Dangers of a Double-Bottom Line: A Poverty Targeting Experiment Misses Both Targets (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.