From a new working paper by Xavier Giné, Jessica Goldberg, and Dean Yang:
We report the results of a randomized field experiment that examines the credit market impacts of improvements in a lender’s ability to determine borrowers’ identities. Improved personal identification enhances the credibility of a lender’s dynamic repayment incentives by allowing it to withhold future loans from past defaulters and expand credit for good borrowers. The experimental context, rural Malawi, is characterized by an imperfect identification system. Consistent with a simple model of borrower heterogeneity and information asymmetries, fingerprinting led to substantially higher repayment rates for borrowers with the highest ex ante default risk, but had no effect for the rest of the borrowers. The change in repayment rates is driven by reductions in adverse selection (smaller loan sizes) and lower moral hazard (for example, less diversion of loan-financed fertilizer from its intended use on the cash crop).
An American in Paris: An Alien Feeling
From Numéro Cinq magazine, an interesting article by Sion Dayson about what it’s like for a biracial American to live in Paris:
Now in France — it’s been five years already — I need not chase slippery identities as I am considered only one thing: a foreigner. Full stop.
Here they keep no statistics on race or ethnicity. This is the land of liberté, egalité, fraternité, after all. Everyone is simply French. It would be “racist” to demand any further information from people, as if those answers mean anything.
When I open my mouth in Paris, the first response is not “welcome,” but “where are you from?” If it were simple curiosity, that would be one thing. (I am a curious person, too.) But there are no follow-up questions, no real interest. Only the need to establish a distance and an unspoken message: You are different from me.