Dangers of a Double-Bottom Line: A Poverty Targeting Experiment Misses Both Targets (WP-18-09)


WP-18-09

Dean Karlan, Adam Osman, and Jonathan Zinman

 

Two for-profit Philippine social enterprises, aiming to demonstrate corporate social responsibility by increasing microlending to the poor, incorporated a widely-used poverty measurement tool into their loan applications and tested the tool using randomized training content. Treated loan officers were instructed why and how to use the tool for targeting; control group training merely labeled the tool "additional household information." The targeting training backfired, leading to no additional poor applicants and lower-performing loans. Descriptive evidence suggests the targeting training exacerbated loan officer misperceptions and multitasking problems. The results help explain why corporate social responsibility efforts are often siloed from core operations.

 

Dean Karlan, Professor of Economics and Finance, IPR Associate, and Co-Director of the Global Poverty Research Lab at the Buffett Institute for Global Studies, Northwestern University 

Adam Osman, Assistant Professor of Economics, University of Illinois at Urbana-Champaign

Jonathan Zinman, Professor of Economics, Dartmouth College

PDF icon Download working paper PDF