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How not to punish your neighbour

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  • Becky Yang Hsu

Abstract

Purpose - – The paper aims to better understand why borrowers do not sanction one another in group-lending microfinance programmes. Design/methodology/approach - – The paper utilises interviews conducted in 16 villages in Western China. The data were complemented by ethnographic fieldwork of an NGO in the region. Findings - – The paper confirms the relevance to microfinance of existing literature showing that punishing others is costly, so people tend to wait for others to do it. It also reveals the existence of particularistic metanorms – norms of sanctioning that focus on whom one can and cannot punish. Additionally, it shows that people may punish according to whether they believe others are punishing. Research limitations/implications - – The results are not immediately generalisable to all group-lending programmes. Originality/value - – Fieldwork in rural China is difficult to conduct. Although cultural and social patterns are known to be important in development work, little is known about how it affects microfinance.

Suggested Citation

  • Becky Yang Hsu, 2014. "How not to punish your neighbour," International Journal of Development Issues, Emerald Group Publishing Limited, vol. 13(2), pages 113-128, July.
  • Handle: RePEc:eme:ijdipp:v:13:y:2014:i:2:p:113-128
    DOI: 10.1108/IJDI-03-2014-0019
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