This dissertation empirically examines and compares the effects of the two types of microfinance liability structures on the political capital of post-conflict microfinance clients. The two types of microfinance liability structures are joint liability lending and individual liability lending. Under joint liability, small groups of borrowers are responsible for the repayment of each other's loans, while under individual liability, the individual borrowers are liable for their loan repayment. Political capital refers to actions undertaken by an individual to produce a favorable political outcome, and for the purpose of this study, is measured as voting or registering to vote in an election, the use of violence as a legitimate means for political change, and contacting one’s legislative representative.
Much of the post-conflict microfinance literature has focused on the analysis of the effect of joint liability microfinance on the social capital of clients, the collateral for joint liability microfinance, but has been more limited in regard to accounting for the effect of the microfinance liability structure on the political capital of clients receiving joint liability loans or clients receiving individual liability loans.
Using survey data from a quasi-experiment conducted among microfinance clients receiving loans under the two types of microfinance liability structures in Monrovia, the capital of Liberia, this dissertation uses a logistic regression framework to estimate and compare the effects of the two types of liability structures on the political capital of the clients receiving microfinance loans. Understanding this relationship will provide an insight into how microfinance contributes to peacebuilding at the micro, the meso, and the macro levels of post-conflict societies.