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Self-Help Groups and Mutual Assistance: Evidence from Urban Kenya

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  • Marcel Fafchamps
  • Eliana La Ferrara

Abstract

This article examines the incomes of individuals who have joined self-help groups in poor neighborhoods of Nairobi. Self-help groups are often advocated as a way of facilitating income pooling. We find that incomes are indeed more correlated among individuals in the same group than among individuals who belong to different groups. Using an original methodology, we test whether this correlation is due to self-selection of similar individuals into the same groups. We find that this correlation is not driven by positive assortative matching. If anything, selection works in the opposite direction: incomes from group activities would be more correlated if individuals were matched at random. These findings are consistent with the idea that self-help groups play a mutual assistance role.

Suggested Citation

  • Marcel Fafchamps & Eliana La Ferrara, 2012. "Self-Help Groups and Mutual Assistance: Evidence from Urban Kenya," Economic Development and Cultural Change, University of Chicago Press, vol. 60(4), pages 707-733.
    • Handle: RePEc:ucp:ecdecc:doi:10.1086/665600
    DOI: 10.1086/665600
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    Cited by:

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    2. Auriol, Emmanuelle & Straub, Stéphane & Flochel, Thomas, 2016. "Public Procurement and Rent-Seeking: The Case of Paraguay," World Development, Elsevier, vol. 77(C), pages 395-407.
    3. Paul Anand & Swati Saxena & Rolando Gonzales Martinez & Hai-Anh H. Dang, 2020. "Can Women’s Self-help Groups Contribute to Sustainable Development? Evidence of Capability Changes from Northern India," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 21(2), pages 137-160, April.
    4. Brian P. Greaney & Joseph P. Kaboski & Eva Van Leemput, 2016. "Can Self-Help Groups Really Be "Self-Help"?," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 83(4), pages 1614-1644.
    5. Francesco Reito & Salvatore Spagano, 2014. "A Comparison between Formal and Informal Mutual-credit Arrangements," The Developing Economies, Institute of Developing Economies, vol. 52(2), pages 179-201, June.
    6. Gift Dafuleya & Fiona Tregenna, 2021. "How effectively do households insure food consumption and assets against funeral expenses? The case of urban Zimbabwe," Review of Economics of the Household, Springer, vol. 19(4), pages 987-1021, December.
    7. Parantap Basu & Sigit Sulistiyo Wibowo, 2015. "An Empirical Investigation of Risk Sharing among Indonesian Households," CEMAP Working Papers 2015_02, Durham University Business School.
    8. Nicholas Sabin, 2023. "Choosing partners: selection priorities of joint liability group leaders," Empirical Economics, Springer, vol. 64(1), pages 323-348, January.
    9. Rachel Cassidy & Marcel Fafchamps, 2015. "Can community-based microfinance groups match savers with borrowers? Evidence from rural Malawi," CSAE Working Paper Series 2015-13, Centre for the Study of African Economies, University of Oxford.
    10. Bennett, Rachel & Chepngeno-Langat, Gloria & Evandrou, Maria & Falkingham, Jane, 2015. "Resilience in the face of post-election violence in Kenya: The mediating role of social networks on wellbeing among older people in the Korogocho informal settlement, Nairobi," Social Science & Medicine, Elsevier, vol. 128(C), pages 159-167.
    11. Delpy, Léo, 2024. "Protection or pressure? reciprocity in informal social protection in southern Madagascar," World Development Perspectives, Elsevier, vol. 34(C).
    12. Yuejun Lawrance Cai, 2023. "Strengthening perceptions of virtual team cohesiveness and effectiveness in new normal: A hyperpersonal communication theory perspective," Asian Business & Management, Palgrave Macmillan, vol. 22(4), pages 1649-1682, September.

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    More about this item

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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