Cooperation decays in bursts: a five-year field study of Sierra Leone group lending

A five-year field study of a Sierra Leone microfinance institution shows cooperation in joint-liability group lending declines in a punctuated, non-monotonic pattern: gradual decay within loan cycles followed by sharp rebounds after restarts, with each restart producing a larger immediate uptick but accelerating subsequent declines. The authors argue that behavioural mechanisms—drops in cooperative motivation and effort—drive this punctuated decline, not learning, strategic calculation, or reduced financial ability. Restarts resensitize borrowers temporarily, yet the overall trend is a long-term erosion of cooperation, implying that programmes relying on sustained cooperation should incorporate mechanisms like resets, automation, or motivation-enhancing strategies to counter behavioural decay.