Development In The Midst Of Drought: Evaluating An Agricultural Extension And Credit Program In Nicaragua
This paper measures the impact of year one of the Millennium Challenge Corporation's Rural Business Development program for small rice farming households on the Pacific Coast of Nicaragua. The program was rolled out in the 2009-2010 agricultural year, which was the driest year on record in the region, likely due to an El Nino event. Estimated impacts show that the program at best had no effect, and at worst led to a 10 percent reduction in yields. These impacts are estimated using an econometric model which uses selection on observables as its identifying assumption, and robustness checks suggest that this is a reasonable approach in this case. Inference accounts for spatial correlation across households of the unobserved determinants of agricultural outcomes.