Do Incentives Matter for the Diffusion of Financial Knowledge? Experimental Evidence from Uganda

Abstract

Many development interventions involve training of beneficiaries, based on the assumption that knowledge and skills will spread ‘automatically’ among a wider target population. However, diffusion of knowledge or innovations can be slow and incomplete. We use a randomised field experiment in Uganda to assess the impact of providing incentives for knowledge diffusion, and pay trained individuals a fee if they share knowledge obtained during a financial literacy training. Our main results are that incentives increase knowledge sharing, and that it may be cost-effective to provide such incentives. We also document an absence of assortative matching in the social learning process.