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We conducted a randomized controlled trial with small and medium-sized enterprises in Kenya to estimate the causal impact of an e-payment technology on business finance. Using an encouragement design, we exogenously increased e-payment usage among a random subset of firms by relaxing adoption transaction costs and information barriers. Sixteen months after the intervention, we find that the e-payment technology increased access to mobile loans (in number of loans, as well as in the amount borrowed) by at least 50% (0.17 sd), likely due to the reduction of information asymmetries brought by an increase in digital transactions. We find no effect of the e-payment technology on sales and profits, but we do find a reduction of sales volatility and precautionary investment, especially for smaller firms. This suggests that mobile loans help smaller firms cope with short-term negative shocks. We provide a stylized model of business finance that rationalizes these findings.

Unsustainable land use is a key threat to both economic development and environmental conservation in developing countries. This study implemented a randomized controlled trial in arid Burkina Faso to test the effectiveness of financial incentives in stimulating the adoption of sustainable land management practices (SLMPs). It did so in the context of a so-called cascade training program, in which some farmers were trained in the implementation of sustainable land management practices, who were then asked to disseminate their newly acquired knowledge and expertise to other farmers in their social networks. The study finds that offering payments conditional on adoption improves both the transfer of information from the trained to the peer farmers, as well as the peer farmers' sustainable land management practices adoption rates. Offering financial incentives thus mitigates two of the most important barriers to the adoption of sustainable land management practices – the (perceived) lack of private benefits and insufficient diffusion of the technical implementation information from the trained farmers to their peers. Finally, the study documents that adoption of sustainable land management practices generates substantial increases in crop productivity and agricultural income already after one agricultural cycle.

Payments for environmental services are a nature conservation policy in which landowners receive financial compensation conditional on verified environmental service delivery. Contracts for payments for environmental services have been found to be effective in inducing conservation on private lands, but they may give rise to strong free-riding incentives when implemented on lands that are, de facto or de jure, commonly owned. This study implemented a randomized controlled trial in arid Burkina Faso to test the relative effectiveness of two collective payment for environmental services schemes in inducing forest conservation—a linear group payment scheme, in which group payments increase linearly with tree survival rates, and a threshold group payment scheme. The extant theory predicts that the latter incentive mechanism will (weakly) outperform the former. This paper develops a new theory that shows that the reverse may also hold—but only if the relationship between effort and tree survival rates is very uncertain. The findings show that threshold group payments increase intermediate measures of cooperation, but—consistent with Burkina Faso’s harsh conditions rendering tree survival quite stochastic—actual survival rates are higher with the linear group payments. The paper presents field experimental evidence as well as lab experimental results to explore the mechanisms giving rise to these results.