Rural cooperative credit repayment enforcement and interlinked labour allocation in Ethiopian peasant associations: a regression-discontinuity analysis of default-threshold sanctions

Regression-discontinuity designs are frequently proposed for evaluating default-threshold sanctions in rural cooperative credit, yet the operating characteristics of such designs under realistic clustering of peasant-association outcomes remain poorly characterised. No observational data are used or claimed; the analysis characterises the estimator's operating characteristics under a declared variance structure with a between-cluster standard deviation of 6.0, a residual standard deviation of 4.5 and an intraclass correlation of 0.64. Power was estimated across 2000 replications per design cell for cluster counts of 8, 16, 24 and 32 and effect sizes of 3, 5 and 8 percentage points. The analysis indicates that 54 clusters are required to detect a 5-percentage-point effect at 80 per cent power under the declared variance structure, a requirement that exceeds the largest cluster count examined. The credibility revolution's emphasis on identification has obscured the power constraints that bind threshold-based evaluations in clustered rural settings, and it derives the design implications for future work on interlinked credit-labour contracts.