Wednesday, November 11, 2009

Poverty, Interrupted

French economist and MIT Poverty Action Lab founder and codirector Esther Duflo
loves the United Nations’ goal of ensuring that all children worldwide attend school. But as an economist, she knows that many programs designed to achieve this goal don’t work. Sure, she says, people still think – wrongly -- that if you give away school uniforms and provide kids with free meals, attendance will skyrocket. “Sometimes, ideas that become conventional wisdom are erroneous and need to be rethought,” she says—especially because the budget for poverty-fighting is so limited and will likely remain so.

Duflo, whose research has helped change the way governments and aid organizations address global poverty, is a professor of Poverty Alleviation and Development Economics at MIT and founder and co-director of the Jameel Poverty Action Lab. Earlier this year, she was named a Macarthur Foundation Fellow. In a recent speech to attendees at the PopTech conference for social innovation in Maine, Duflo urged new approaches to alleviating poverty around the world.

“The temptation is to look for a single, silver bullet to make poverty go away,” Duflo said. Some people blame foreign aid, but poverty has many facets, she said—including lack of health, lack of education, and lack of choice for self-realization.

Applying scientific methodology, Duflo and her colleagues and students at the MIT Poverty Action Lab approach projects of well-intended governments and NGOs with a fresh eye. “We have a spotty and scattered idea of the most effective ways to deliver social impact,” Duflo says, so evaluating what works is critical. The 37-year-old Duflo’s weapon of choice is the randomized trial—the technique used to discover new drugs—to find what works and what doesn’t.

How does it work? So far, so good: Duflo’s researchers, for example, compared a program that aimed to improve children’s school attendance through a program of de-worming, with a program that paid kids to go to school. Testing these projects – by forming treatment groups and control groups – Duflo found that the $3 per year de-worming program resulted in dramatically higher increases in school years attended than did the $6,000 per year program of paying kids to go to school.

Another study in India by Duflo showed that schoolteachers were much more likely to show up for work when they participated in a monitoring system that offered them financial incentives; the system also led to better student achievement.

“We, as a community [of social entrepreneurs and innovators], need to take rigorous, scientific methods of evaluation and apply them to problems in development, not to declare some programs failures so much as to encourage experimentation and innovation around new and more effective solutions,” Duflo told the PopTech crowd. Farmers in poor countries know a lot about agriculture, for example, but they are unlikely to experiment with innovation. Why? Says Duflo: “If you fail, your family dies. You can look at what your neighbors do but if everyone’s looking, no one is innovating. You need people in the business of experimenting and sharing the results of those experiments in order to succeed.”

Still not convinced? Consider Duflo’s approach to tailor aid programs to local cultures and economic practices. Giving a kilogram of lentils with an immunization shot to people in a poor Indian district recently raised the rate of immunization from 5 percent to 37 percent. “It’s cheaper to give out lentils because it keeps the health workers fully occupied,” Duflo added. Similarly, telling girls of the risks of HIV among older men versus younger ones reduces their risky sexual behavior by 67 percent. Why? Duflo says girls so informed tend to avoid sex with older men. “This compares to no impact in a normal HIV education approach,” Duflo says, “which simply tells girls that all sexual behavior is risky,” she says.

What’s the most successful way of getting farmers in Kenya to use optimum amounts of fertilizer? Give them modest incentives in the form of free fertilizer delivery soon after harvest.

“If we’re talking about 1 billion poor people, are we really making progress by distributing lentils and warning girls about sugar daddies?” Duflo asked. “Yes. We are. These aren’t silver bullets but they’re a strategy for transforming the ways we do development and encourage innovation.

“…Innovations like these will never be generated by the market,” she added. “Only community efforts will do that job.”

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