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Spillover Effects and Diffusion of Savings Groups

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  • Heitzig, Chris
  • O’Keeffe-O’Donovan, Rossa

Abstract

We estimate the spatial spillover effects of a program to promote savings groups in Uganda and Malawi. We use geolocation data from a cluster-randomized experiment to compare the outcomes of households in areas where a high proportion of nearby villages were randomly assigned to treatment to those in areas where a low proportion of nearby villages were assigned to treatment. We have four key results. First, take-up of the program is highest in villages where promotion by NGO-employed field officers was concentrated — promotion by peers was about half as effective, and ‘organic’ replication was rare. Second, we find evidence of large positive between-village spillover effects on total income, food security, and business outcomes in control villages. Third, we estimate positive direct effects of the program on business outcomes and financial inclusion — these estimates are qualitatively similar to a previous evaluation of the program (Karlan et al., 2017) which did not account for spillovers, though our estimated impacts on business outcomes are larger. Finally, we estimate that 23%–28% of the overall benefits of the program are not captured by an analysis which does not account for spatial spillover effects.

Suggested Citation

  • Heitzig, Chris & O’Keeffe-O’Donovan, Rossa, 2024. "Spillover Effects and Diffusion of Savings Groups," World Development, Elsevier, vol. 173(C).
    • Handle: RePEc:eee:wdevel:v:173:y:2024:i:c:s0305750x2300195x
    DOI: 10.1016/j.worlddev.2023.106377
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