A multifaceted program causes lasting progress for the very poor
sciencemag.org
sciencemag.org
1. Productive asset transfer: a one-time transfer of a productive asset
2. Consumption support: a regular transfer of food or cash for a few months to about a year (11)
3. Technical skills training on managing the particular productive assets
4. High-frequency home visits
5. Savings: access to a savings account and in some instances a deposit collection service and/or mandatory savings
6. Some health education, basic health services, and/or life-skills training
So let's translate what's happening. Starting with one, we have a tool or array of tools that can help someone be productive. Let's call it a paint brush and paint. At two we have something that provides essentials until the tool-person-couple is making enough money to support themselves - social security/low income supplementation. Three, they're taught how to use the asset effectively - basic job training. Four, make sure they're doing alright - a social worker shows up at their house. Five, a means of saving for a rainy day (which has meaning in the tradesperson world), when things go bad (not enough work for a limited period) or to increase capability or comfort down the track. Finally at six, teaching someone how to take care of themselves which means they can also take care of others.
It'd be interesting to see what would happen if we coupled #1 and #6 in countries high on the HDI with existing social welfare programs. Perhaps a computer with MS Office or cheap, fuel efficient car for #1 and cooking/cleaning/child care training for #6. Throwing money at the problem alone without making sure they have a productive capability is where things are going wrong. This could be something that scales nicely for any country.
Allow me: "Give a man a fish and you feed him for a day, ...".
So often commenters will thoughtlessly say things like "Just give [poor people] a bunch of money!" or "Just send them to work camps!" or "Just make sure they don't waste their money on drugs!".
Just this or that, as if this simplistic idea is enough and the rest will sort itself out. Most people have some good ideas for solving poverty, but no one idea is sufficient on its own for such a diverse problem.
The amount of money we spend on effective social welfare programs (e.g. food stamps) added to the money spent on ineffective social welfare programs (e.g. farm subsidies) is pretty enormous. If this money, including the administration costs, were instead distributed as "helicopter money" (e.g. alaska Permanent Fund), the economic benefits and social benefits might be signifincant improved.
The original article examines a "white-glove" approach to ending poverty, this requires significant resources to train and compensate the people working for the program. I would like to the testing of the null hypothosis, an amount of cash equal to the program cost given directly to a control group.
> These positive results leave us with a number of important questions. First, is it better to deliver physical assets and support, rather than pure cash transfers? There is evidence—from an RCT evaluation of the GiveDirectly program in Kenya, which transferred on average PPP US$720 to poor households, either monthly or in one lump sum—that pure cash transfers also have positive impacts on consumption, food security, asset holdings in the short run (including productive assets), and on psychological well-being (49). Similarly, de Mel et al. (50) find that a cash (or in-kind) transfer to existing self-employed individuals in Sri Lanka has a persistent positive effect on self-employment profits 4.5 to 5.5 years later. Because it is cheaper and easier to just deliver cash rather than physical assets and training, and the initial consumption increases from Kenya seem to be higher than what we observe after 2 and 3 years, it would be useful to have a direct comparison of the effects of these programs. The Ghana experimental design does include a comparison of the Graduation program to merely an asset transfer, and the results are forthcoming.
> ...
> Second, how important was the training and coaching as a component in the full intervention? This is a particularly important component to test, because its costs are on average twice that of the direct transfer costs, and because operating at scale requires quality hiring, training, and staff supervision. As discussed above, we do not have experimental variation with which to test this question. Evidence from elsewhere suggests that the household visits, which are a large expenditure, may not be a cost-effective component. In Blattman et al. (33), for example, variation between zero and five household visits did not generate, after 9 months, large differences in income outcomes (but did lead to higher investment). Furthermore, a meta-analysis of self-employment training programs has found mixed but rarely transformative impacts from training (51).
[1] http://www.sciencemag.org/content/348/6236/1260799/F1.large....
Prof. Esther Duflo (one of the authors and a MIT Professor) should start a kickstart project or something.
Perhaps the Internet can finance the end of poverty.