Broken Promises: Evaluating an Incomplete Start-Up Business Program

Abstract This study examines the socio-economic, behavioral, and psychological consequences of a terminated business loan program in South Sudan on intended beneficiaries. While all participants received business training, only some were able to obtain the promised loan before the program was canceled due to renewed conflict. The study combines data from face-to-face interviews and data from lab experiments to examine outcomes one year after the program’s cancellation. Results from local average treatment effect (LATE) estimations show that those participants who failed to receive the loan display significant declines in consumption. Moreover, this group exhibits a significant reduction in trust, particularly trust in institutions. These results highlight that more attention should be given to the detrimental effects of implementation failures.