Mark Walsh was in Pakistan planning to study how transaction fees and peer influence affected people’s decision to join one of the country’s two major mobile banking platforms when he noticed something interesting: the factors that went into a person’s decision about whether to share information about their experience with mobile banking in the first place.
It turns out that people weren’t that worried about transaction fees—they sent money rarely and the amounts were large enough that the fees were almost negligible. What they were concerned about, Walsh discovered on that 2022 trip, was how their friends and acquaintances would respond if they did make a recommendation. Generally, their fears were that they either would be blamed if the receiving person had a negative experience with the banking platform, or that the receiving person would take offense at the idea that they were uninformed enough to need a recommendation.
“This choice of communicating or not—it was interesting,” remembers Walsh, who is a PhD candidate in economics. “I thought, ‘Maybe this is what we should be studying.’”
Walsh, who received Graduate Student Research Funding from the Stanford King Center on Global Development for that initial trip, decided to study that question, and the results are in. In an experiment earlier this year involving 1,555 people in more than 50 villages in rural Pakistan, he tested how likely people were to pass on to fellow villagers two pamphlets: one that described the benefits of a mobile banking service; and another that described the risks, including fraud and scams. Overall, when people knew their identity would be hidden from the recipient, the number who passed on both pamphlets increased by 23 percent.
The implications of Walsh’s research are important in Pakistan, where, according to World Bank data included in Walsh’s draft paper, just 21 percent of adults own a financial account. In 2021, Pakistan’s government launched a mobile banking platform called the Asaan Mobile Account to try to improve financial inclusion in the country. Walsh’s pamphlets provided information about that service.
“I thought everyone would say, ‘I’ll give both pamphlets to my friend,’” he says of the experiment, which he conducted with Gallup Pakistan. “But they either gave no pamphlet or just one. That really piqued my interest.”
Walsh’s research in Pakistan adds to the theoretical literature on social learning models, or the study of how people learn from their peers. It also provides evidence that social concerns about offending someone or being blamed for a negative consequence can impact people’s thinking about whether to share information.
“People don’t share information even when they tell us that sharing the information would be beneficial,” he says. “That’s kind of fascinating. People are forgoing helping their friends because they are worried about being blamed.”
Walsh also found that villagers were more likely to share the pamphlet about the risks of mobile banking with people they didn’t know well when their choice of whom to share the pamphlet with would not be revealed (in other words, the recipient was told the sender wanted to share the information with “a fellow villager” and not them specifically).
Walsh says villagers’ sensitivity to these concerns is not surprising. Like other rural communities in low-income countries, the villages where Walsh conducted his experiment feature informal insurance systems in which neighbors provide financial assistance to each other in times of crisis. There are reputational—and therefore financial—risks involved in recommending a product that someone may experience negatively.
“When people have social concerns, they communicate in different ways to different people—it’s going to matter whom they are communicating to and what type of information it is,” Walsh explains. “They are worried about these things for good reason, and we need to account for those concerns in how we design interventions.”
Associate Professor Melanie Morten, one of Walsh’s advisors, says Walsh has “carried out an ambitious research project to study social concerns in Pakistan, focusing on an important technology: mobile banking.”
“His study helps understand whether social concerns about communicating about new technology might stop mobile banking from being as widespread as expected,” she says.
Walsh’s interest in development economics began when he traveled to the Solomon Islands during the summer after his freshman year at Stanford to work with a researcher studying community development funding mechanisms for the World Bank. He later worked at J-PAL with the Nobel Prize-winning economist Esther Duflo, including spending six months in Ghana studying the intergenerational effects of secondary school scholarships.
Walsh’s research in Pakistan doesn’t extend to policy solutions, but he does offer some suggestions. For instance, information that might be viewed as offensive could be shared in a group setting rather than one-on-one. And, to address the potential for blame, he says, regulators who are concerned about financial inclusion might aggressively prosecute scammers and prod mobile banking firms into reimbursing users for funds lost due to fraud.
“That might be something the government needs to regulate,” he adds.
Walsh says he has talked to government and private sector officials in Pakistan who are interested in ensuring people feel comfortable adopting mobile banking technologies.
“One of the huge expenditures for banks is advertising,” he says. “They are always looking at how many ad dollars they spend in order to get people to adopt a service. This information is helpful in understanding why some campaigns go viral. Different information creates different incentives.”
Walsh says the King Center’s support of his research has been instrumental. He came up with his original idea to investigate the impact of transaction fees in mobile banking while on lockdown during the pandemic. But once he began interviewing people in Pakistan on the 2022 trip he shifted his plans.
“That grant allowed me to go and talk to people and learn what was really important to them,” he says.
The King Center then supported a second trip to the country earlier this year. That funding allowed him to persist in his research despite a delay caused by massive protests surrounding the arrest of Pakistan’s former prime minister in May.
Walsh, who is scheduled to graduate in June 2024 and plans to look for an academic or policy position, says the community of scholars at the King Center has also been valuable. Former King Center faculty director Pascaline Dupas (who is now at Princeton) has been a mentor since he took a class with her as an undergraduate; he also regularly discusses his research with fellow King Center funding recipients Nina Buchmann, Anirudh Sankar, Andrés Felipe Rodríguez, and Alexandr Lenk, among others.
“It’s been very helpful for me to come into contact with so many other scholars working on development economics issues,” he says.