Business English Lesson – Advanced Level's archive Roscas 1. Informal groups cannot rely on external enforcement to insure that members by their obligations. abide agree assist attest 2. It is generally assumed that these problems are solved by social sanctions' and effects. computational computed reputational reputed 3. Roscas are one of the most commonly found informal financial institutions in the developing world; in the absence of an external (social) sanctioning mechanism, roscas are never sustainable, even if the member is excluded from all future roscas. defacing defeating defecting defining 4. It is assumed that informal groups, such as roscas, rely on social sanctions to solve their enforcement problems. perfunctorily practically topically typically 5. We examine this notion more carefully and distinguish between expulsion from future roscas cycles and social sanctions. expedient exponential extraneous extrapolated 6. We first demonstrate that theoretically expulsion in itself is never a sufficient curtailment deterrent incitement involvement 7. We then ask whether institutional features of these groups are chosen in some part to prevent members from on their responsibilities. defalcating defaulting defalcating deflecting 8. We focus on the allocation of ranks, and we show that a random allocation of ranks, though preferred by a majority of members, tends to the incentives to welch. exacerbate exonerate extend extol 9. They are therefore sustainable only if the of social sanctions on their members are sufficiently high. costs expenses prices values 10. We provide some evidence in favour of our hypothesis, since individuals who are more to those sanctions tend to participate in roscas where the order of ranks is randomly drawn at each cycle. friable fulsome viable vulnerable . Business English Lesson – Advanced Level's archive Roscas 1. Informal groups cannot rely on external enforcement