What Does Debt Relief Do for Development? Evidence from India’s Bailout for Rural Households

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dc.creatorKanz, Martin
dc.date2019-01-03T18:24:42Z
dc.date2019-01-03T18:24:42Z
dc.date2016-10
dc.date.accessioned2026-07-01T00:39:33Z
dc.descriptionThis paper studies the impact of debt relief, using a natural experiment arising from India's "Agricultural Debt Waiver and Debt Relief Scheme," one of the largest household-level debt relief initiatives in history. I find that debt relief has a substantial impact on household balance sheets, but does not affect savings, consumption and investment, as predicted by theories of debt overhang or balance sheet distress. Instead, debt relief leads to greater reliance on informal credit, reduced investment, and lower agricultural productivity. Consistent with moral hazard generated by the bailout, beneficiaries are significantly less concerned about the reputational consequences of future default.
dc.formatapplication/pdf
dc.identifierAmerican Economic Journal: Applied Economics
dc.identifierhttps://hdl.handle.net/10986/31093
dc.identifier10.1596/31093
dc.identifier.urihttp://hdl.handle.net/123456789/408508
dc.publisherAmerican Economic Association
dc.rightsCC BY 3.0 IGO
dc.rightshttp://creativecommons.org/licenses/by/3.0/igo
dc.rightsAmerican Economic Association
dc.subjectPERSONAL FINANCE
dc.subjectFINANCIAL REGULATION
dc.subjectMICROECONOMIC ANALYSIS
dc.subjectFINANCIAL MARKETS
dc.subjectCORPORATE FINANCE
dc.subjectDEBT RELIEF
dc.subjectRURAL FINANCE
dc.subjectAGRICULTURE FINANCE
dc.subjectFOOD POLICY
dc.titleWhat Does Debt Relief Do for Development? Evidence from India’s Bailout for Rural Households
dc.typeJournal Article
dc.typeArticle de journal
dc.typeArtículo de revista

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