School children raise their hands during an activity to mark the third annual Global Handwashing Day at Thirime primary school in Kikuyu, Kenya, October 15, 2010 (Thomas Mukoya/Courtesy Reuters).
Which development initiatives work and which do not? It is a simple question, but there has been surprisingly little attempt to answer it rigorously. Over the past decade, some economists have been trying to change this. They are applying a tool long used in the pharmaceutical world—randomized control trials (RCTs)—to evaluate the real impact of programs intended to help people.
I hosted Dean Karlan, a professor of economics at Yale and a practitioner of randomized control trials, for a meeting last week at CFR. Karlan is also the co-author of a new book, More Than Good Intentions: How a New Economics Is Helping To Solve Global Poverty. In the book, he and his co-author, Jacob Appel, review dozens of RCTs—some they conducted, some done by others—that test the effectiveness of various ways to improve the lives of the poor around the world. Some of the results are offbeat: one study in South Africa showed that simply putting a picture of an attractive woman on a consumer loan brochure caused more men to apply for loans. As Karlan and Appel write in the book, “Surely no customer would say that his decision to borrow boiled down to the picture in the corner of his pamphlet, but there it was in the data, clear as day.” Other studies deal with weightier subjects: an RCT in Mexico, for example, established that the Progresa program, a conditional cash transfer scheme in which poor families receive payments in exchange for getting regular medical care, had a strong positive impact on recipients’ health.
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