Discussion paper

DP12838 Dangers of a Double-Bottom Line: A Poverty Targeting Experiment Misses Both Targets

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 labelled 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. Our results help explain why corporate social responsibility efforts are often siloed from core operations.

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Citation

Karlan, D, A Osman and J Zinman (eds) (2018), “DP12838 Dangers of a Double-Bottom Line: A Poverty Targeting Experiment Misses Both Targets”, CEPR Press Discussion Paper No. 12838. https://new.cepr.org/publications/dp12838