bibliography:for correspondence. Robert Sparrow is also with the Crawford School as well as with the Development Economics Group, Wageningen University, and the International Institute of Social Studies, Erasmus University Rotterdam, the Netherlands. The authors thank Tom Kompas for helpful discussion on earlier versions of this work. We also thank the Editor and two anonymous referees for their constructive comments, which helped us to improve the manuscript. Funding from the Crawford School and the Australian Centre for Biosecurity and Environmental Economics to carry out the survey is fully acknowledged. We thank all respondents for their participation.
hoa.nguyen@anu.edu.au
Nilar Aung and Hoa‐Thi‐Minh Nguyen are both in the Crawford School of Public Policy, Australian National University, Australia. E‐mail
ISSN:0021-857X
1477-9552
DOI:10.1111/1477-9552.12299