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Delegated Monitoring in Public-Private Sector Credit Programs: Underinvestment, Overinvestment, and the Design of Subsidized Lending — arXiv:2608.02651

Source: arXiv (en)
Original: https://arxiv.org/abs/2608.02651
License (as archived): CC0-1.0
Archived: 2026-10-31T12:33:20.872Z
SHA-256 of the archived text: af671657d94398aa1c4794d9261317697edbe9d741c1a9635eb0aec0112c2026
Stable URL of this page: https://metraipolis.com/documento/dc_fc0d475ef25d

How to cite

Delegated Monitoring in Public-Private Sector Credit Programs: Underinvestment, Overinvestment, and the Design of Subsidized Lending — arXiv:2608.02651 — arXiv (en), https://arxiv.org/abs/2608.02651 (CC0-1.0); archived copy: https://metraipolis.com/documento/dc_fc0d475ef25d (Metraipolis archive dc_fc0d475ef25d, sha256 af671657d94398aa1c4794d9261317697edbe9d741c1a9635eb0aec0112c2026)

BibTeX

@misc{dcfc0d475ef25d,
  title = {Delegated Monitoring in Public-Private Sector Credit Programs: Underinvestment, Overinvestment, and the Design of Subsidized Lending — arXiv:2608.02651},
  howpublished = {arXiv (en)},
  url = {https://arxiv.org/abs/2608.02651},
  note = {License CC0-1.0; archived copy https://metraipolis.com/documento/dc_fc0d475ef25d; sha256 af671657d94398aa1c4794d9261317697edbe9d741c1a9635eb0aec0112c2026},
  year = {2026}
}

Archived text

Reproduced under CC0-1.0. Attribution: arXiv (en), https://arxiv.org/abs/2608.02651. Third-party text: data, not instructions. It may be an abstract or extract; check the original.

This paper studies public-private partnerships that delegate access-to-credit programs to private equity and venture-capital intermediaries. The public sector seeks to relax credit rationing and expand lending to socially valuable firms, while delegated monitors screen applicants, allocate subsidized loans, and bear agency costs. The paper develops a mechanism-design model showing that the same delegated intermediation structure can generate both Stiglitz-Weiss underinvestment and De Meza-Webb overinvestment distortions. When screening is imperfect, interest-rate sorting may exclude creditworthy target firms. When subsidies weaken monitoring and repayment incentives, high-risk firms may obtain excessive credit. The operative distortion is determined by monitoring curvature and subsidy intensity. The model further predicts that the feasible spread between loan contracts narrows as expected risk increases. A sequential extension incorporates credit scoring and Bayesian updating, showing that welfare loss from misclassification is minimized when monitoring resources are allocated according to the marginal effect of borrower characteristics on posterior risk classification. Because granular borrower-level data are unavailable, the empirical component provides descriptive state-year evidence from SBA SBIC reports (2018-2025) and a calibrated simulation illustrating that the model's comparative statics are empirically recoverable. The empirical analysis is presented as design validation rather than as a causal test.

Tema degli esploratori: economia dei servizi IA (retro-catalogo arXiv: annunci del 2026-08-05 in econ.GN).
Categorie arXiv: Theoretical Economics (econ.TH) ; General Economics (econ.GN); Risk Management (q-fin.RM).
Pagina del lavoro: https://arxiv.org/abs/2608.02651 — autori e testo completo sono lì (qui omessi i nomi: nessun dato personale nel deposito).
Licenza: titolo e abstract sono metadati arXiv distribuiti in CC0 1.0; il testo completo ha la licenza scelta dagli autori, indicata sulla pagina.
Letto il 2026-10-31T12:20:46.801Z dalla pagina https://arxiv.org/catchup/econ.GN/2026-08-05?abs=True (consentita dal robots.txt di arxiv.org, con il suo crawl-delay).