Uganda's microfinance policy regime: An exploratio through a political-economy framework
AbstractIn 2005, Uganda’ government fundamentally shifted the direction of its microfinance (MF) policy. Hitherto it had focused on integrating MF institutions into the financial sector, allowing them to take deposits. Since 2005, it focuses on savings and credit cooperatives (SACCOs); with government funding of and ostensibly interfering in the SACCOs’ operations. This paper explores the reversal of policy direction, drawing on public choice theory. It finds that the shift of policy direction served the objectives of Uganda’s politicians to maintain political power, as it offered them an avenue to create loyalty through patronage. MF special interest groups – particularly development agencies – had chosen a strategy based on information and financial contributions that failed to incite politicians and to maintain univocal support from technocrats and MF practitioners.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 42374.
Date of creation: Oct 2012
Date of revision:
Political Economics; Microfinance; Policy; Uganda; Regulation; Policy Making; Economic Develoopment;
Find related papers by JEL classification:
- O55 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Africa
- D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
- D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation
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- Niskanen, William A, 1975. "Bureaucrats and Politicians," Journal of Law and Economics, University of Chicago Press, vol. 18(3), pages 617-43, December.
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