Out Of Poverty - An Experiment That Worked

Introduction
If you have been following along here at all, you realize that I have been focused on things like poverty and developing nations, economics, and culture, etc.  I have been trying to understand just how one can help people get out of the poverty pit.  I was persuaded that it is a long and difficult job, requiring a change the basic culture or world view, so that they are empowered to climb out of poverty.  If you want to know more about that, just scan down the table of contents on this blog. The entry on Jan. 26, 2011, about culture and poverty is a good starting place.
    http://carlscheider.blogspot.com/2011/01/culture-and-developing-nations.html
The basic idea is that a major part of the problem is the "world view" of people, which persuades them that they are not able to get out of poverty.

Jeffrey Sachs has a different view, of course, with his UN Millennium Projects for Sustainable Development.  His concept is that it just takes a certain amount of investment to get a community up to the level where development can be sustained. In his villages, they bring a lot of resources to bear for 10 years, to help people get up over the curve of poverty.  The results of that investment are still questionable.

Net - It Takes a Long Time
In all of this, my conclusion was that it simply will take a long time to really make a difference.

Or NOT!
Well - I have just read a fine little article published in the Economist last May which seems to offer a much better perspective - a bit of hope.  It describes a project in India where a bit of assistance and training gave a poor community such a leap of hope, that they made significant improvements in their well being.  The researchers who describe this are also the authors of a fine little book Poor Economics by Abhijit Banerjee and Esther Duflo.   I wrote a more extensive review of that back in Nov. of 2011.  You can find that here:
    http://carlscheider.blogspot.com/2011/11/poor-economics-book-review-and-few.html

Brief Summary
The experiment described here was the gift of a small productive asset - a cow, some goats, or chickens.  The people also received a small stipend which was intended to keep them from immediately eating or selling the productive resource, with several weeks of training in how to care for the animals. The hope was that there would be a small increase in their income, and people would become more adept at handling their finances.  The result was much more dramatic.  After the assistance stopped, the people were eating 15% more and earning 20% more each month.  The result could not be explained simply the small gift. They were saving more and working more.  They had hope.

The article is here:   An absence of optimism plays a large role in keeping people trapped in poverty.  If you have problems with the link, drop me a comment and I'll send a PDF copy of it along.

What Happened?
The authors theorize that what happened was that people had lost hope, and felt trapped in a well of poverty. A small step - increasing their work, or saving a little money, did not look like it was worth the effort.  With just a bit of a push, and a small resource gift, they now saw themselves with the real possibility of escaping poverty - and they started working at it in earnest.  They were given hope.

Will It Work Elsewhere?
There is only a very brief description of this experiment in the article.  The larger society around this community in India has a significantly different world view than many developing nations.  It is hard to know if a similar approach would work in a different place - such as Nicaragua.  There are experiments which seem to indicate that the same thing can happen.  One agricultural school in particular, the Ebenezer Farm or Rancho Ebenezer, has taken a similar approach in a much more coordinated way.  You can read more about that here:  http://www.ranchoebenezer.org/.

In this approach  people are given a significant amount of training in an entire program of agriculture and animal husbandry.  A Church visited them in mid 2012, and produced a set of photos describing the work there:  Methodist Church Visits Rancho Ebenezer Facebook Album.  There is a video describing all of this on MySpace:  Rancho Ebenezer MySpace Video. The first part of the video explains the type of work - the latter part is more about the "medical mission" of the northern community in Nicaragua.

The Nicaraguan government plan, Zero Hunger, had a similar approach, but with less training and accountability.  There is also considerable criticism of that program because of its total lack of transparency and accounting, and its apparent dependence on ALBA.  It may be that the larger society in India is more supportive of development than the Nicaraguan society.  Without a comparative study - it is hard to know.

Bottom Line
It seems pretty clear that raising the hopes of people, and empowering them with small steps can set them on the path to eliminating hunger and poverty.  We clearly need a lot more study on just what works.  It is pretty clear that major aid programs do not work, so this approach holds out some hope.

On Experimental Development Aid and Economics
Esther Duflo, the author cited above, gave a very interesting TED talk in May of 2010.  You can find it here:
     http://www.ted.com/talks/esther_duflo_social_experiments_to_fight_poverty.html?quote=706

Despite her heavy French accent, this is a great talk for anyone interested in development.  She makes a strong case that we have no idea what has happened to the billions of dollars in aid that has gone to developing countries in the past.  It may have done good - or not.  There is no way to tell.

She espouses a scientific method of evaluating what works.  She describes in detail three experiments to determine the best way to: 1) immunize children, 2) distribute bed nets against malaria, and 3) improve schooling.  The results of the experiments are clear - and were not at all what was expected.  The first two are also described in the book, Poor Economics.  The last one is not - and it has the most amazing result.  If you only had $100 to spend on schooling in a developing country - where would you get the highest return?  The result will surprise you!

Small Incentives and Hope
Small incentives seem to be the key - and hope.  But it is hard to know what will work in a given area without a controlled experiment.  It appears that we are only at the beginning of understanding just how to best solve this problem.  But there is real hope.

If you learn of more experiments along these lines, please let me know.

Nairobi - Kenya Slum - business is booming

I am sitting here listening to Christmas music - reading an article from The Economist - thinking about poverty and development, etc.  This piece on the largest shanty town in Nairobi is fascinating - very well done.  It is worth a read:  Nairobi Shanty Town - Economics!

It is done from the perspective of several of the residents.  This is the face of poverty today - and the face of hope.  These people are working hard, struggling, risky, dangerous, but working hard.  They have HOPE!  The author says it would not be unlike parts of NYC back when things started booming there.

I am sure that a more supportive government and services and banking would make it work a whole lot better - but these people will make it.  Cell phones are how you do banking and payments! And the Masai are feared AND trusted.

There are many similar stories in the book Poor Economics - if you have a mind to learn a bit more about the entrepreneurial spirit of the poor - what's the other choice they have?  And this is East Africa - where the world view is that "no one is in charge" - it's changing.