Study of the Thai Million Baht Village Fund
Notre Dame Department of Economics faculty analyzed the Thai Million Baht Village Fund—one of the largest government microfinance initiatives of its kind—to evaluate and understand the benefits and disadvantages of such interventions. The government of Thailand’s goal was to increase credit and stimulate the economy, using government funds to create nearly 80,000 village banks. The National Institutes of Health-funded study of the program suggests that microfinancing can have varying results for participants and may not be the most cost-effective use of funds for many situations.
The resulting paper, “A Structural Evaluation of a Large-Scale Quasi-Experimental Microfinance Initiative” by professors Joseph P. Kaboski and Robert M. Townsend, ran in the September 2011 issue of Econometrica. The selection committee singled the paper out for “its combination of rigorous theory and careful econometrics to produce important insights into a major development policy.”