How to rescue people from deep poverty, and why the best methods work | Hacker News Reader

How to rescue people from deep poverty, and why the best methods work

economist.com

76 pointse15ctr0n41 comments

"In the 1990s it became clear that microfinance, then the most exciting tool in development economics, was not reaching the very poorest people... BRAC came up with a scheme to help the ultra-poor. It gives them a small stipend for food, followed by an asset such as a cow or a few goats, which they are expected to manage. Field workers visit weekly for the next two years, teaching recipients, for example, how to tell when a cow is in heat and how to get it inseminated. The aim is to help women 'graduate' from extreme poverty to the normal kind—as Sir Fazle puts it, 'to help them back into the mainstream of poor people'. ...A study published earlier this year in Science showed that similar programmes run by other NGOs boosted consumption in Ethiopia, Ghana, India, Pakistan and Peru, with the effects lasting at least a year after they ended. ...Such programmes are pricey. In India and Bangladesh they cost more than $1,000 per household at purchasing power parity. Other research explains why. ...The poorest women, it turned out, did far more hours of income-generating work...Yet they packed them into fewer days... The reason is that they toil mostly as domestic servants and in the fields—and casual agricultural work is seasonal. During planting and harvest they work extremely hard; the rest of the year they do little. Better-off women usually rear livestock, which is not only steady work but pays about twice as much per hour. When the poorest women are given cows, they quickly fill their idle time..."

My family tried to do this in China. They donated a flock of sheep to a rural village. But they were tricked into paying high prices for an inferior breed. Keep in mind, my family is in China.

So how do we help foreign countries without losing our donations to swindles?

Monitoring for fraud and publicizing good and egregious bad actors probably goes a long way against swindlers.

For example, these posts are critical of Heifer International:

http://blog.givewell.org/category/heifer-international/

But they are mostly concerns about the whole concept of giving livestock, so it's probably still an effective strategy for someone that wants to give livestock to give money to Heifer International rather than trying to do anything more direct.

Charity always attracts scammers and swindlers. That's on them. It's OK, as long as you're not making the problem worse by financing "charities" that only further impoverish their clients either by malice or by incompetence.

Suppose that rural village can put those inferior sheep to at least some use?

Same as avoiding swindles in any other use of money; research the specific options before committing resources and don't have blind faith in whoever is seeking your money.

> What is striking is not so much their greater wealth ... Their relatives have started talking to them. Asked to explain how their lives have changed, one of the first things they say is that they now get invited to weddings.

This is the most interesting part to me. Their escape from "deep poverty" has allowed them access back into their social networks.

It's also very unfortunate because such social networks are key in preventing individuals from going into "deep poverty" in the first place.

>>Such programmes are pricey. In India and Bangladesh they cost more than $1,000 per household at purchasing power parity.

I wish there was a way I could send $1,000 directly to a named individual, rather than the usual charity practise of putting mony in a pot and getting a duplicated letter from your sponsored person.

GiveDirectly[0] provide a minimal 'charity layer' of such a service (transferring money directly to the right people).

If you feel disillusioned by modern charity, effective altruism might interest you. I recently read "Doing Good Better" by Will Macaskill and I recommend it - it puts forward a very compelling case for how to optimise charity-giving.

[0]https://www.givedirectly.org/operating-model.html

I guess what I want to do is help 100% of one person, rather than 0.001% of a thousand.

I have a friend who's been directly supporting a single orphan in Kenya and put him all the way through school making sure he was fed, clothed, and taken care of. Such programs take stable governments and some level of state infrastructure, but seeing him grow up happy, healthy and educated has been worth every penny to her.

Why? Isn't it the same in the end?

Money is fungible.

Some people like having concrete evidence of where their dollar was spent?

Here's my thinking, along these lines... Everyone's all into Gamification, right? Well... I started to wonder what would happen if you made the ultimate cross between Entertainment and Philanthropy. Wrap it up as a video game you can give to a teenager in the first world, to try to teach them some empathy. I tried to describe what it's like to play this game, as if one teenager was explaining it to another teenager.

...

"Save A Kid"

It costs $100 to buy the game, and it's $15 per month to play.

When you pick a character, you get to pick a Country of origin, and then an age and a sex. Then you get to start customizing, by looking for a character that has a given race or religion, if you care about that. For newbies, I'd definitely recommend picking a character that speaks a language you can speak fluently. And if you're an Expert, you can play a character that has different Disadvantages. It doesn't give you any bonus attributes, but you get bragging rights for playing one of them well. There's like, Orphan and Kid-With-AIDS, and then there are harder ones like "Scarred by War" where the kids have missing limbs, etc. Anyway, newbies should probably avoid those at first.

So, anyway, it's kind of like The Sims, or a Tamagotchi, or Farm Town, or something.

You log on every day, and depending on the character you picked, you either get an email, or maybe a voice mail or a video mail. The character tells you about how much it appreciates the new computer (http://latptop.org) and the food (https://www.fmsc.org/home). The first couple levels, it's all about gaining Health Points. You can totally nerf your character by spending some of your monthly allotment of extra gold points on buffing the kid's parents (http://www.kiva.org/), if he has them. The parents start generating more gold points on their own, which makes it a lot easier to play. Some people even buy buffs online (http://www.heifer.org/), which I think is cheating, but for a newbie, it's an easy way to keep your kid alive.

Anyway, you and your friends can make a clan, and all play characters in the same village. I've even heard that some really crazy rich players can buy buffs for the whole village, like a potable water and electricity system (fora.tv/2008/07/03/Dean_Kamen_on_Potable_Water_and_Sustainable_Electricity).

There are Events in the game, where like the country the kid is in goes into War. That sucks, because sometimes you lose your character, and the game is perma-death, which is lame. They do a really good job making the game realistic, because sometimes you even see in the news that the real country is in war. Most of the time, they just make stuff up though, because most of the wars never show up on TV, but your character won't shut up about them.

Anyway, it's a sandbox game, which some people don't like. But the AI is incredible. Your character will like ask you how they can keep their food from spoiling, and if you look it up online (https://www.ashoka.org/fellow/mohammed-bah-abba), and explain to them how to do it, they can save some of their food. Or like, how they can build a windmill from scrap metal (https://en.wikipedia.org/wiki/William_Kamkwamba).

Anyway, you play the same character as long as you want to, but most people get bored after the kid has a job and their own family, and they start over at level one. Restarting costs another $100 though.

The game developers say if too many people play the game, they might even run out of characters to play. I don't buy it. They'll always make up some new War, or some world-shattering Disaster like a typhoon or something, and then a bunch of new characters will open up. Expansion packs, and all that.

A lot of people play this game like 40 hours a week, or something ridiculous. Some people say that playing this game has changed their lives or whatever, and they give up their jobs and play it full time (http://www.peacecorps.gov/).

...

Anyway, I guess you can already play most of those mini-games in other forms, but until they package it up in a nice box that you can buy at Best Buy, and they set up some dedicated servers, and set up a scoring ladder (good grades in school, etc.) and maybe some achievements ("high school diploma", "got a job," etc.), oh and a nice technical support line to answer questions and give advice, I don't think the game will really take off.

I'm trying to figure out whether I more want to laugh at that -- or invest in it.

As Zoidberg would say... "Can't it be both?"

You could write a great short story in this form.

A good alternative might be to take $1000 worth of food to the local food bank. You don't need to look abroad if you want to make a difference in the lives of the poor.

I would say that the condition of people in a food bank in the UK would be a couple of orders of magnitude better than widowed women in rural India.

Sure, but don't discount what he's saying. If you help your community get back on its feet, then fewer tax dollars need to go in to your community to support it. This might lead to additional governmental foreign aid.

At least once a year (I wish I did it more often) I donate food to the local food banks.

http://www.heifer.org/gift-catalog/animals-nutrition/index.h... lets you donate the amount for a specific animal to give to a family. I'm not sure if the money ends up getting spread out or is actually used to buy X goats, but it's pretty close to what you're looking for. They're doing exactly what this article calls for too.

Just be careful with these "give an animal schemes" Some of these schemes in Niger have lead to massive over grazing by goats and desertification.

Watsi is only for medical treatments but works like that. I would like to see something similar for education.

https://watsi.org/

Check out http://www.friendsforeducation.org

They are super small, but do some amazing work paying school fees and scholarships for students from Dalit and marginalized communities in India.

100% of donated funds go to the students and they are completely transparent about every donation.

Thanks. I will check them.

The operative word is "PPP-adjusted". Bangladesh has a PPP exchange rate of 30 cents on a dollar, so you only need to send $300.

How would you find this individual? You'd need some sort of organization to run a vetting process to find someone who is optimal for your criteria.

Just that first step makes the process fairly expensive. Which is why charities exist.

I wasn't arguing against any charities being involved, just a change to the model. I.E a combination of Watsi and the BRAC mentioned in the article.

I don't know of a way to give directly to an individual, but I know of Zidisha[0] where you can lend directly.

[0] https://www.zidisha.org/

what are the best methods? (for someone who doesn't want to register to read the economist)

Give them livestock, which is not as seasonal as farming, and produces about 2x the hourly income. Teach them how to care for the livestock. This generates more income, and allows them to start using Micro financing, whereas before the livestock, the community deemed them worthless and would not allow them access to it.

Its a very expensive (relative) program to initiate, but yeilds very positive results.

You get a few articles free, or go to the homepage and open in incognito mode.

a yes, those economists ain't got nothin on Incognito

Sounds like BRAC is doing very promising work indeed. I wonder why I never heard of them before.

To some extent, you probably have heard of them, under the rubric 'direct transfers' or cash payments. Direct transfers of valuable assets (cows or cash) to the very poor have done very well when evaluated in randomized experiments, and I suspect you've seen at least one article on them in the past (albeit it might have been on GiveDirectly or one of the other programs rather than BRAC itself).

>Esther Duflo of the Massachusetts Institute of Technology showed that women who were offered cows, goats and intensive training in the Indian state of West Bengal not only did not fall back into indigent poverty but kept climbing out of it.

Lets not minimize the effect of "intensive training". Education is just as important as the goats.

>This is a clue to why microfinance does not reach the poorest.

I have worked with the poor in developing countries. I am highly skeptical of the claims made by microfinance. This work described here is VERY interesting because it does not involve debt and it ADDS education.

I wonder if anyone has just tried giving these people the $1,000 up front? Maybe with some resources on how they can invest that money?

I bet most would opt to move to a place with better opportunities, which isn't a bad idea.

Often the problem is that they do not have the talent to manage money. Giving them livestock causes them to work for rewards. Its easier for them to learn. There is a commitment required. Also people are willing to help them, in their learning. If they show willingness to earn rather than beg, people are more apt to help. Still, there needs to be an evaluation into the charter of the recipient. Some could sell the livestock and buy booze.

I'd be really interested in seeing the actual presentation. Does anyone have a link to the slides?

http://qz.com/566702/finland-plans-to-give-every-citizen-a-b... FTW

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