News and Announcements

According to The Chronicle of Philanthropy's Caroline Preston, "Some advice for nonprofits that want a piece of the Facebook fortune: Get yourself on GiveWell‘s list of effective charities."

A new foundation called Good Ventures, started by Facebook Co-founder Dustin Moskovitz, is donating money to charities recommended by GiveWell. For those of you who have been following GiveWell's charity evaluation, they rated IPA as a top 8 "standout organization" for donations.

Excerpt:

[GiveWell board member Cari Tuna] wrote in a blog post last month that Good Ventures would donate $500,000 to the Against Malaria Foundation and $250,000 to the Schistosomiasis Control Initiative, the No. 1 and No. 2 charities as ranked by GiveWell.

Other nonprofits on GiveWell’s list of “standout” organizations—GiveDirectly, Innovations for Poverty Action, KIPP Houston, Nyaya Health, Pratham, and the Small Enterprise Foundation—would get money from Good Ventures in the coming months, Ms. Tuna wrote.

[...]

“One simple idea—that all donors should be at least as thoughtful about our philanthropic investments as we are about our financial investments—has transformed the way I think about giving,” she says.

Check out the full article here.

Marketplace's Kai Ryssdal interviewed IPA Founder and President Dean Karlan on why people give.

Read an excerpt below, or watch and/or read the full interview here.

Ryssdal: So this is, perhaps, the most basic question of all when we're talking about philanthropy and charity, but why? Why do we give?

Karlan: You know, first of all, I have something fairly obvious to say, which is people do give for lots of different reasons. So there's some easy low-hanging fruit that do explain a lot of people's giving, which is to be part of something, to be part of a greater cause. And the striking thing about that and the tension that that creates is the question of whether people are giving simply to be part of a cause or because of what that cause actually accomplishes and how effective it is.

IPA Research Affiliate John List was quoted in an article in Nonprofit Quarterly examining donor behavior.

Excerpt:

John List, an economist at the University of Chicago has tested matching programs for their capacity to encourage people to give more. List found that a matching program did inspire more people to give, but offering a higher matching ratio decidedly did not lead to larger donations. People whose donations would be quadrupled gave the same amount as people whose donations would simply be doubled. “People get utility or satisfaction out of giving to a good cause. And they do not care how much public good is provided,” concluded List.

One theory about why people are less likely to give if they are more analytical has to do with what is termed here the “drop in the bucket effect,” or the sudden realization that one’s contribution pales in the face of overwhelming need. “If you really did the calculus,” List said, “my 25 dollars to the Sierra Club means nothing on the margins. So if I wanted to be really analytical about it, I’m not going to give.” List asserts that it follows that encouraging donors to give to the most efficient, best organizations might mean that less money actually gets donated.

Read the full article.

"Randomised trials could help show whether aid works"

IPA Research Affiliate David McKenzie is mentioned in this Economist news story on the effectiveness of randomized trials, calling back to the Millennium Villages Project that has stirred up some controversy in the development impact sphere this year. Relevant Excerpt:

Michael Clemens of the Centre for Global Development, a think-tank, and Gabriel Demombynes of the World Bank says that a randomised trial is needed to disentangle what the millennium programme is doing from what is happening anyway. In such a trial, each village would be paired with a similar one not getting the same help—and the results compared.

This stirred up a hornets’ nest. In a vitriolic letter to another critic, Mr Sachs calls the idea “that one can randomise villages like one randomises individuals…extraordinarily misguided”. Randomised trials cannot work in villages, he insists, because they are too complex and dynamic. Comparing a millennium village with a randomly chosen one “will add surprisingly little”; the proper comparison is with a region or a country as a whole.

David McKenzie of the World Bank then took up the cudgels. He pointed out that if the impact of the project were as great as its backers claim, it should be discernible even against a shifting background; that, in practice, randomised trials can be used to evaluate complex, dynamic processes, not just simple, static ones (though they have to be designed properly); and that comparing a favoured village against another after the intervention has started—which is being done—isn’t a randomised trial in the proper sense (properly, one should select pairs of villages, then choose one of the pair randomly as the subject of the programme).

Full article here.

Congratulations to IPA Affiliates Abhijit Banerjee and Esther Duflo, who were chosen as #60 of Foreign Policy's Top 100 Global Thinkers. Below find the excerpt from the magazine; or, read it from the original source here.

From Psychologist Art Markman, Ph.D.'s HuffPost blog, IPA Research Affiliate Eldar Shafir's research is highlighted in showing how a positive or negative outlook can impact one's life.

When you are focused on the negative side of things, you often focus on rejecting options rather than selecting them. Witness what is happening with the GOP primaries now. Republican voters are focused on eliminating candidates rather than finding ones they like. Research by Eldar Shafir shows that when people are trying to reject options, they weigh the negative information about the options more heavily than the positive information.

Read the full post.

Stephen P. Groff, a member of IPA's Policy Advisory Board and Vice President of Asian Development Bank, writes a compelling statement on how to approach aid effectively, using Korea as an example:

Teaser:

Aid to Asia is coming under particularly intense scrutiny. Many see the growing affluence and ample state coffers in some Asian nations, and understandably question why the region needs foreign aid. Behind this sparkling veneer, however, is another face of Asia, the more than 1.6 billion people who eke by on less than $2 a day -- less than the price of a small Starbucks latte. Asia's poor desperately need the health, education and other social services that foreign aid brings. For the sake of these 1.6 billion, and to better ensure the stability of the region; it's imperative that aid not be cut.

It is equally essential, however, that we ensure this aid delivers as promised, giving donor nations value for money, and poor families a better life. Good intentions are not enough.

A textbook example of how aid can work effectively can be found in the Republic of Korea, where global development partners are meeting in Busan for the Fourth High Level Forum on Aid Effectiveness. Having leapfrogged from "third world" status to a developed country within the course of a single generation, Korea provides a shining example of a country that made development assistance work.

Read the full article.

From DevEx News: USAID's Chief Innovation Officer, Maura O'Neill, wrote an informative article on using innovation and systematic research to create sustainable development solutions, using IPA's Safe Water Program, specifically the Chlorine Dispenser project in Kenya, as an example.

Read the full text below or click here to open a window with the original article.

A few miles outside of Busia in Western Kenya, Carol Nekesa brings us out to a small village that is enjoying a regular supply of clean water for the first time. Next to the stream where the villagers regularly fill up their containers of water, a chlorine dispenser has been installed.

For years, we have known that adding a little bit of chlorine to water can kill the bacteria that make people sick. And getting sick from bad water can too often turn fatal for people already ravaged by disease.

But until recently, only 10 percent of Kenyan families have been using chlorine. Why was that and how could that change? Carol, a Kenyan from Busia, was part of a team that was pioneering not just a particular solution, but a systematic method for creating more cost-effective solutions again and again.

As the OECD Development Assistance Committee holds the Fourth High Level Forum on Aid Effectiveness in Busan, South Korea, at the end of this month, we all seek better answers to “what works” in the fight against poverty. How can we uncover what people really will use to lift themselves out of extreme poverty and debilitating disease instead of what others think they need? How do we source and deploy solutions faster and cheaper? And how do we discover innovative ways to finance them?

Official Development Assistance as cataloged by DAC is now over $128 billion dollars a year. We need to be as prudent as possible with the U.S. taxpayer’s dollars and also leverage private investment. Net private capital flows to developing countries were as high as $1.1 trillion in 2007, according to the World Bank. While up from $152 billion, in just six years, with the global downturn, private investment was down in 2009 but still a big number: $598 billion. With our economic climate and the stakes as high as they are for so many in desperate poverty, we need to leverage every dollar as effectively as we can to deliver development results. We need to test what works — not just what products or services yield the highest impact for the lowest cost, but also what business or public sector deployment models allow for sustained impact.

Let’s return to Carol. She is the Kenya deputy country director for Innovations for Poverty Action, a nonprofit group whose members include some of the world’s foremost development economists. It is an organization dedicated to researching what works to fight poverty. Carol is part of a team of 500 researchers and practitioners in 40 countries that use tried and true methods pioneered by pharmaceutical researchers and adapted by leading economists to systematically test development solutions. As IPA researchers sought to improve chlorine uptake in Kenya, they considered adding chlorine to piped water like we do in most U.S. cities.

But Kenya’s desire to bring piped water to its 40 million people has far outstripped its financial and institutional abilities to do so in the last decade. Waiting for this infrastructure means millions of Kenyans would suffer from stunted growth or die in the meantime.

Researchers tried selling or giving away small bottles of chlorine so that people could add a little to their water jug. But people used the chlorine once or twice and the bottles then just decorated the shelf. It was only when researchers installed a dispenser right at the water hole that they saw terrific, persistent results. IPA manufactured the device in Kenya with a special valve imported from Minnesota. The dispenser capital costs (US$1 per person) were a tenth of the piped costs, with annual operating costs (30 cents U.S. per person) much less as well.

Suddenly, clean water for millions in rural East Africa could become a reality in the next decade if we figure out a sustainable financing model for scaling.

This article was originally published on DevEx's website on November 21.

Earlier research has shown that your colleagues may also influence whether you sign up for the 401(k) plan or attend a 401(k) education seminar. One study offered a randomly selected subset of employees who were not yet enrolled in their company's retirement account $20 to attend a benefits information fair. Among those who were offered the financial incentive, 28 percent attended, while only 5 percent of employees who worked in departments in which no one was offered a monetary reward attended. Interestingly, employees who were not offered a financial incentive but who worked in the same department as someone who was offered a reward had a 15.1 percent attendance rate for the seminar, perhaps because their peers receiving the reward influenced them to attend.

"An employee who sees colleagues receiving the inducement letter might be reminded of the fair and be led to think that this is an important event worth rewarding employees for attending and thus might decide to attend herself," write Esther Duflo of the Massachusetts Institute of Technology and Emmanuel Saez of the University of California - Berkeley in the 2003 study of 6,200 university staff employees. "Individuals who receive the letter and decide to go to the fair might ask their colleagues to join them."

A year later, the retirement-plan enrollment rates in departments in which some employees received the financial incentive were about 1.25 percentage points higher than in departments in which no reward was offered for attendance. But the sign-up rate was not significantly higher among people who received the reward themselves than among those who worked in a department where someone else received the $20 incentive. "Social-network effects definitely caused some people to take steps which ultimately led them to change their tax-deferred account participation decision," the researchers found. "Our experiment induced 50 extra employees to start contributing to the tax-deferred account."

Read the full article here.

Press release commends book as "at once radical in its rethinking of the economics of poverty and entirely practical in the suggestions it offers, allowing a ringside view of the lives of the world's poorest."

IPA Research Affiliates Abhijit Banerjee and Esther Duflo's Poor Economics has won the Financial Times and Goldman Sachs Business Book of the Year Award, a distinction established in 2005 to highlight one book each year that has provided "the most compelling and enjoyable insight into modern business issues."

Bloomberg reports on the story:

Abhijit V. Banerjee and Esther Duflo’s “Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty” won the Financial Times and Goldman Sachs Business Book of the Year Award.

Banerjee and Duflo, MIT economists and co-founders of the Abdul Latif Jameel Poverty Action Lab, overcame competition from Barry Eichengreen’s “Exorbitant Privilege,” Daniel Yergin’s “The Quest” and other finalists to claim the award of 30,000 pounds ($48,000) during a dinner last night at the Wallace Collection in London.

In “Poor Economics” (PublicAffairs), Banerjee and Duflo use randomized control trials of the type used to assess new drugs to study the behavior of poor people and the best ways to alleviate poverty.

Addressing topics from health to education, the authors build a shrewd yet sympathetic portrait of a problem as complex as those individuals who make up the all-too-often stereotyped poor. They shed light on seemingly irrational behavior, such as the Moroccan farmer who finds money to buy a television when he can’t afford food.

Ultimately, they argue that aid can work, as long as what they call “the three I’s: ignorance, ideology, and inertia” are banished from policy making.

The authors didn’t think they were writing a business book, Banerjee said.

“What’s particularly wonderful about winning this award is that these ideas, that in some ways come from a very different world -- the world we live in, which is a world of poverty and policy -- resonate with people who are from the world of business,” Banerjee said after the ceremony. “That these ideas have managed to cross that boundary -- it’s really very rewarding.”

Read Bloomberg's full article and check out the 4-Traders official Press Release

In other media:

Businessweek

Financial Times

A Slate article highlights doctoral researchers Michael Callen and James Long's field experiment intending to explore the potential of "camera auditing" to reduce corruption in electoral process in Afghanistan. The researchers cite Duflo's study, Encouraging Teacher Attendance through Monitoring with Cameras in Rural India, as inspiration for their work:

"If computerized balloting and transmission of results would be too expensive for a country like Afghanistan, mobile-phone technology holds much greater promise. (Besides, given the amount of corruption, any fancy election equipment would just get stolen anyway.) For improving election accountability, authors Callen and Long took as inspiration a study of teacher absenteeism in India, which showed that simply having a student photograph his teacher each morning sitting with the other students cut teacher absences in half and boosted students’ test scores.

For their election study, Callen and Long applied the same camera-audit approach to crack down on a common form of election fraud."

Citing a paper headed by IPA Research Affiliate Abhijit Banerjee, "Do Informed Voters Make Better Choices? Experimental Evidence from Urban India," the article notes the growing trend toward running randomized field experiments within the social sciences, and specifically in electoral political research.

Read the full article here.

The Guardian's Poverty Matters development weblog recently highlighted development experts questioning the impact of the Millenium Villages Project. IPA Research Affiliate Chris Blattman weighs in, calling for more thorough evaluation of "the theory of the big push":

The nub of the issue was well put by Chris Blattman when he asked on his blog what the MVP will prove. That "a gazillion dollars in aid and lots of government attention produces good outcomes"? This is hardly surprising, says Blattman. The point, he adds, is how we test "the theory of the big push: that high levels of aid simultaneously attacking many sectors and bottlenecks are needed to spur development; that there are positive interactions and externalities from multiple interventions".

As Blattman says, the reverse could be true – "that marginal returns to aid may be high at low levels and that we can also have a big impact with smaller sector-specific interventions". There has been plenty of development along the latter lines in recent years, such as mass distribution of malaria bed nets for example. Which is the most effective, sustainable form of aid? It's a very good question.

The problem for the likes of Blattman, Clemens and Demombynes is that, for a number of reasons, the MVP – despite the huge investment of resources, expertise and effort – is not going to help answer the question one way or the other. The evaluation process is simply not rigorous and open enough..."

Read more on their recommendations for randomized and longitudinal evaluation here.

Update: MVP responds to critics, arguing "When we began the project, we knew that randomised trials would not be the appropriate methodology for evaluating it's impact. Our focus was, and is, on designing operational systems across many sectors to achieve the eight MDGs, a task that is far more complex than can be addressed in a standard clinical trial."

Patna, India:

Over 17 million children in the Indian state of Bihar were provided with deworming treatment as part of one of the largest school-based deworming efforts ever conducted in the world. The announcement was made by Mr. Rajesh Bhushan, the State Project Director of the Bihar Education Project Council (BEPC) and Secretary of Public Relations Department, Mr. Sanjay Kumar, Secretary of Department of Health & Family Welfare and Executive Director of the State Health Society Bihar (SHSB), and Ms. Prerna Makkar, Regional Director – South Asia, Deworm the World (DtW) as they reported the results of Bihar’s first-ever statewide school-based deworming program implemented from February through April 2011.  Mr. Kumar said "it is remarkable that such a technically simple intervention, as regular and systematic deworming, can have such a profound effect on the nutritional, health and education status of millions of children." 

Bihar has a very high rate of parasitic worm infection,with all school-age children at risk and more than 50% infected in most districts, according to prevalence surveys conducted by DtW.  As worm infections damage children’s health, education and development, all school-age children in Bihar – nearly 21 million – were targeted for deworming by this program.  Infected children are more likely to suffer from malnutrition and anemia, resulting in children who are either too sick or too tired to concentrate in class or to attend school. This can cause lifelong harm to a child with research showing that children who remain infected earn 43% less as adults, and are 13% less likely to be literate. 

Fortunately, treating worm infection is as easy as administering a deworming tablet once or twice each year to all school-age children. The medication is safe for both infected and uninfected children, and delivery through schools ensures the greatest coverage and impact.  Deworming children in schools, where the treatment is administered by teachers and supported by healthcare staff, is a simple and cost-effective way to improve children’s health and their ability to learn.  Researchers at Harvard University and University of California, Berkeley have found that school-based deworming reduces school absenteeism by as much as 25%.

This massive first-time deworming program in Bihar was launched under the direction of the State School Health Coordination Committee (SSHCC), an inter-sectoral committee between the SHSB and the BEPC in coordination with DtW.  Mr. Bhushan stated that “a strong three-way partnership amongst the BEPC, SHSB, and Deworm the World along with elaborate advance planning and large-scale training of education and health personnel led to the program's success.”  Program costs in Bihar were financed by the BEPC, SHSB and Information and Public Relations Department, with support for DtW’s technical, coordination and monitoring assistance provided by the World Bank and the Global Network for Neglected Tropical Diseases.

During the program, nearly 140,000 teachers and 20,000 healthcare staff throughout Bihar were trained to deliver the medication.  “Deworming Day” treated both enrolled and non-enrolled children between the ages of 6 and 14 through a network of over 67,000 government schools statewide.  Children who receive treatment benefit immediately – previous research shows that school participation increases and children are better able to learn in school. The SSHCC is actively considering implementing a second round of deworming in 2012, with the goals of continuing treatment for the millions of children already reached, and expanding the program to include even more school-age children. 

The large scale of the Bihar program exemplifies the success and positive impacts of school-based deworming.  According to Dr. Lesley Drake, Executive Director of DtW, “there are very few interventions which are as safe, cost effective and as easy to administer as deworming.  For less than 50 cents per year, a child can be free from worms and free to learn.  The children of Bihar are already experiencing the benefits of treatment, and we will continue to support governments in their efforts to ensure that millions more children can live healthy lives and fully reap the benefits of education.” 

Bihar provides a model that can be rapidly scaled up and sustained over time to improve the education, health and productivity of school-age children. 

Find out more about school-based deworming at www.dewormtheworld.org

Click here for more information about DtW's deworming work.

Notes

Deworm the World (DtW) is an initiative of Innovations for Poverty Action and the Partnership for Child Development. DtW works directly with Ministries of Education and Health, in coordination with development partners, to help launch, strengthen and sustain school-based deworming programmes.

DtW has helped to reach over 37 million children in 27 countries.

Dean Karlan sabe demasiado de lucha contra la miseria como para dejar espacio en sus tesis a eslóganes facilones o maximalistas. El catedrático, considerado uno de los grandes expertos mundiales en desarrollo económico, contesta con un cortante "no" a la pregunta sobre si algún día será posible ver algo parecido a la erradicación de la pobreza. Con todo, este "optimista pragmático" vino a Madrid, invitado por la Fundación Rafael del Pino, para dejar claro que, si bien la victoria total es imposible, hay muchas batallas que vale la pena luchar.

Nicholas Kristof writes for the New York Times: 

"Careful research by Professor Esther Duflo of M.I.T. and other economists suggests that microfinance can chip away at poverty but is not a panacea."

Our Agricultural Insurance product for farmers in Northern Ghana featured in the Daily Graphic. 

Economist Abhijit Vinayak Banerjee was in Calcutta recently. The Ford Foundation International Professor of Economics at the Massachusetts Institute of Technology gave a talk on his book Poor Economics — co-authored with fellow MIT professor Esther Duflo — at a programme in Bengal Club in association with The Telegraph. Before the talk, the economist spoke to Devadeep Purohit about the book and some of the contemporary economic issues. 

Africa’s MFI performance, despite low population density and high operating costs, is competitive and it leads the world in savings mobilisations, according to the African Development Bank.

Yet access to formal finance is still low, says Beniamino Savonitto, project director at Innovations for Poverty Action, an NGO. The excluded seek financial supports from family, friends or curb markets.

The Independent newspaper names Poor Economics one of its Ten Best Finance Books.

Any NGOs involved in deworming activities are invited to submit to the 2010 Global NGO Deworming Inventory. 

What is the Global NGO Deworming Inventory?

The Global NGO Deworming Inventory was launched in June of 2010 with the explicit purpose of assessing the breadth and scope of NGO deworming activities and their treatment achievements worldwide. The Inventory collates data on NGO deworming activities and presents an overview of who is deworming where, and how many children are being treated. Data from the Inventory are then shared with the WHO Preventive Chemotherapy (PCT) Databank to compile NGO deworming data with data from Ministries of Health and measure collective progress towards the World Health Assembly (WHA) target of treating 75% of school age children at risk of infection with intestinal worms.

Results from the 2009 Inventory

Twenty-four NGOs participated in the 2009 Deworming Inventory and reported about 62.8 million treatments (school-age children treated with a deworming drug), of which 20.8 million were unique treatments not previously captured in the WHO databank. These numbers indicate that there is a notable amount of deworming conducted by NGOs that is not recognized at the global level and therefore not reflected in measurements of global progress towards reaching the WHA target. Visit the 2009 Inventory Reports page for treatment reports by country, organization, and for a full report on the 2009 Inventory results.

You are Invited to Participate

The 2010 Deworming Inventory strives to continue highlighting the achievements of NGO deworming programs and ensure that your efforts are accounted for at the global level. We thank all organizations that participated in last year's Inventory and extend the invitation to all organizations with deworming programs to participate in the 2010 Deworming Inventory.

How to participate

Please download the 2010 Treatment Reporting Form, complete the requested items to describe your deworming program and achievements, and submit the completed form to info@deworminginventory.org. Alternatively, if you have your own deworming program report, please send the report toinfo@deworminginventory.org.

What Happens to the Data Submitted

As treatment data are collected, country-level aggregated reports will be developed and posted on the Highlighted Reports page of the Inventory website. 

For more information about the Inventory, please visit the Inventory website. For any concerns or clarifications, please email: info@deworminginventory.org.

Interview with Esther Duflo in The Telegraph

A Connecticut non-profit is testing a new product to help low-income people overcome their particular obstacles to saving money.

Innovations for Poverty Action is recruiting participants at the District Government Employees Federal Credit Union in Washington. The effort replicates a program already up and running in New York City.

According to Esther Duflo what we need is “a pragmatic change of direction”. Duflo, 39, is the director of the Massachussests Institute of Technology’s (MIT) Action Poverty Lab and is considered by the Economist to be one of the most influential “economic thinkers” of today’s world.

Tackle the small issues, says economist Abhijit Banerjee, and that will answer the bigger questions.

Abhijit Banerjee of MIT talks with EconTalk host Russ Roberts about Banerjee's book (co-authored with Esther Duflo), Poor Economics. The conversation begins with how randomized control trials (a particular kind of social experiment) have been used to measure the effectiveness of various types of aid to the poor. Banerjee goes on to discuss hunger, health, and education--the challenges in each area and what we have learned about what works and what does not. The conversation closes with a discussion of the role of the labor market in the private sector.

Esther Duflo speaks at a special panel discussion on poverty eradication at the Economic and Social Council.

Banerjee and Duflo suggest small interventions rather than grand solutions to help the poor. Click here for the podcast. 

Book event with Dean Karlan and launch of the New America report "Accelerating Financial Capability Among Youth: Nudging New Thinking."

Monday, June 27, 2011 - 12:30pm - 2:00pm

Also this week: we hear from the authors of a new book called Poor Economics, Abhijit Banerjee and Esther Duflo.

Interview with Esther Duflo

A book extract from Poor Economics.

Read an extract from Poor Economics by Abhijit Banerjee and Esther Duflo.

Karlan and Appel’s book More Than Good Intentions is an easy, and often compelling, read. 

A review and book extract from Poor Economics.

Alan Hudson, Governance Adviser at ONE reviews More Than Good Intentions and Poor Economics.

One of many unpleasant-but-interesting paragraphs in Abhijit Banerjee and Esther Duflo’s “Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty.”

The authors of a new book that looks at ways to reduce poverty around the world (and whether they work) have suggested one possible reason why the microcredit model may not be creating more entrepreneurs: It rewards cautiousness.

Dean Karlan, Jacob Appel, and Nicole Mauriello of IPA talk to John Dankosky on Connecticut Public Radio.

"This book is a gem. Anyone serious about aid, philanthropy, or impact investing should read it, maybe a couple of times."

"How do we compare the importance of, say, health versus education versus housing? And how do we make tradeoffs between them?"

In light of the recent publication of “Poor Economics”, the new book by Abhijit V. Banerjee and Esther Duflo, Mobile Money for the Unbanked caught up with Dr. Duflo to discuss some relevant themes to help our readers understand the broader impact of mobile financial services in the economics of the poor.

Researchers at MIT’s Poverty Action Lab and at Innovations for Poverty Action, a research lab based in New Haven, Connecticut, now look to the power of randomized trials, the same methodology that scientists use to test their hypotheses. They are guardedly optimistic that with enough work, they’ll find some interventions that can make small corners of the world slightly better.

A new book explodes the myth that the poor can't be trusted with direct cash transfers because they make 'bad' life decisions.

“How could the [Center for Effective Philanthropy] CEP possibly not invite Ms Duflo?” is our question.

Politicians are ignorant about trials, and they're weird about evidence. It doesn't need to be this way. In international development work, resources are tight and people know that good intentions aren't enough: in fact, good intentions can sometimes do harm. We need to know what works.

“Under Sendhil Mullainathan, the Office of Research will promote evidence-based policy-making at the Consumer Financial Protection Bureau (CFPB). The Office will provide analytical support to the Bureau and strengthen its understanding of possible benefits and costs of potential CFPB policies”

Abhijit Banerjee and Esther Duflo — both professors at M.I.T. — have helped changed the practice of economics. Mr. Banerjee and Ms. Duflo have pushed anti-poverty programs in developing countries to become more serious about evaluating whether they are actually improving people’s lives.

William Easterly reviews "More Than Good Intentions" and "Poor Economics".

Esther Duflo gives the Sixth Annual Richard H. Sabot Lecture at the Center for Global Development, drawing upon her new book with Abhijit Banerjee, a J-PAL co-founder, titled Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty.

There has been a spate of very good books about economic development recently, and here is another. It's a sign of the subject's increasing maturity, founded on better data, experimental methods, and also the intellectual space for debate created by the end of the Cold War

In April, Duflo's new book, 'Poor economics: a radical rethinking of the way to fight global poverty', will once more turn the spotlight on actions to tackle poverty. Co-authored with Abhijit Banerjee, the book aims to make 2011 the year that the "economics of poverty" become a key part of international political discussions.

Our partner the Consumer Credit Counseling Service of Delaware Valley has been awarded a grant from the Center for Financial Services Innovation to test whether social commitments and text alerts can help consumers reduce debt. The program, Borrow Less Tomorrow, was designed jointly with IPA and our research affiliates Jonathan Zinman and Dean Karlan. 

Esther Duflo writes on how to promote immunization in poor areas.

The Bill and Melinda Gates Foundation recently gave Karlan, author of the upcoming book, “More Than Good Intentions,” a $7.3 million grant to conduct research on microsavings. It’s part of the Gates Foundation’s $500 million pledge to make savings accounts accessible to poor people around the world and aid in building financial security for them.

Alex Kobishyn, project coordinator at IPA, says she expects the grant to produce at least 20 new research projects. “It’s really a knowledge frontier,” she says.

Center for Global Development presents a brownbag seminar on

Exploiting Externalities to Estimate the Long-Term Effects of Early Childhood Deworming

Featuring 
Owen Ozier
PhD Candidate, University of California - Berkeley 

Friday, January 28, 2011
12:00pm--1:00pm

In the past decade Esther Duflo has changed the way policy-based research can be done in the Majority World.

Esther Duflo says that educated and healthy people are the pillars of good social policy.

By Abhijit Banerjee,

The great attraction of loan write-offs just before elections is that unlike most government programmes, they get to the intended person, fast — the bank just takes your loan off its books and it is done. This is also why an embattled chief minister might want to tell his constituents that they no longer need to repay their 'unjust' microfinance loans. It might cross the politician's mind that next time there will be no loans to write off and that one day people may start to rue the fact that no one except the moneylender wants to lend to them, but right now they have a job to hold on to.

Microfinance fills a vital need in developing countries: the provision of financial services to those on low-incomes who lack access to formal banking. It is not a silver bullet that ends poverty, as is sometimes claimed. But studies have shown sound evidence that it allows many of the world’s poorest people to develop businesses, insure against bad weather and illness, maintain employment, and smooth consumption. 

By Abhijit Banerjee, Pranab Bardhan, Esther Duflo, Erica Field, Dean Karlan, Asim Khwaja, Dilip Mookherjee, Rohini Pande and Raghuram Rajan.

“It’s a very effective way to find out what works and what doesn’t,” said Esther Duflo, an economist at the Massachusetts Institute of Technology who has advanced the testing of social programs in the third world. “Everybody, every country, has a limited budget and wants to find out what programs are effective.”

The micro-lending movement has won a Nobel Prize as a leading antipoverty strategy.  Now, in some places, it’s facing imminent collapse. IPA Project Coordinator Alexandra Kobishyn speaks with Where We Live host John Dankosky.

"A guide to who's still standing in the post-crash marketplace of ideas."

Far more poor people want to save, rather than borrow, but often have a hard time putting money aside.

In many ways, Grameen’s greatest innovation was simply to bring convenient and reliably continuous services to villages ...

With these kinds of reliable services — which most of us take for granted — it became possible for customers to relax a little, and to focus on parts of their lives more important than finance ...

Allegations of harassment by loan collection officers are particularly damaging because they signal a departure from reliability and rule-bound, professional relationships.

Duflo, a French development economist, is a champion of randomized field experiments to test how well poverty-fighting programs are working. 

On Tuesday, Montana voted overwhelmingly to cap interest rates for payday loans at 36 percent annually. Similar caps passed in the last election cycle in Ohio and Arizona, limiting the amount companies can charge when making small loans to customers. The ballot results make Montana the 18th state to institute such caps.

In a December 2008 working paper, Dartmouth economist Jonathan Zinman concluded that former payday customers in Oregon ended up using less desirable alternatives such as overdrafts and utility shutdowns, and that “restricting access caused deterioration in the overall financial condition of the Oregon households.” In summary, “restricting access to expensive credit harms consumers.”

Dan Ariely has picked the "Seven Most Powerful New Economists" for Forbes magazine, including IPA Research Affiliates Esther Duflo and John List.

IPA founder and President Dean Karlan lends insight to a discussion on why donations have been sluggish to Pakistan flood appeals

"Sudden events seem to generate more funds. A flood (and droughts) happen gradually and build. There isn't any one single day in which news is huge. For the same reason, this pushes the story away from the media spotlight. But massive and sudden earthquakes or tsunamis draw our immediate attention and shock us." for full article click here

IPA Researcher Chris Blattman's evaluation of an intervention aimed at Street Youth in Liberia is covered by the BBC's The World program. 

Listen to the audio here, including interviews with Liberia Country Director Tricia Gonwa and Professor Blattman.

"So you're asking: How does somebody recover from being conscripted and having to kill their family members. And I think recover is the wrong word. You don't... Recovering is not the goal. It's like when people ask me, so, how is alleviating poverty? How's that going? You have to actually narrow it down to something very specific that you want to achieve. For example, today, these kids, they're very poor. But today I want them to be able eat two meals, or I want them to be able to sleep under a roof and I know a way to make that happen."

Economists Abhijit Banerjee and Sendhil Mullainathan lend their insight to a discussion of a radical proposal: a market for immigration visas. 

IPA Research Affiliate Abhijit Banerjee writes of the importance of taking evidence seriously. 

Here is an entirely banal idea that I think has the potential to change the world: Take evidence seriously.

Taking evidence seriously does not mean privileging numbers over all other forms of knowledge - theories, narratives, images. Nor does it mean the kind of radical scepticism that questions everything to the point where no action is possible.

What it does mean is being very conscious of the quality of evidence, about the danger of naively interpreting the patterns that we see in the world.

In an Op-Ed column this weekend, Nicholas Kristof highlights the crucial role of expenditures on small luxuries in the economic lives of the poor.  He cites work by IPA Research Affiliates Abhijit Banerjee and Esther Duflo on the spending habits of the poor.  More recent work by those researchers (and co-authors Rachel Glennerster and Cynthia Kinnan) highlighted the fact that access to microcredit helped some cut back on so-called "temptation goods" like alcohol, gambling and tobacco, perhaps in order to accumulate the savings to start a business.

From the article:

“Esther Duflo has distinguished herself through definitive contributions to the field of Development Economics,” the AEA said in  its announcement. “Through her research, mentoring of young scholars, and role in helping to direct the Abdul Latif Jameel Poverty Action Lab at MIT, she has played a major role in setting a new agenda for the field of Development Economics, one that focuses on microeconomic issues and relies heavily on large-scale field experiments.”

IPA Research Affiliate Abhijit Banerjee writes on the effects of reserving parliamentary seats for women.

"The most important reason why we should want reservations may, therefore, be that they help shake people out of their ignorant prejudices against women in politics and open the way for the country to draw upon a much bigger pool of political talent"

In this Op-Ed, IPA Research Affiliate Jonathan Zinman, writing with Victor Stango, draws on research findings to make suggestions for the role of the Consumer Protection Agency in the United States.  Zinman praises, as an example, the promise of the Social Security Administration's research and development work on financial literacy. This work includes the launch of the Center for Financial Literacy at Boston College, of which IPA is an active partner.

IPA Research Affiliate Abhijit Banerjee discusses the problem (and opportunity) of climate change for the poor. 

"Moreover, it is possible that the poor realise that they are the ones who will pay if the climate really changes drastically - after all, they are the ones who will not be able to shift to Switzerland or wherever things happen to be better."

Research on the efficacy of commitment contracts to quit smoking by IPA Research Affiliates Xavier Giné, Dean Karlan, and Jonathan Zinman is mentioned in a Newsweek article about how public policy tools can be used to fight heart disease.

An article on re-thinking the strategies that will improve education in the developing world mentions work by Karthik Muralidharan, an IPA Research Affiliate. 

"When schools are poorly run, studying what is wrong is the most vital subject of all."

IPA Research Affiliate Abhijit Banerjee was awarded the Infosys Science Foundation's achievement award for his ground-breaking research in economic theories of development.

Work on the impact of savings in Kenya by IPA Research Affiliates Pascaline Dupas and Jonathan Robinson is mentioned in this article on the importance of saving in the developing world.  Nicholas Kristof continues the discussion on his blog.

In Kenya, two economists conducted an experiment by paying the fees to open bank accounts for small peddlers. They found that the peddlers who took up the accounts, especially women, enjoyed remarkable gains. Within six months, they were investing 40 percent more in their businesses, typically by buying more goods to be resold.

Nicholas Kristof names Deworm the World, an initiative in which IPA is a prominent partner,  as a great idea for a charitable holiday gift.

IPA President Dean Karlan and Project Associate Kareem Haggag discuss the findings of research on matching grants in charitable giving:

Many foundations and non-profits run campaigns to increase public awareness of a particular issue and to motivate donations. Recently, some foundations have also begun thinking of their donations as a catalyst enabling a non-profit to raise even more funds from other donors. Similarly, non-profits often approach foundations seeking a gift that they can use to motivate other givers.

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Foreign Policy Magazine has released their "first annual" Top 100 Global Thinkers, and IPA Research Affiliate Esther Duflo has made the list.  She is recognized "for adding quantitative rigor to assessments of foreign aid."

Profiles the research and results of IPA Research Affiliates and the Jameel Poverty Action Lab, discussing results from work by Abhijit Banerjee, Rachel Glennerster, Esther Duflo, Pascaline Dupas, Michael Kremer, Edward Miguel, and Karthik Muralidharan.

Nicholas Kristof mentions the effectiveness of deworming, based on a study by IPA Research Affiliates, in a discussion of changing attitudes towards foreign aid. 

From the article: "Take education. Given the problems with school-building programs, donors have turned to other strategies to increase the number of students, and these are often much more cost-effective: (1) Deworm children. This costs about 50 cents per child per year and reduces absenteeism from anemia, sickness and malnutrition. A Kenya study found, in effect, that it is only one twenty-fifth as expensive to increase school attendance by deworming students as by constructing schools."

An estimated 2.2 million children under the age of 5 die from diarrheal diseases each year, according to the World Health Organization. Most of these diseases are thought to be preventable with improvements in sanitation, water quality, and hygiene. 

The grant will be used to study the effectiveness of small scale improvements in sanitation that could have big impacts.  Trials will occur in Bangladesh and in Kenya, where IPA Research Affiliate Michael Kremer will lead the research.

Read more about the grant in the full press release here.

IPA Research Affiliate David McKenzie co-authors an article debunking some common myths about the flow of skilled workers from poor home countries to wealthy ones.  Read the full article here. 

Innovations for Poverty Action will join a number of other active partners to complete the goals of the newly formed Center for Financial Literacy at Boston College.  The CFL's mission is to produce educational materials and programs that help people make reasonable financial decisions throughout their working lives and into retirement.

Read more here.

This Boston Globe article cites a paper by IPA president Dean Karlan and Research Affiliate Jonathan Zinman as well as a paper by IPA Research Affiliates Abhijit Banerjee, Esther Duflo, and Rachel Glennerster (with co-author Cynthia Kinnan) in its discussion of the impact of microfinance.

From the article:

"'Microcredit is not a transformational panacea that is going to lift people out of poverty,' says Dean Karlan, an economics professor at Yale and a co-author of one of the studies. 'There might be little pockets here and there of people who are made better off, but the average effect is weak, if not nonexistent.'”

"'I don't see this as a negative finding,' she [Duflo] says. When asked why she thinks microcredit didn't boost health and education outcomes, she says, 'I would really ask the question, ‘Why did we expect all these things to happen?' If you give people access to a financial instrument, it's like any other instrument. It's useful, but it's not like the miracle drug to end poverty.'"

Read the full article here.

IPA Research Affiliate Eldar Shafir discusses the book "Insufficient Funds: Savings, Assets, Credit and Banking Among Low-Income Households."  Research by Shafir and Sendhil Mullainathan, another IPA Research Affiliate, is featured in the book.

IPA Research Affiliate  Sendhil Mullainathan appeared as a witness in the recent Senate Banking Committee meeting “Creating a Consumer Financial Protection Agency: A Cornerstone of America’s New Economic Foundation”.

For more information and to watch the hearing live, click here (Mullainathan appears in the video at minute 151:45).

Coupling business training with microloans is a practice that is growing in popularity.  This article cites an IPA study in Peru led by Dean Karlan and Martin Valdivia which found that the business training program improved outcomes for borrowers and surprisingly had a larger effect for those that expressed less interest in training at the outset of the program.

Research Affiliate Esther Duflo writes about the benefits of keeping girls in school and how IPA's Ghana Secondary School Project for Girls works.  

IPA Research Affiliate Esther Duflo is profiled Australia.TO International Edition.

IPA partners with a rural bank in Agusan del Norte Philippines have started a savings program to help smokers kick the habit by encouraging smokers to deposit their would be cigarette money into a savings account instead.

Dean Karlan speaks to American Public Media's Marketplace about microfinance and the potential for creativity to make big impacts on poverty. The trick is to delineate between what sounds good and what really works.

Two Social Scientists, Dean Karlan and John List look at what makes people give to a particular charity at a certain time by testing donor responses to different solicitation letters.

Karthik Muralidharan expands on his dissertation research to determine how best to compensate teachers in India so they are accountable for their student's performance.

Dean Karlan named as one of 13 young economists doing work that is both highly respected among experts and relevant to the rest of us.