MORE THAN GOOD INTENTIONS-TO WORK AGAINST POVERTY 1213047　 HORIE AOI

CONTENTS• How We Do What We Do

• No Way Forward?

• Randomized Control Trials : Asking the Right Question

• Flip a Coin for Science

• A Hard Question for Ernest

• What We Talk About When We Talk

About Poverty

HOW WE DO WHAT WE DO

FINCA’s program

• Making small loans to entrepreneurs in developing countries, which would allow them to expand their businesses and escape poverty. ⇒microcredit

• Giving loans to the poor was a captivating idea.

HOW WE DO WHAT WE DOThe simple and sad fact was that neither we nor FINCA knew how – or even whether – microcredit was really helping the poor.

• What we need was some hard evidence of the impacts microcredit had on the lives of FINCA’s clients.

HOW WE DO WHAT WE DO

There were two types of people in the development universe : thinkers and doers.

• The doers were out in the real world, doing the best that they could – but they were essentially blind.

• The thinkers were doing interesting analytical research – but much of the research never made it out into the world.

HOW WE DO WHAT WE DO

Development Innovations→Innovations for Poverty Action (IPA)

MIT’s Poverty Action Lab (J-PAL)

NO WAY FORWARD?Does aid really work?

• At the root of their differences is a disagreement over what constitutes ‘evidence.’

• The debate about aid effectiveness has been tied up in complicated econometrics and a mire of controversial country-level data.

Find individual programs that work, and support them. Find programs that don’t work, and stop doing them. And observe the patterns of both to learn which conditions are conductive to success, so that our first attempts at designing solution get better and better.

NO WAY FORWARD?

Doctors agreed on the basic principles : people were ill because of toxins in their blood, and the way to fix the problem was to bleed them out.

• Somebody finally proved rigorously that it didn’t work.

The sad fact is that much of the work being done around the world to fight poverty is in a sense like bloodletting.

NO WAY FORWARD?The process of systematic testing, and the corresponding refinement of methods and treatments, is just beginning.

• Give you a way of thinking critically about impact that you can use wherever you engage with the issues of poverty – in the news, in conversations, or as a donor.

RANDOMIZED CONTROL TRIALS : ASKING THE RIGHT QUESTIONA Randomized Control Trial (RCT), has long been the gold standard throughout the sciences for determining effectiveness.

• How did people’s lives change with the program, compared to how they would have changed without it?

• They measure how people were before and compare it to how they were afterward.

• These are aptly called ‘before-after’ evaluations.

RANDOMIZED CONTROL TRIALS : ASKING THE RIGHT QUESTION

The before-after approach fails when something external causes a change in the outcomes we care about.

• It is quite easy to identify the outside influence. But with many development programs it is difficult, if not downright impossible, to observe them all.

• We need something extra that let us account for those external factors – especially when they are hard to identify.

RANDOMIZED CONTROL TRIALS : ASKING THE RIGHT QUESTION

A set of ‘control group’

• People who don’t get the treatment being tasted, but whom we monitor anyway.

• Any external factors that come into play should affect both the treatment and control groups equally.

• We can still compare the

two at the end to see the

impact of treatment.

FLIP A COIN FOR SCIENCE

The two groups have to be similar enough that we can make a meaningful comparison between them.

• The very fact that certain people were excluded from the program often means they are not right to use for comparison.

• ‘why they were excluded?’ – the answers to these questions can have big implications.

FLIP A COIN FOR SCIENCE

Microfinance bank ask for twenty volunteers to form the pilot group.

They choose twenty of the remaining clients to monitor for control.

• The pilot group is a success. Based on these results, it launches the product and offers it to all clients.

Many take up the new loans, but they don’t fare so well – they actually default more than before.

FLIP A COIN FOR SCIENCE

Maybe those who stood up to volunteer were excited by the offer because they had good business ideas and well-developed plans to execute them. Maybe those who didn’t volunteer had fewer good ideas.

• Many development programs seek to leverage the intangible qualities of participants.

• But they aren’t easy to identify or measure – they are hidden.

FLIP A COIN FOR SCIENCE

You flip a coin for each person to decide whether she is offered a program or not.

• It doesn’t have any idea who the go-getters are, but on average it will send half of them to each group. (RCT)

• taking a ‘before’ of each,

giving one of the groups

the program in question,

and comparing

‘after’ of both groups.

A HARD QUESTION FOR ERNESTWith almost equal frequency, seemingly intractable problems are resolved in an instant, and tasks that appeared straightforward are found to be impossibly complex.

There simply is no such thing as a ho-hum day in the field.

WHAT WE TALK ABOUT WHEN WE TALK ABOUT POVERTY

Fundamentally, poverty is a denial of choices and opportunities, a violation of human dignity. It means lack of basic capacity to participate effectively in society.

WHAT WE TALK ABOUT WHEN WE TALK ABOUT POVERTY

Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for life.

• 1人に魚をあげれば彼は 1日食べさせられる。彼に魚の釣り方を教えれば一生食べさせられる。（老子）

The teach-a-man-to-fish approach’s result have not been as universally great as one might hope.

WHAT WE TALK ABOUT WHEN WE TALK ABOUT POVERTYIf we want to solve poverty, we need to know what it is in real – not abstract – terms. We need to know how it smells, tastes, and feels to the touch.

The day-to-day experience of being poor is about lacking day-to-day necessities. It’s about not being able to get the things you need.

Addressing world poverty is a dynamic, complex problem. But we won’t solve it if we see it only as that.

WHAT WE TALK ABOUT WHEN WE TALK ABOUT POVERTY

We need to see individuals. Individuals with different capabilities and different needs.

• The possible solutions are as numerous and as varied as the people they serve and the needs they address.

• We need to think creatively, and recognize that we are unlikely to find a single answer for poverty.

• Step by step, we can refine

the tools we use and the

ways we use them.