

A multifaceted program causes lasting progress for the very poor - ALee
http://www.sciencemag.org/content/348/6236/1260799.full

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alwaysinshade
_Following identification of the beneficiary households through a
participatory process in the village, the six activities are:

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.

~~~
Kluny
It's great to see acknowledgement that poverty is a complex problem that
requires a complex (though not complicated - an important distinction)
solution.

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.

~~~
random28345
> So often commenters will thoughtlessly say things like "Just give [poor
> people] a bunch of money!"

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.

~~~
greeneggs
In the article, they say that the Ghana experiment includes a comparison to a
pure cash transfer (although I'm not sure of the amount of the transfer), and
"the results are forthcoming."

> 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).

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mkagenius
Its interesting to see the savings increase in the figure in the article [1].
Even though they are utterly poor they do not spend on themselves instead they
save for future.

[1]
[http://www.sciencemag.org/content/348/6236/1260799/F1.large....](http://www.sciencemag.org/content/348/6236/1260799/F1.large.jpg)

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RobertoG
This kind of intervention probably has strong network effects. It would be
interesting to do this for everybody in a big area. Maybe in a full country
and see what happens?

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.

