Individual Consequences of Monitoring Under Gainsharing: Expanding Agency Theory Predictions

Agency theory suggests that gainsharing produces changes in monitoring within teams, however, the implications of monitoring on individual behavior have not yet been examined. This research expands agency theory by exploring the behavioral implications of peer monitoring under gainsharing. Performance data from both individual workers and managers show that peer monitoring has either zero or positive effects on five categories of individual behavior. However, focus group, interview, and company generated survey data indicate the existence of concealment and perhaps retaliatory behaviors in response to gainsharing

Determinants of Moral hazard in Microfinance: Empirical Evidence from Joint Liability Lending Schemes in Malawi

Moral hazard is widely reported as a problem in credit and insurance markets, mainly arising from information asymmetry. Although theorists have attempted to explain the success of Joint Liability Lending (JLL) schemes in mitigating moral hazard, empirical studies are rare. This paper investigates the determinants of moral hazard among JLL schemes from Malawi, using group level data from 99 farm and non-farm credit groups. Results reveal that peer selection, peer monitoring, peer pressure, dynamic incentives and variables capturing the extent of matching problems explain most of the variation in the incidence of moral hazard among credit groups. The implications are that Joint Liability Lending institutions will continue to rely on social cohesion and dynamic incentives as a means to enhancing their performance which has a direct implication on their outreach, impact and sustainability.moral hazard, joint liability, dynamic incentives, group lending, Malawi, Financial Economics,

Determinants of Moral Hazard in Microfinance: Empirical Evidence from Joint Liability Lending Programs in Malawi

Moral hazard is widely reported as a problem in credit and insurance markets, mainly arising from information asymmetry. Although theorists have attempted to explain how group lending with joint liability can be an important tool for mitigating moral hazard among the poor, empirical studies are rare and sometimes give mixed results. In Malawi, for example, although, group lending with joint liability has been practiced for nearly four decades, the unwillingness to repay loans remains the single major cause of default. This paper examines the extent of occurrence of moral hazard and investigates its determinants of occurrence among joint liability lending programs from Malawi, using group level data from 99 farm and non-farm credit groups. Results reveal that peer selection, peer monitoring, peer pressure, dynamic incentives and variables capturing the extent of matching problems explain most of the variation in the incidence of moral hazard among credit groups. The implications are that joint liability lending institutions will continue to rely on social cohesion and dynamic incentives as a means to enhancing their performance which has a direct implication on their outreach, impact and sustainability.moral hazard; joint liability; dynamic incentives; group lending; Malawi

Empty rituals? A qualitative study of users’ experience of monitoring & evaluation systems in HIV interventions in western India

In global health initiatives, particularly in the context of private philanthropy and its ‘business minded’ approach, detailed programme data plays an increasing role in informing assessments, improvements, evaluations, and ultimately continuation or discontinuation of funds for individual programmes. The HIV/AIDS literature predominantly treats monitoring as unproblematic. However, the social science of audit and indicators emphasises the constitutive power of indicators, noting that their effects at a grassroots level are often at odds with the goals specified in policy. This paper investigates users' experiences of Monitoring and Evaluation (M&E) systems in the context of HIV interventions in western India. Six focus groups (totalling 51 participants) were held with employees of 6 different NGOs working for government or philanthropy-funded HIV interventions for sex workers in western India. Ten donor employees were interviewed. Thematic analysis was conducted. NGO employees described a major gap between what they considered their “real work” and the indicators used to monitor it. They could explain the official purposes of M&E systems in terms of programme improvement and financial accountability. More cynically, they valued M&E experience on their CVs and the rhetorical role of data in demonstrating their achievements. They believed that inappropriate and unethical means were being used to meet targets, including incentives and coercion, and criticised indicators for being misleading and inflexible. Donor employees valued the role of M&E in programme improvement, financial accountability, and professionalising NGO-donor relationships. However, they were suspicious that NGOs might be falsifying data, criticised the insensitivity of indicators, and complained that data were under-used. For its users, M& E appears an ‘empty ritual’, enacted because donors require it, but not put to local use. In this context, monitoring is constituted as an instrument of performance management rather than as a means of rational programme improvement

Integrating Green Infrastructure Into Stormwater Policy: Reliability, Watershed Management, and Environmental Psychology as Holistic Tools for Success

As cities continue to expand, the issues of flood control and urban water quality have become major modern sustainability challenges. Green infrastructure—the use of nature-based solutions to target, treat, and store stormwater at its source—has emerged as a possible solution. While green infrastructure does offer multiple benefits for urban users, its performance is also highly variable. This Article addresses a key gap in existing literature by explicitly addressing how uncertainty in environmental and anthropogenic factors affects green infrastructure performance and integration within the Clean Water Act’s municipal separate storm sewer (MS4) regulatory program

When Managers Bypass Shareholder Approval of Board Appointments: Evidence from the Private Security Market

This paper investigates the influence of managerial entrenchment on private placements by examining the firm\u27s decision to appoint representatives of the private investors to the board without shareholder approval. By analyzing a sample of U.S. firms that appoint directors in combination with private offerings between 1995 and 2000, we find that firms with greater managerial entrenchment are more likely to bypass shareholder approval. Firms that bypass shareholders are less likely to appoint independent directors or to elect one of these directors as chairman. We also show that the market reacts more positively to the private offering announcement when the firm submits its board candidates for shareholder approval. Further, firms that bypass approval underperform compared to firms that obtain it. Overall our findings suggest that managers avoid shareholder approval to perpetuate entrenchment