Whether basic entrepreneurship can be inculcated amongst the poorest in society and serve as a route out of poverty remains an open question. Evidence was provided on this issue by looking at the effects of a large-scale asset transfer and training program which is targeted at the poorest women in rural Bangladesh. A randomized control trial research design was used and the survey was conducted on all households in the community. This allows mapping the full social network of the beneficiaries, on multiple dimensions of interaction. It was found that beneficiaries’ wealth levels and occupational structure converge to that of lower-middle-class households. Beneficiaries use their newly found wealth to purchase household durables, and improve their human capital, as measured by business skills and their health status. The program affects the composition of beneficiary households’ networks: they form ties to wealthier residents after the program. The program also affects outcomes among social network members but has no effect on households that are not socially connected to beneficiaries. The findings suggest that such programs have effects beyond beneficiary households and that the network structures and outcomes in targeted communities are transformed by them.
Author: Bandiera, Oriana; Burgess, Robin; Gulesci, Selim; Rasul, Imran
Type: Review/Synthesis Paper
Year: 2009