Economies of scale of large-scale international development interventions: Evidence from self-help groups in India.

Livelihoods and microfinance programs for women often show reduced impacts after scale-up. Yet, program scale-up may reduce average per capita costs and maintain cost-effectiveness despite lower impact. This paper presents evidence on the association between program scale, costs, and cost-effectiveness by analyzing how the costs of a large-scale Self-Help Group (SHG) program in India changed from its inception in 2007 to its scale-up in 2019. We use expenditure data from program's audit statements of - the Bihar Rural Livelihoods Promotion Society - and find that a 1% increase in program membership was associated with a 0.6% increase in annual program expenditures, indicating large economies of scale. Predicted costs from regressions suggest that the annual per capita program expenditures declined from $29 when the program covered 100,000 members to $5 when it reached 10 million members. Previous impact evaluations of showed sizeable but smaller substitutions away from high-cost debt after scale-up than during the pilot, but we found that economies of scale led to similar cost-effectiveness ratios for this outcome. We also found that formation of higher-level federations is associated with lower marginal costs than setting up SHGs. However, previous evidence suggests that did not generate average impacts on women's agency and asset ownership after scale-up. Building on a rich history of research on , we argue that program implementers must identify key success factors in pilot programs to minimize tradeoffs between cost savings and potentially reduced impacts after scale-up. Further, we suggest investments in linking SHGs to federations to improve the cost-effectiveness of SHGs.