By Peter Marchant, KF10 Azerbaijan

A new study led by University of British Columbia anthropologist Joseph Henrich found that active market participants tend to treat strangers more fairly. To the extent that Microfinance encourages market participation and supplants the need for top-down development models like direct aid, these results indicate that it may also encourage borrowers to adopt fairer attitudes towards those outside of their immediate social circle.

The results of the study (published in Science and entitled “Markets, Religion, Community Size, and the Evolution of Fairness and Punishment”), indicate that individuals in societies with high market integration tend to share more when there is no proximate reward for the sharer. Basically, they were kinder. Market participants were also more likely to pay to punish unfairness by others (monetarily, not corporeally). They were willing to give up personal gain to ensure that others played fairly.

Microfinance encourages market integration. The mere act of taking out a loan involves participation in a money market and many borrowers use their loans to access new markets for goods and services. A number of AqroInvest borrowers here in Azerbaijan use their loans to either begin or expand production for the market or to purchase goods from larger markets for sale in local ones. In other Kiva countries, where markets remain less developed and certain groups remain essentially self-sufficient, Microfinance offers even greater potential for increased market integration.

Traditional aid programs do not involve markets at all. In fact, the need to allocate scarce resources without a market probably exacerbates the insular and tribal thinking that has led to rampant corruption and diversion in so many aid projects.

When borrowers use their loans to begin or extend participation in a market, the study implies they may also increase their propensity for fairness towards strangers. So lend on Kiva today, help a borrower access a new market and spread some kindness as well.

Peter Marchant is a Kiva Fellow serving his first placement with AqroInvest in Azerbaijan. Click on Azerbaijan Borrowers for a list of Azeri borrowers currently on Kiva or check out Supporters of Azerbaijan to join the Azerbaijan lending group.


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