Beyond the Pitch Deck: Truths About VC
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In-person: Stanford Graduate School Business - C105 (655 Knight Way, Stanford)
Online: Via Zoom
Better financial contracts can unlock business growth in Kenya
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Supply chains can be surprisingly complex. In many low- and middle-income settings, large companies often rely on networks of small, independent distributors who travel by foot to sell consumer goods to otherwise hard-to-reach customers (Kruijff et al. 2024). These ‘micro-distributors’ operate at the far edge of the supply chain, with no formal employment contracts, thin profit margins, and high levels of economic risk.
In a field experiment in Kenya, we partnered with one of the world’s largest food manufacturers (pseudonymously “FoodCo”) to evaluate whether investment-appropriate financing contracts could help their independent distributors improve their business performance. We found that tailoring repayment terms to better share risk and rewards—compared to a standard, rigid debt contract—significantly boosted distributors’ profits. Crucially, these more flexible contracts took advantage of detailed administrative data on monthly performance. These findings underscore the promise of improved observability enabled by digitisation: with richer data, financial contracts can be designed to incorporate greater risk-sharing (Fischer 2013, Meki 2024), potentially opening new opportunities for mutually beneficial investments.
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Flexible financing for ‘last-mile’ distributors boosted profits across a food supply chain in Kenya.
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VoxDev
Financial market exposure increases generalized trust
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How can we build trust, especially in polarized societies? We propose that exposure to broad financial markets—where individuals place their assets in the hands of large groups of unfamiliar agents who nonetheless have the incentive and ability to promote their interests—can contribute to generalized trust. In a randomized controlled trial, we encourage Israelis to hold or trade stocks for up to seven weeks. We find that participation in financial markets increases the probability of expressing generalized trust by about 6 percentage points, equivalent to a quarter of the control group mean. The effects seem to be driven by political partisans along the left–right spectrum in Israel, and are robust to negative price changes. Thus, trust is not only a cause but can also be an effect of participation in financial markets.
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Journal of Public Economics
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February 2025, 105303
Global Capitalism, Trust and Accountability Conference
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The Program on Capitalism and Democracy
presents a two-day conference
Co-sponsored by the Stanford Graduate School of Business (GSB) and the Center on Democracy, Development and the Rule of Law (CDDRL)
Are democratic governments equipped and willing to hold global capital accountable, and does their failure to do so affect citizens’ trust?
Global capitalism has reshaped trade, economic priorities, and financial flows — and, in doing so, has also transformed societies and politics. However, the transnational nature of global capital has presented an intellectual and policy challenge as corporate activities and corruption adapt to the global environment. While activists, journalists, and scholars have investigated and publicized these issues, much work remains to develop coherent analytical understandings of these problems.
Democratic governments often struggle to establish and enforce proper rules for corporate malfeasance and corruption. Domestic regulations present jurisdictional challenges, and corporate law, which enables corporations, has yet to be effective in preventing them and their leaders from dodging accountability in global markets. The world of global capital is opaque, designed explicitly to hide assets or evade the reach of governments. The financialization of the global economy has expanded the power not only of banks but also of professional services that facilitate ties between wealthy individuals, political leaders, and tax havens or shelters.
This conference brings together scholars across the disciplines of law, business, social sciences, and history, as well as practitioners and journalists, to explore the challenge of creating trust and accountability in a system dominated by global capitalism. In convening together, we aim to advance research, education, and policy on these critical issues.
Organizers
Anat Admati (George G.C. Parker Professor of Finance and Economics, GSB, and Faculty Director of the Capitalism and Democracy Program at CDDRL) and Didi Kuo (Center Fellow, CDDRL)
FRIDAY, APRIL 4
1:30 - 1:45 — Introduction and Opening Remarks
- Anat Admati, George G.C. Parker Professor of Finance and Economics, Stanford Graduate School of Business
- Didi Kuo, Center Fellow, Freeman Spogli Institute for International Studies
- Kathryn Stoner, Mosbacher Director, Center on Democracy, Development and the Rule of Law
- Peter DeMarzo, Philip H. Knight Professor and Dean of the Graduate School of Business (Interim)
1:45 - 3:15 pm Session 1 — Why Trustworthy Governments are Essential
Global capitalism works best for society if governments can be trusted to provide public goods and set and enforce proper rules to enable markets and corporations to succeed while protecting human rights and the environment. This panel examines the historical development of capitalism and explores what it takes for governments to earn the trust needed. It also reflects on how global capitalism today may enable corruption and undermine trust in democratic governments.
Panelists:
- Vic Khanna (Michigan Law)
- Naomi Lamoreaux (Yale History)
- Alexander Cooley (Barnard Political Science)
Discussant: Rick Messick (Global Anticorruption Blog)
Moderator: Curtis Milhaupt (Stanford Law)
3:15 - 3:45 — Break
3:45 - 5:15 pm — Session 2: Opacity and Illicit Flows
The financialization and globalization of capital have increased opportunities for illicit financial flows, money laundering, and corruption. How should scholars conceptualize and measure these problems and the harm they cause? What is the role of anonymous and multinational corporations and secrecy jurisdictions in facilitating, exacerbating, and growing opportunities to evade laws? What is the role of cryptocurrencies?
Panelists:
- Dan Neilson (UT Austin Political Science)
- Gary Kalman (Transparency International US)
- Brooke Harrington (Dartmouth Sociology)
Discussant: Mark Weidemaier (UNC Law)
Moderator: Louise Story (journalist, author, media leader)
5:30 - 6:30 pm — Virtual Keynote
Tom Wright
Co-author of the New York Times bestseller, 'Billion Dollar Whale;' Wall Street Journal's Asia Economics Editor (2013 - 2019); and Co-Founder of Project Brazen, the production studio that launched the hit podcast, 'Fat Leonard.'
6:30 — Reception and Dinner
SATURDAY, APRIL 5
8:00 - 8:30 am — Breakfast
8:30 - 9:15 am — Keynote
Judge Jed Rakoff
Senior Judge of the United States District Court for the Southern District of New York since 2010
9:15 - 10:45 am — Session 3: The Law and Politics of Fighting Corruption
Can governments and global institutions address corruption, defined as the abuse of power in its many forms, within and across jurisdictions through laws? This panel examines the mechanisms and tools that are available to prosecutors and policymakers to investigate and penalize corruption in the private sector and government. It also explores the political challenge of ensuring that the legal tools are available and utilized properly to reduce corruption.
Panelists:
- Kevin Davis (NYU Law)
- Gerhard Schick (co-founder and co-head of Finanzwende Recherche)
- John Githongo (Anti-corruption activist)
Discussant: Vikrant Vig (GSB)
Moderator: Luigi Zingales (Chicago)
10:45 - 11:15 am — Break
11:15 am -12:45 pm — Session 4: Greed, Norms, Culture, and Trust
Norms and culture, both in corporations, in government bodies, and in society at large, play a significant role in promoting trust and preventing misconduct. Global capitalism reflects norms, but it also reshapes them. This panel investigates the challenges that arise in building cultural norms in a global context.
Panelists:
- Norman Eisen (Brookings)
- Peter Solmssen (Former Managing Board Member and General Counsel Siemens AG)
- Miriam Baer (Brooklyn Law)
Discussant: Paola Sapienza (Hoover Institution)
Moderator: Didi Kuo (CDDRL)
12:45 - 1:45 pm Lunch
1:45 - 3:15 pm — Session 5: Corporate Misconduct and the Law
What are the tools for deterring corporate misconduct, and are these tools being used effectively? This panel of experts on white-collar crime will explain why laws and enforcement mechanisms may fail to deter corporate misconduct and why corporate leaders are rarely appropriately held accountable. What is the interplay of institutions, politics, and power that undermines the rule of law in the corporate context?
Panelists:
- Ellen S. Podgor (Stetson Law School)
- Elizabeth Pollman (Penn Law School)
- Fabio De Pasquale (Prosecutor, Milan Italy)
Discussant: Jennifer Taub (Wayne Law School)
Moderator: Anat Admati (GSB)
3:15 -3:45 pm — Break
3:45 -5:15 pm — Session 6 (Round Table): What Academics, Activists, and the Media Can Do
This roundtable will enable all participants to brainstorm how academics, activists, and journalists can work together to accomplish shared goals around global capitalism and accountability. How are each sector's resources, voices, and contributions best deployed? How might individuals and organizations align their work and objectives? And most importantly, how might we create a more trustworthy and fair economic system for the 21st century?
Moderator: Bethany McLean (Journalist, author)
5:15 - 5:30 pm — Closing Remarks
5:30 pm — Closing Reception
Virtual: Open to the public
Conferences
Demand for Commitment in Credit and Saving Contracts: A Field Experiment
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We conduct a field experiment in which we offer credit and saving contracts to the same pool of Pakistani microfinance clients. Additional treatments test ex-ante demand for soft commitment (in the form of reminders, either to respondents or to their families), hard commitment (in the form of a penalty for missing an installment), and flexibility (an option to postpone an installment) to save or pay loan installments on time. We find substantial demand for fixed repayment contracts in both the credit and savings domains in ways that imply that respondents value the commitment required. While we find little or no average demand for additional contractual features, we nonetheless observe that different combinations of contractual add-ons are preferred depending on the respondent’s level of financial discipline. Respondents with high financial discipline prefer flexibility in credit contracts when combined with reminders to self, while those with low discipline value penalties in savings contracts only when paired with reminders. Our results imply that, for the average microfinance client, demand for commitment is met through the regular payment schedule built into standard microcredit or commitment savings contracts. However, combining penalties or flexibility with reminders may appeal to certain subsets of clients.
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The Economic Journal
Number
Issue 664
Katherine Casey
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kecasey@stanford.edu
Professor of Political Economy, Stanford GSB
Faculty Director, Stanford King Center on Global Development
Katherine Casey is Professor of Political Economy at the Stanford Graduate School of Business and the Faculty Director of the King Center on Global Development. Her research explores the interactions between economic and political forces in developing countries, with particular interest in the role of information in enhancing political accountability and the influence of foreign aid on economic development. Her work has appeared in the American Economic Review, Journal of Political Economy, and Quarterly Journal of Economics, among others.
CDDRL Affiliated Faculty
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Eugene Kandel — Making Israel Viable Again: Rethinking Israeli Economics, Governance, and Society
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As Head of Israel’s National Economic Council between 2009 and 2015 Professor Eugene Kandel possessed a unique insider’s view into the fundamental structure of the Israeli economy and the most powerful trends shaping its society and politics. By 2023 Kandel was so alarmed by what he observed happening to those fundamentals that he warned of the collapse of the Israeli economy (and with it the state) if Israel did not fundamentally rethink its social contract and governance structure.
ABOUT THE SPEAKER
Professor Eugene Kandel is the founder and chairman of RISE Israel Institute, the Emil Spyer Professor of Economics and Finance at the Hebrew University of Jerusalem, and the chairman of the Tel Aviv Stock Exchange. From 2009 to 2015 he served as Head of the National Economic Council and Economic Adviser to the Prime Minister of Israel, advancing significant economic policies and reforms.
Virtual Event Only.
Amichai Magen
Virtual Only Event.
Eugene Kandel
Seminars
Democracy Dilemma: Business Leadership in an Era of Rising Autocracies
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In an era of rising autocracy, Bill Browder, the bestselling author of Red Notice and Freezing Order, brings his unparalleled expertise to the forefront. Join the Program on Capitalism and Democracy for a discussion on how business leaders can safeguard democratic principles while navigating increasingly challenging political landscapes.
Browder's firsthand experiences combating corruption in Russia and beyond offer valuable lessons for today's global business environment. His story exemplifies how business leaders can leverage their influence to shape policy, champion justice, and uphold democratic ideals—even when confronted with grave personal and professional risks.
This event is co-sponsored by the Corporations and Society Initiative (CASI) at the Graduate School of Business and the Program on Capitalism and Democracy at the Center on Democracy, Development and the Rule of Law (CDDRL).
ABOUT THE SPEAKER
Sir William (Bill) Browder KCMG was once the largest foreign portfolio investor in Russia until being declared “a threat to national security” in 2005 for exposing corruption in Russian state-owned companies.
In 2008, Bill’s lawyer, Sergei Magnitsky, uncovered a massive fraud committed by Russian government officials stealing US $230 million of state taxes and was subsequently arrested, imprisoned without trial, and systematically tortured.
Sergei Magnitsky died in prison on November 16, 2009. Ever since, Sir William has led the Global Magnitsky Campaign for governments around the world to impose targeted visa bans and asset freezes on human rights abusers and highly corrupt officials, introducing the passage of the Sergei Magnitsky Accountability Act in 2012, & the Global Magnitsky Human Rights Accountability Act 2016. Which has since been adopted by 11 countries, including the U.S., UK, Canada, and New Zealand.
For his exceptional service to the UK abroad and internationally, in recognition of his significant and sustained contribution to human rights and anti-corruption, he was appointed by King Charles in the 2024 Birthday Honours List a Knight Commander of the Order of St Michael and St George (KCMG).
Rachel Hersh, MBA '25
In-person: GSB Knight Management Center, C102 (657 Jane Stanford Way, Stanford)
Online: Via Zoom
Bill Browder
Lectures
Valentin Bolotnyy Named to California Governor’s Council of Economic Advisors
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Bolotnyy, an economist, affiliated scholar with CDDRL's Deliberative Democracy Lab, and Kleinheinz Fellow at the Hoover Institution, has joined California governor Gavin Newsom’s Council of Economic Advisors. His appointment became effective on August 22, 2024.
Trading stocks builds financial confidence and compresses the gender gap
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Many studies document low rates of financial literacy and suboptimal levels of participation in financial markets. These issues are particularly acute among women. Does this reflect a self-reinforcing trap? If so, can a nudge to participate in financial markets generate knowledge, confidence, and further increase informed participation? We conduct a large field experiment that enables and incentivizes working-age men and women—a challenging group to reach with standard financial training programs—to trade stocks for four to seven weeks. We provide no additional educational content. We find that trading significantly improves financial confidence, as reflected in stock market participation, objective and subjective measures of financial knowledge, and risk tolerance. These effects are especially strong among women. Participants also become more self-reliant and consult others less when making financial decisions.
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The Economic Journal