The Social Regulation of Markets

Why Microcredit Fails to Promote Jobs in Rural South India

Datos Bibliográficos

ID3884049
AutoresIsabelle Guérin (0000-0002-4476-0074), Bert D''Espallier, Bert D’espallier (0000-0001-7567-2520), Bert D'Espallier, Govindan Venkatasubramanian (0000-0002-0949-898X)
Año2015
Volumen46
Número6
Páginas1277-1301
Fecha de publicación2015-11-01
Peer ReviewedSí
Open AccessSí
TipoARTICLE
RevistaDevelopment and Change (JOURNAL)
Identificadores de la revistaISSN: 0012-155X • E-ISSN: 1467-7660
EditorialWiley (PUBLISHER • GB)
DOI10.1111/dech.12197
OpenAlexW1916296015
IdiomaEN
Citas recibidas19
Referencias citadas48

There is growing evidence that microcredit does little to support self-employment. Two main explanations are typically emphasized: from a microeconomic perspective, the poor have been argued to lack the skills, resources and motivation to start their own businesses; from a macroeconomic perspective, local markets are often saturated. This article uses first-hand data from rural South India to explore a third explanation which focuses on the social regulation of markets. Drawing on a household survey, the authors show that self-employment and microcredit are uncorrelated, and that women and lower castes have a significantly lower chance of starting up a business. The businesses they do start tend to be smaller, less profitable and based in very specific sectors. Qualitative insights into the workings of local economies show that caste and gender-based social regulations influence local markets determining who can produce or sell what, to whom, and at what price. The authors observe that real markets are affected by power relations and structured through social institutions rather than being the sum of interactions between free and competitive individuals. These findings show the importance of integrating self-employment programmes into broader policies for transforming the social regulation of markets and for eradicating discrimination against women and lower castes

Business · Caste · Economic growth · Economics · Labour economics · Market economy · Microfinance · Perspective (graphical) · Political science · Power (physics) · Qualitative property · Innovation and Socioeconomic Development · Microfinance and Financial Inclusion · Taxation and Compliance Studies