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Rosca Participation in Benin: a Commitment Issue

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Abstract

In the light of first-hand data from a Beninese urban household survey in Cotonou, we investigate several motives aiming to explain participation in Rotating Savings and Credit ASsociations. We provide anecdotal pieces of evidence, descriptive statistics, FIML regressions and matching estimates which tend to indicate that most individuals use their participation in a rosca as a device to commit themselves to save money and to deal with self-control problems.

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  • Olivier Dagnelie & Philippe LeMay-Boucher, 2008. "Rosca Participation in Benin: a Commitment Issue," UFAE and IAE Working Papers 735.08, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    • Handle: RePEc:aub:autbar:735.08
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    Cited by:

    1. Alistair Munro, 2014. "Hide and Seek: A Theory of Efficient Income Hiding within the Household," GRIPS Discussion Papers 14-17, National Graduate Institute for Policy Studies.
    2. Muhammad Saqib & Sajjad Ahmad & Naila Nazir, 2017. "Informal Saving Organizations in Pakistan," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 7(8), pages 388-397, August.
    3. Karna Basu, 2011. "Hyperbolic Discounting and the Sustainability of Rotational Savings Arrangements," American Economic Journal: Microeconomics, American Economic Association, vol. 3(4), pages 143-171, November.
    4. Luc Dossa & Barbara Rischkowsky & Regina Birner & Clemens Wollny, 2008. "Socio-economic determinants of keeping goats and sheep by rural people in southern Benin," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 25(4), pages 581-592, December.
    5. Adnan Shoaib & Muhammad Ayub Siddiqui, 2020. "Why do people participate in ROSCA saving schemes? Findings from a qualitative empirical study," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 47(2), pages 177-189, June.
    6. Jacopo Bonan & Philippe LeMay-Boucher & Douglas Scott, 2016. "Can Hypothetical Time Discounting Rates Predict Actual Behaviour: Evidence from a Randomized Experiment," Working Papers 2016.74, Fondazione Eni Enrico Mattei.
    7. Rabie, Dina, 2021. "RoSCAs in Egypt: A Banking Institution or a Commitment Device?," ILE Working Paper Series 52, University of Hamburg, Institute of Law and Economics.
    8. Basu, Karna, 2014. "Commitment savings in informal banking markets," Journal of Development Economics, Elsevier, vol. 107(C), pages 97-111.
    9. Kyle McNabb & Philippe LeMay-Boucher & Jacopo Bonan, 2019. "Enforcement Problems in ROSCAs: Evidence from Benin," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 31(5), pages 1389-1415, December.
    10. AMANKWAH, ERNEST & Gockel, Fritz Augustine & Osei-Assibey, Eric, 2019. "Pareto Superior dimension of Rotating Savings and Credit Associations (ROSCAs) in Ghana: Evidence from Asunafo North Municipality of Ghana," MPRA Paper 96308, University Library of Munich, Germany.
    11. Abbi M Kedir & Richard Disney & Indraneel Dasgupta, 2011. "Why use ROSCAs when you can use banks? Theory, and evidence from Ethiopia," Discussion Papers in Economics 11/32, Division of Economics, School of Business, University of Leicester, revised Jun 2011.
    12. A. Lasagni & E. Lollo, 2011. "Participation in Rotating Savings and Credit Associations in Indonesia: New Empirical Evidence on Social Capital," Economics Department Working Papers 2011-EP05, Department of Economics, Parma University (Italy).
    13. Bonan, Jacopo & LeMay-Boucher, Philippe & Scott, Douglas, 2022. "Can hypothetical measures of time preference predict actual and incentivised behaviour? Evidence from Senegal," World Development, Elsevier, vol. 159(C).
    14. Baland, Jean-Marie & Guirkinger, Catherine & Hartwig, Renate, 2019. "Now or later? The allocation of the pot and the insurance motive in fixed roscas," Journal of Development Economics, Elsevier, vol. 140(C), pages 1-11.
    15. Adelman, Sarah, 2013. "Keep your friends close: The effect of local social networks on child human capital outcomes," Journal of Development Economics, Elsevier, vol. 103(C), pages 284-298.
    16. Alistair Munro, 2018. "Intra†Household Experiments: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 32(1), pages 134-175, February.

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    More about this item

    Keywords

    ROSCA; self-control; commitment device; Benin;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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