S7 Ep15: The rise of digital payments in Latin America

Between 2019 and 2023, the number of electronic transactions tripled in six Latin American economies. The share of adults using digital wallets, mobile money, and mobile bank accounts went from 3% in 2011 to 40% by 2021. A region that not long ago was defined by financial disasters, hyperinflation, and deep mistrust of banks has become one of the world's leading examples of how digital payments can transform an economy.Diego Vera-Cossio edited Beyond Cash, The Digital Payments Revolution in Latin America and the Caribbean, the Inter-American Development Bank's new regional microeconomic report on digital payments. He tells Tim Phillips how the effects of this revolution are more profound that freeing people from the need to carry cash. In Santiago, bus robberies fell when drivers stopped handling cash. In Brazil, firms in the most cash-intensive sectors grew substantially after the instant payment system Pix launched. In Colombia, people without any credit history started borrowing formally after being nudged to receive their social program payments digitally. And in Bolivia, where 80% of the workforce is informal, people are scanning QR codes at street market stalls. The question Diego, his colleagues, and policymakers int he region and beyond, are now trying to answer is how to build on all of that, and how to make it stick.The research behind this episode:Vera-Cossio, Diego A., ed. 2025. Beyond Cash: The Digital Payments Revolution in Latin America and the Caribbean. Latin American and Caribbean Microeconomic Report. Washington, D.C.: Inter-American Development Bank.To cite this episode:Phillips, Tim and Vera-Cossio, Diego A. 2026. "Beyond Cash: The Digital Payments Revolution in Latin America and the Caribbean." VoxDev Talk (podcast). Assign this as extra listening: the citation above is formatted and ready for a reading list or VLE.About Diego Vera-CossioDiego A. Vera-Cossio is a senior economist in the Research Department of the Inter-American Development Bank, where he works on social protection, financial inclusion, digital payments, and the design of public programmes in Latin America. He holds a PhD in Economics from the University of California, San Diego. Research cited in this episodeDominguez, Patricio. 2022. "Victim Incentives and Criminal Activity: Evidence from Bus Driver Robberies in Chile." Review of Economics and Statistics 104 (5). Exploits the reform that removed cash from Santiago buses to show that eliminating the cash target reduces robbery rates. The bus driver no longer carries anything worth taking.Vera-Cossio, Diego A., Bridget Hoffman, Camilo Pecha, and Carla Hernandez. 2024. "Does Adopting Digital Payment for Cash Transfers Improve the Financial Inclusion and Financial Well-Being of Low-Income Households?" IDB Research Insights. A randomised experiment in Colombia: unbanked beneficiaries of a social transfer programme were randomly encouraged to receive payments into digital wallets. Those who switched had fewer failed payment attempts, could check their balance without internet access via SIM, and were more likely to take out a formal loan for the first time.Inter-American Development Bank. 2024. Fintech Ecosystem in Latin America and the Caribbean Exceeds 3,000 Startups. Survey counts of fintech companies in Latin America and the Caribbean. Found roughly 700 fintechs in the region in 2017 and more than 3,000 by 2023, with 20% of them offering payment-related products.More VoxDev Talks on this topicMobile money in Ghana: Lessons for boosting financial inclusion: Tim Phillips speaks with Francis Annan about what the Ghanaian mobile money experience reveals about reducing fraud and misconduct in rural financial systems, and what that means for how mobile money can serve the very poor.Mobile money markets and financial inclusion in Africa: Nicola Limodio discusses what happened when mobile money operators in Africa were required to make their platforms interoperable, lowering fees but also reducing rural coverage. A direct parallel to the interoperability debate in Latin America.Related reading on VoxDevDigital financial services go a long way: Evidence from Mexico: evidence on how expanding digital payments and digital financial services affects spending, savings, and economic outcomes in a large middle-income country.The wide-ranging benefits of fostering financial inclusion in Mexico: on how policies that bring people into the formal financial system in Mexico produce benefits that extend well beyond the financial sector itself.VoxDevLit: Mobile Money: a curated literature review covering what research has established about mobile money, financial inclusion, and economic outcomes, useful for anyone who wants a broader picture of the evidence base behind the episode.

This is an episode from VoxDev's new podcast series, Ideas in Development. This series has a separate podcast feed, where you can find the entire AI series.Apple Podcasts: https://podcasts.apple.com/us/podcast/ideas-in-development/id1866874059Spotify: https://open.spotify.com/show/6sIdIKctE8frdWaz9iyfl2Everywhere else: https://audioboom.com/channels/5165629-ideas-in-developmentYouTube: https://www.youtube.com/playlist?list=PLcqy-QRDq-vD3YJ2t1rMUwx8BN1WTEA9ASubstack: https://ideasindevelopment.substack.com/In this episode, Josh Lerner joined Oliver Hanney and Deena Mousa to discuss how technology diffuses around the world, touching on the role of venture capital, universities and China.We then cover what this means for the diffusion of AI, and what can be done to speed up diffusion.

For 70 years, a simple idea has shaped efforts to reduce prejudice: put people from different groups together under the right conditions, and contact reduces prejudice. Gordon Allport proposed it in 1954. A landmark 2006 meta-analysis of 515 studies seemed to confirm it, reporting an average effect of 0.4 standard deviations on prejudice measures. That paper has been cited more than 14,000 times. The credibility revolution has undermined this evidence, by correcting for publication bias that meant null results were seldom published. Matt Lowe of the Vancouver School of Economics has published a new review of 41 pre-registered studies, and he finds the average effect is one-tenth of a standard deviation. Those 41 pre-registered intergroup contact experiments cover nearly 40,000 participants across a wide range of countries, roughly half of them in the Global South. He tells Tim Phillips that the effects are real, consistently positive … but consistently small. Contact interventions are a waste of time. Costs can be low, and the alternatives have not yet been held to the same rigorous standard. But the gap between what the old literature promised and what careful experiments deliver is large enough to matter for anyone designing programmes to reduce prejudice between groups.The research behind this episode:Lowe, Matt. 2025. "Has Intergroup Contact Delivered?" Annual Review of Economics 17.To cite this episode:Phillips, Tim. 2026. "Has Intergroup Contact Delivered?" VoxDev Talk (podcast). Assign this as extra listening: the citation above is formatted and ready for a reading list or VLE.About Matt LoweMatt Lowe is an assistant professor at the Vancouver School of Economics at the University of British Columbia, a CIFAR Azrieli Global Scholar, and a J-PAL faculty affiliate whose research spans intergroup relations, development, and political economy. His website is at mattjlowe.github.io. He has previously been published in VoxDev discussing his field experiment on collaborative and adversarial caste integration through cricket leagues in India.Research cited in this episodeAllport, Gordon W. 1954. The Nature of Prejudice. Addison-Wesley. The founding text of intergroup contact theory, which proposed that contact between groups reduces prejudice when it meets four conditions: equal status, common goals, intergroup cooperation, and support from authorities.Pettigrew, Thomas F., and Linda R. Tropp. 2006. "A Meta-Analytic Test of Intergroup Contact Theory." Journal of Personality and Social Psychology 90 (5). The 515-study meta-analysis that established the 0.4 standard deviation benchmark for contact effects and became the dominant reference point for the field.Paluck, Elizabeth Levy, Roni Porat, Chelsey S. Clark, and Donald P. Green. 2021. "Prejudice Reduction: Progress and Challenges." Annual Review of Psychology 72. A review of 418 experiments on prejudice reduction from 2007 to 2019, identifying troubling signs of publication bias and finding that most studies evaluate light-touch, small-scale interventions with uncertain long-term effects.Scacco, Alexandra, and Shana S. Warren. 2018. "Can Social Contact Reduce Prejudice and Discrimination? Evidence from a Field Experiment in Nigeria." American Political Science Review 112 (3). A randomised field experiment mixing Christian and Muslim young men in a vocational training programme in Kaduna, Nigeria. Contact reduced discriminatory behaviour but did not change attitudes.Mousa, Salma. 2020. "Building Social Cohesion between Christians and Muslims through Soccer in Post-ISIS Iraq." Science 369 (6505). Randomly assigned Iraqi Christian displaced persons to football teams with Muslim teammates. Effects were positive on behaviours within the intervention but did not generalise to interactions with Muslim strangers outside it.Chakraborty, Anujit, Arkadev Ghosh, Matt Lowe, and Gareth Nellis. 2024. "Learning About Outgroups: The Impact of Broad Versus Deep Interactions." SSRN Working Paper. A field experiment in India finding that broad contact (meeting many different outgroup members) corrects misperceptions about outgroups, while deep contact (sustained interaction with one person) builds social and economic ties. Neither type generalises fully to the wider outgroup.Lowe, Matt. 2021. "Types of Contact: A Field Experiment on Collaborative and Adversarial Caste Integration." American Economic Review 111 (6). Randomly assigned Indian men from different castes to cricket teams or control groups, finding that collaborative contact increased cross-caste friendships and efficiency in trade while adversarial contact reduced them.More VoxDev Talks on this topicPromoting national integration in Nigeria: Tim Phillips talks to Oyebola Okunogbe about her research on the Nigerian National Youth Service Corps, which posts university graduates to states other than their own to promote national integration through intergroup contact.Peacemaking, peacebuilding and post-war reconstruction: Salma Mousa and Lisa Hultman discuss what the evidence shows about building peace and social cohesion after conflict, including which interventions hold up and which do not.Building social cohesion in ethnically mixed schools: an intervention in Turkey: Sule Alan discusses a programme designed to build cohesion between children from different ethnic backgrounds in Turkish schools, with effects on peer violence, reciprocity, and interethnic friendships.Related reading on VoxDevHow competition between villages helped divided communities in Indonesia: in ethnically diverse or divided settings, shared efforts towards a collective external goal can help bridge internal divides and build a shared identity.Reducing prejudice towards forced migrants through perspective taking: evidence on how perspective-taking interventions affect attitudes towards refugees and displaced populations.How a documentary film fostered interethnic harmony in Bangladesh: a media-based approach to reducing intergroup prejudice, examining what content and delivery can shift attitudes at scale.

In cities across low- and middle-income countries, traffic crawls 24 hours a day. In Dhaka during rush hour, speeds average around 15km/h. At three in the morning, when the roads are empty, they average about 20km/h. Urban transport in the developing world is not only slow because of congestion. And so congestion policy, Adam Storeygard of Tufts University argues, gets you a small fraction of the way to solving the problems of urban transport in LMICs.That counterintuitive finding is one many themes in Storeygard's wide-ranging review of what research actually tells us about how people in LMICs get from A to B. From informal minibuses to bus rapid transit, from a field experiment in Bangalore that tested congestion pricing to the long shadow of colonial railroads still shaping African trade today, the picture that emerges is more nuanced and more interesting than many policy blueprints suggest. He tells Tim Phillips what the evidence supports, where it runs out, and why fixing the roads won’t fix everything.The research behind this episode:Storeygard, Adam. 2025. "Transport in Low- and Middle-Income Countries." NBER Working Paper 34354. Forthcoming in a special issue of Regional Science and Urban Economics.To cite this episode:Phillips, Tim. 2026. "Transport in Low- and Middle-Income Countries." VoxDev Talk (podcast). Assign this as extra listening: the citation above is formatted and ready for a reading list or VLE.About Adam StoreygardAdam Storeygard is Professor of Economics at Tufts University, where his research focuses on urbanisation, transportation, and the economic geography of the developing world, in particular sub-Saharan Africa. Much of his work uses geographic and satellite data to study how infrastructure shapes where people live, how they move, and how economies develop.Research cited in this episodeAkbar, Prottoy Aman, Victor Couture, Gilles Duranton, and Adam Storeygard. 2023. "The Fast, the Slow, and the Congested: Urban Transportation in Rich and Poor Countries." NBER Working Paper 31642. The paper behind the Dhaka finding: assembling travel speed data across 1,200 cities in 152 countries, the authors show that cities in poor countries are roughly half as fast as those in rich countries, and that most of the gap is not congestion but structural low speeds in the absence of traffic.Björkegren, Daniel, Alice Duhaut, Geetika Nagpal, and Nick Tsivanidis. 2025. "Public and Private Transit: Evidence from Lagos." Working paper. When Lagos introduced a major new public bus system, informal drivers on affected routes left,  so bus frequency on those routes fell on net. The big benefit accrued to other routes that informal drivers switched to, where prices and waiting times fell. Winners and losers, not a clean gain.Franklin, Simon. 2018. "Location, Search Costs and Youth Unemployment: Experimental Evidence from Transport Subsidies." Economic Journal 128 (614). A randomised trial in Addis Ababa: providing transport subsidies to unemployed young people helped them search for and find formal jobs. Effects did not persist once subsidies ended, raising questions about how much the transport constraint itself was the binding one.Borker, Girija. 2021. "Safety First: Perceived Risk of Street Harassment and Educational Choices of Women." World Bank Policy Research Working Paper 9731. Women in Delhi attend less selective colleges than male peers with identical academic credentials, not because they are not admitted, but because of perceived harassment risk during the commute. Delhi university students overwhelmingly live with their parents, and the daily journey matters as much as the institution.Kreindler, Gabriel. 2024. "Peak-Hour Road Congestion Pricing: Experimental Evidence and Equilibrium Implications." Econometrica 92 (4). A field experiment in Bangalore, paying drivers to avoid congested areas and times. The finding: congestion pricing would produce only modest benefits in Bangalore because traffic density has a relatively moderate impact on speed there, meaning you would have to charge astronomically high prices to shift behaviour significantly.Jedwab, Remi, and Adam Storeygard. 2022. "The Average and Heterogeneous Effects of Transportation Investments: Evidence from Sub-Saharan Africa 1960–2010." Journal of the European Economic Association 20 (1). Shows how transportation infrastructure investments, including the legacy of colonial railroads built primarily to connect mines to ports, continue to shape where Africans live and how countries trade, with consequences that push African economies toward overseas rather than intra-regional commerce.More VoxDev Talks on this topicMichelson, Hope, 2026, “African agriculture's underappreciated supply side.” VoxDev Talk. How transport links are one of the many impediments that stop rural farmers from making the most of the opportunities of better agricultural inputs.Related reading on VoxDev"Urban transport infrastructure in developing countries”, the VoxDevLit review of research on urban transport in LMICs, covering buses, BRT, subways, and informal transit networks."Who wins when public transit challenges private transit?”, the Lagos bus reform discussed in this episode, with further detail on how informal drivers responded to new public routes."Perceived risk of street harassment and college choice of women in Delhi”, Girija Borker's research on how commute safety shapes women's educational choices, as discussed by Storeygard in this episode."The equitable benefits of Colombia's bus rapid transit system”, complements the discussion of BRT in Bogota, one of Storeygard's three best-evidenced cases for BRT benefits.

Particulate matter is, Michael Greenstone argues, the greatest public health threat on the planet. Worse than HIV, cigarettes, and alcohol. The average person  loses about two years of life expectancy to it. In India, the figure is three and a half years. The solution to this problem has been tested, and it works, at least in high-income countries.Greenstone and his co-authors ran a randomised controlled trial in Surat, Gujarat: from 300 industrial plants, mostly making textiles, all burning coal, half were randomly assigned to a market where pollution permits could be bought and sold. The results: in the market, pollution fell 25%, compliance was near-perfect, and abatement costs dropped 12%. The cost-benefit ratio is as high as 200 to one. Many plants in the control group asked to be moved into the market.The research behind this episode:Greenstone, Michael, Rohini Pande, Nicholas Ryan, and Anant Sudarshan. 2025. "Can Pollution Markets Work in Developing Countries? Experimental Evidence from India." Quarterly Journal of Economics 140 (2): 1003–1060. An ungated version is available as BFI Working Paper 2025-53.To cite this episode:Phillips, Tim. 2025. "Can Pollution Markets Work in Developing Countries?" VoxDev Talk (podcast).  Assign this as extra listening: the citation above is formatted and ready for a reading list or VLE.About Michael GreenstoneMichael Greenstone is the Milton Friedman Distinguished Service Professor in Economics at the University of Chicago, where he is the founding Director of the Energy Policy Institute at Chicago (EPIC) and the Institute for Climate and Sustainable Growth. His research focuses on the costs and benefits of environmental quality, including the Air Quality Life Index, which tracks the toll of particulate pollution country by country. He previously served as Chief Economist for the President's Council of Economic Advisers under President Obama. Research cited in this episodeAir Quality Life Index (AQLI), Energy Policy Institute at Chicago. The source of the life-expectancy statistics used in this episode: particulate pollution costs the average person on Earth roughly two years of life expectancy, with India averaging three and a half years. The index tracks this burden country by country, city by city.The US sulphur dioxide cap-and-trade programme, established under the 1990 Clean Air Act Amendments, was the canonical precedent Greenstone cited: a market that dramatically reduced acid rain in the eastern United States at costs far below pre-programme projections. He noted that the UK and EU have since built comparable CO2 markets. All have worked well. The question this experiment addressed was whether the same logic held in the developing world, where almost all the pollution now is.Emissions Market Accelerator. An independent scale-up organisation founded by Greenstone and colleagues to replicate the Gujarat model beyond the original research setting. Current pipeline: a statewide sulphur dioxide market for Maharashtra (including large power plants, not just textiles), and advanced conversations in Pakistan and Brazil. Within Gujarat, a water pollution market is also in development.More VoxDev Talks on this topicRegulating pollution in low- and middle-income countries Rohini Pande and Nicholas Ryan, two co-authors of the paper discussed in this episode, on the political economy of pollution regulation in developing countries: why enforcement is hard, and what makes it work.Air pollution and infant mortality Jennifer Burney on the health costs of particulate air pollution for young children, and what the evidence from Saharan dust patterns across Sub-Saharan Africa reveals about exposure and mortality.The Social Cost of Carbon Michael Greenstone's earlier VoxDev Talk, on how assigning a monetary value to carbon emissions can drive better policy decisions and make the case for action that regulation alone struggles to make.Related reading on VoxDevReducing air pollution: Evidence from payments to reduce crop burning in India How cash payments to farmers in northern India changed behaviour and cut the seasonal haze from crop fires that pushes Delhi's air quality to its worst each winter.Paying to pollute: How carbon offsets actually raised emissions in China A cautionary study on market-based pollution controls: when incentives point the wrong way, a market can make things worse rather than better.The effect of pollution on worker productivity: Evidence from call-centre workers in China Air pollution reduces cognitive performance and output, adding an economic productivity argument to the health case for cleaning the air.

A small number of Asian countries have provided thousands of high-skilled migrants to the US, many of whom have gone on to great success. What created this long-term trend, and what has it contributed to the US economy? And with changes in domestic policy, technology, and the opportunities in other countries, will it continue? Gaurav Khanna of UC San Diego tells Tim Phillips the story of high-skilled migration to the US and warns of the consequences for the US economy if, in the future, they decide to go elsewhere – or stay at home.

With the number of global refugees continuing to rise, integrating refugees has become a difficult challenge for hosts – and it is far from easy for the refugees themselves. Dany Bahar of Brown University and Giovanni Peri of UC Davis tell Tim Phillips about a new review of the evidence that evaluates what policies have worked. 

In this episode of Ideas in Development, we ask what needs to happen before AI can take off in Africa.Rose Mutiso talks us through the current state of energy and digital infrastructure in Africa, why leapfrogging is not guaranteed with AI, and what fundamental bottlenecks need to be addressed.Read the full show notes: https://voxdev.org/topic/technology-innovation/ai-africa-barriers-opportunities-and-policy

Almost everywhere, women have less economic power than men, and earn less at work. Their commitment to childcare and work in the home gives them less spare time than men, as well as less recognition for the value of what they do. In another episodes based on the new book The London Consensus, published by LSE Press, Barbara Petrongolo of the University of Oxford, who one of the authors of the book’s chapter on Labour markets and gender inequality, and Ashwini Deshpande of Ashoka University, who wrote a response discuss with Tim Phillips whether there is a consensus on policy – and way to implement it – in this area. Download The London Consensus. https://www.lse.ac.uk/school-of-public-policy/research/london-consensus

Agricultural yields across sub-Saharan Africa are falling. We can create better seeds, fertilisers and insecticides which has the potential to increase agricultural yields. But what stops that potential being realised? We put a lot of attention on how to influence the behaviour or the choices of farmers, but what can policy also do to help the firms, large and small, that provide the inputs that farmers use? Hope Michelson of the University of Illinois is one of the authors of a new review of agricultural input markets. She tells Tim Phillips about the important gaps in our knowledge of how those markets are working.