Ombudsman schemes in the United Kingdom's financial sector: The insurance ombudsman,the banking ombudsman,and the building societies ombudsman

The problems facing consumers in pursuing complaints against suppliers through the courts are well known and have given rise to the development of alternative strategies. This paper considers the development and use of one such strategy — the ombudsman — in dealing with the complaints of consumers against insurers, banks and building societies. The decisions to create these schemes can be seen against a background of the radical changes in the financial markets during the 1980s. However, the practice of the different ombudsmen is also influenced by the history, rules, practices and commercial contexts of their respective industries. It is argued, for instance, that the ombudsmen have developed standards of fairness which enable them to step outside established law and practice. However, the extent to which each is willing to do this may depend on the history and legal context of the relationships which a particular sector has had with its customers.

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Ombudsmann-Regelungen im Finanzsektor Grobritanniens: Die Ombudspersonen für Versicherungen, für Banken und für Wohnbaugenossenschaften

Zusammenfassung Die Schwierigkeiten, die Konsumenten haben, wenn sie Beschwerden gegen Anbieter auf gerichtlichem Wege klären lassen wollen, sind gut bekannt und waren Anla\ für die Entwicklung alternativer Strategien. Der Beitrag behandelt eine dieser Alternativen — den Ombudsmann — bei der Behandlung von Verbraucherbeschwerden gegenüber Versicherern, Banken und Wohnbaugenossen-schaften. Die Entscheidungen, die zur Schaffung dieser Regelung geführt haben, sind vor allem vor dem Hintergrund der starken Veränderungen auf den Finanzmärkten in den 80er Jahren zu sehen. Dabei wird das praktische Vorgehen der Ombudspersonen von der Entstehungsgeschichte, von Gewohnheiten und Praktiken und vom wirtschaftlichen Zusammenhang ihrer jeweiligen Branche beeinflu\t. So haben die Ombudspersonen zum Beispiel Richtlinien für Fairne\ entwickelt, die ihnen auch Möglichkeiten au\erhalb der etablierten Bereiche des Rechts und der Praxis eröffnen. Allerdings hängt die Bereitschaft des einzelnen Ombudsmannes, solche Möglichkeiten zu ergreifen, von der Geschichte und dem rechtlichen Kontext der Beziehungen ab, die seine Branche mit ihren Kunden gehabt hat.

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The authors would like to thank VW-Stiftung which funded the project, of which an earlier version of this study formed a part: Southern Extension of the EC, Financial Services and Consumer Protection; as well as Magda D'Ingeo and Katrina Wilson, both of Brunel University.     

Domestic Violence and Child Mortality in the Developing World

We examine the effect of domestic violence on child mortality using Demographic and Health Surveys from thirty-two developing countries. We first examine conditional associations between violence faced by the mother and child mortality after controlling for observable confounders. Children of (ever) physically victimized mothers are 0.4, 0.7, and 1.0 pp more likely to die within thirty days, a year, and five years of being born. We find similar associations when examining violence experienced in the last twelve months, although these are no longer statistically significant. The association is statistically significant, and larger, if the mother experiences violence in the last twelve months often, rather than sometimes. Violence is significantly associated with pregnancy loss, suggesting the true effect on mortality is larger than estimates based on live-births would suggest. We investigate robustness of associations to omitted variable bias, assessing the role of selection on unobservables to estimate lower bounds on the true effect. These continue to indicate economically meaningful positive effects, suggesting selection on unobservables would need to be 2.4–3 times that of selection on observables to nullify the estimated effect. We provide evidence that maternal smoking and breastfeeding practices are mediators in the relationship between domestic violence and child mortality.     

USING RANDOMIZED CONTROL DESIGNS IN EVALUATING SOCIAL SECTOR PROGRAMS IN DEVELOPING COUNTRIES

Seven case studies—from Bolivia, Colombia, Indonesia,Mexico, Nicaragua, Taiwan (China), and Turkey—demonstratethe feasibility of conducting rigorous impact evaluations indeveloping countries using randomized control designs. Thisexperience, covering a wide variety of settings and social programs,offers lessons for task managers and policymakers interestedin evaluating social sector investments. The main conclusions are: first, policymakers interested inassessing the effectiveness of a project ought to consider arandomized control design because such evaluations not onlyare feasible but also yield the most robust results. Second,the acute resource constraints common in developing countriesthat often make program rationing unavoidable also present opportunitiesfor adopting randomized control designs. Policymakers and programmanagers need to be alert to the opportunities for buildingrandomized control designs into development programs right fromthe start of the project cycle because they, more than academicresearchers or evaluation experts, are in the best positionto ensure that opportunities for rigorous evaluations are exploited.      

Mobile people, mobile capital and tax neutrality: Sustaining a market for Offshore Finance Centres

This paper examines the self-reported effects on business performance, sustainability and confidence following international initiatives to regulate Offshore Finance Centres (OFCs). Since the late 1990s small countries and territories have been encouraged and pressured by multilateral organisations and supranational institutions to exchange information on civil and criminal tax matters. Interview based research in Australia, Andorra, Guernsey, Samoa and Singapore has been carried out to determine how OFC clients have reacted to these initiatives along with their impacts on the offshore sector, including local economies and societies. This paper shows that these international programs have caused contraction and reorganisation in leading OFCs. However, their diverse clientele and access to established markets for global financial services continues to make them attractive locales for fund management, trusts, captive insurance and private banking. The effects on OFCs located in smaller, developing countries have been much more severe, with reports that these jurisdictions are facing major problems sustaining a share of the worldwide market for financial services and products. This suggests that because of the uneven consequences of international efforts to regulate offshore finance in selected jurisdictions, these initiatives may actually increase tax competition rather than reduce it, at least in the short term. For multilateral policies to be effective, it may well be necessary for wealthy and poor nations, including OFCs (which include some of the world's poorest and wealthiest jurisdictions) to determine if tax competition contributes to or ameliorates the inconsistencies and contradictions of globalisation and the uneven development that it produces on a worldwide scale.     

The Bolivian Social Investment Fund: An Analysis of Baseline Data for Impact Evaluation

The Bolivian Social Investment Fund (SIF) is a financial institutionthat promotes sustainable investments in the social sectors,principally in the areas of health, education, and sanitation.This article shows how to use preintervention data collectedfor evaluating the SIF to improve the targeting of a program,to test the quality of the evaluation design, and to definecorrective measures if necessary. It finds that among SIF interventionsthe benefits in education are distributed relatively equallyover the population, while the investments in health and sanitationfavor better-off communities. The article contributes to the methods used to evaluate socialinvestment funds and similar programs. It compares two typesof evaluation designs to assess social investment fund interventionsin the education sector. The authors demonstrate that a simplematched-comparison design introduces a bias in the estimateof the program effect, whereas an experimental design basedon random assignment does not. With preintervention data, theanalyst can select a quasi or indirect experiment, where thechoice of the indirect experiment coincides with the selectionof valid instrumental variables. The availability of preinterventiondata makes it possible to compare the two types of evaluationdesigns as well as to test the validity of the instruments andto determine the loss of efficiency due to the use of quasi-experimentaltechniques instead of random treatment assignment.     

An Impact Evaluation of Education, Health, and Water Supply Investments by the Bolivian Social Investment Fund

This article reviews the results of an impact evaluation ofsmall-scale rural infrastructure projects in health, water,and education financed by the Bolivian Social Investment Fund.The impact evaluation used panel data on project beneficiariesand control or comparison groups and applied several evaluationmethodologies. An experimental design based on randomizationof the offer to participate in a social fund project was successfulin estimating impact when combined with bounds estimates toaddress noncompliance issues. Propensity score matching wasapplied to baseline data to reduce observable preprogram differencesbetween treatment and comparison groups. Results for educationprojects suggest that although they improved school infrastructure,they had little impact on education outcomes. In contrast, interventionsin health clinics, perhaps because they went beyond simply improvinginfrastructure, raised utilization rates and were associatedwith substantial declines in under-age-five mortality. Investmentsin small community water systems had no major impact on waterquality until combined with community-level training, thoughthey did increase the access to and the quantity of water. Thisincrease in quantity appears to have been sufficient to generatedeclines in under-age-five mortality similar in size to thoseassociated with the health interventions.     

The Impact and Targeting of Social Infrastructure Investments: Lessons from the Nicaraguan Social Fund

The benefit incidence and impact of projects financed by theNicaraguan Emergency Social Investment Fund are investigatedusing a sample of beneficiaries, a national household survey,and two distinct comparison groups. The first group is constructedon the basis of geographic proximity between similar facilitiesand their corresponding communities; the second is drawn fromthe national Living Standards Measurement Study survey sampleusing propensity score matching techniques. The analysis findsthat the social fund investments in latrines, schools, and healthposts are targeted to poor communities and households, whereasthose in sewerage are targeted to the better-off. Investmentsin water systems are poverty-neutral. Education investmentshave a positive, significant impact on school outcomes regardlessof the comparison group used. The results of health investmentsare less clear. Using one comparison group, the analysis findsthat use of health clinics increased as a result of the investments;using both, it finds higher use of clinics for children underage six with diarrhea. With neither comparison group does itfind improvements in health outcomes. Social fund investmentsin water and sanitation improve access to services but haveno effect on health outcomes.     

Evaluating the Impact of Conditional Cash Transfer Programs

Several developing economies have recently introduced conditionalcash transfer programs, which provide money to poor familiescontingent on certain behavior, usually investments in humancapital, such as sending children to school or bringing themto health centers. The approach is both an alternative to moretraditional social assistance programs and a demand-side complementto the supply of health and education services. Unlike mostdevelopment initiatives, conditional cash transfer programshave been subject to rigorous evaluations of their effectivenessusing experimental or quasi-experimental methods. Evaluationresults for programs launched in Colombia, Honduras, Jamaica,Mexico, Nicaragua, and Turkey reveal successes in addressingmany of the failures in delivering social assistance, such asweak poverty targeting, disincentive effects, and limited welfareimpacts. There is clear evidence of success from the first generationof programs in Colombia, Mexico, and Nicaragua in increasingenrollment rates, improving preventive health care, and raisinghousehold consumption. Many questions remain unanswered, however,including the potential of conditional cash transfer programsto function well under different conditions, to address a broaderrange of challenges among poor and vulnerable populations, andto prevent the intergenerational transmission of poverty.