Problem
1. Contrary to what theory suggests, a number of microfinance institutions have moved to individual lending schemes in recent years. Giné and Karlan (2007) examine how this shift has affected repayment rates in the Philippines. Enumerate the main challenges they may have faced when designing their experiment, and propose solutions.
2. One of the most important criticisms of randomized control trials is the relative weakness of their external validity. Explain this problem and why is it is relevant. What can researchers do to correct or work around it?