Evaluating The Hunger Project’s Epicenter Scale-Up Project in Eastern Ghana

Given the interconnected challenges poor families often face, many practitioners in international development believe that breaking the cycle of poverty in extremely poor communities requires a multi-faceted and participatory approach. In rural Ghana, researchers evaluated the impact of a community-driven development program on community members’ health, education, nutrition, livelihoods, access to finance, and local governance.

Policy Issue:

Very poor households often face a set of interconnected challenges that may keep them in extreme poverty. For example, malnourished children may have difficulty succeeding in school; families without financial services may turn to predatory lenders when cash-strapped; poorer, less educated households may be less likely to participate in politics and, in turn, gain political power. Given these interconnected challenges, many practitioners in international development argue that breaking the poverty cycle requires a multi-faceted and participatory approach, and that tackling multiple issues at once can have a “multiplier effect” and quicken the pace of development. Yet there is relatively little evidence on the effectiveness of these types of participatory community driven development programs.

Context of the Evaluation:

The international NGO The Hunger Project (THP) implements a community-driven development program called the Epicenter Strategy in eight countries across Africa. It aims to mobilize rural communities to lead a series of self-help initiatives to reduce their own hunger and poverty. The multi-year program features four phases: an initial mobilization phase in which THP provides training to mobilize communities to commit to creating positive change, a construction phase in which communities partner with THP to construct the epicenter building, and the program implementation stage, and the transition to self-reliance stage.

Each epicenter building houses a clinic, a microfinance bank, a three-acre farm, a food storage unit, and either a kindergarten or library. To construct the centers, communities must contribute in cash or in kind, while THP provides some construction materials. Once a center is constructed, it provides community programs that address health, food security, education, agriculture, and household finance needs. After several years of operation, THP transitions out of supporting the epicenter with the goal that communities will fully take over its operation.

Details of the Intervention:

Researchers evaluated the impact of THP’s Epicenter Strategy on 36 outcomes in eight areas: community mobilization; gender equality; food security; literacy and education; health and nutrition; water, environment, and sanitation; livelihoods and microfinance; and governance. The evaluation took place in 13 districts in eastern Ghana in which THP had not worked prior to the evaluation.

Each district was divided into roughly eight clusters of about 10,000 people each. Fifty-five clusters were randomly assigned to receive the Epicenter Strategy via public lottery and 50 were assigned to the comparison group. Researchers randomly selected 20 households from two villages within each cluster in both the treatment and comparison groups (approximately 3,800 households) and measured changes in these households well-being over a five-year period.

The intervention consisted of active promotion of epicenters in the treatment clusters, in which THP conducted workshops and outreach activities with village volunteers, construction of the centers, implementation of programs, and transitioning to self-reliance (in which THP withdraws support).

Results and Policy Lessons:

Results forthcoming.

Returns to Capital and MSE Management Consulting in Ghana

There are a number of development organizations in Ghana that provide services to micro and small enterprises (MSEs) seeking to expand their operations.  However, as there are few rigorous evaluations of entrepreneurial development programs, IPA is working with local consultants to undertake a rigorous study aimed at understanding the key factors that prevent MSE entrepreneurs from developing and expanding their businesses as well as identifying the value of providing consulting services to them. 
Policy Issue:
Microenterprises and small enterprises make up a large portion of employment in the developing world. As an alternative to employment in large firms in formal sectors, small enterprises create opportunity for the poor with few resources.  Despite implications for public policy, little is understood about the constraints of these small enterprises. It is unclear which factors prevent small businesses from expanding and employing more workers. This study focuses on two possible constraints, capital and business acumen, in assessing the potential for small business growth.
Context of the Evaluation:
In Ghana businesses of less than 99 workers (commonly called small or medium enterprises), employ around 66% of the nation’s work force[1].  These businesses are diverse in product offerings, ranging from agricultural produce to crafts to tourism services.  
Ernst and Young, a professional services firm, works in assurance, tax, transaction, advisory services and strategic growth markets.  Around the globe, Ernst and Young works with a range of organizations to provide consulting services, in this case tailors in Ghana. The entrepreneurs participating in the study were diverse: 57% of them were female, they came from 26 different ethnic groups, and spoke 12 different languages at home.  The businesses they operated were in general very small- all had less than 5 employees, and 35% of them had no employees at all.
Description of Intervention:
IPA partnered with Ernst and Young to offer business consulting services to small businesses in the city of Accra. Out of a group of 157 tailors, 77 were randomly selected to receive one year of free consulting services while the others served as a comparison group.  Four consultants from Ernst and Young met with twenty tailors each between February 2009 and February 2010.  Each tailor received an average of ten hours of consulting over the course of the intervention, with the consultants visiting each tailor two to three times per month. All tailors received thirteen training modules on topics like record keeping, time management, and costing, in addition to individualized mentorship.  After six months, a randomly selected38 tailors who were receiving the consulting and 36 additional tailors in the comparison group were awarded a grant of 200 Ghana Cedi (about $133 US) to invest in their businesses.  Eight rounds of surveys were administered to measure the impact of the consulting services, the cash investment, and the combination of the two.
Results and Policy Lessons:
Results forthcoming.

[1]Kozak, Marta “Micro, Small, and Medium Enterprises: A Collection of Published Data,” http://rru.worldbank.org/Documents/other/MSMEdatabase/msme_database.htm.

Examining the Effects of Crop Price Insurance for Farmers in Ghana

Policy Issue:
Many small-scale farmers in the developing world face significant income uncertainty, and rural farmers who live from harvest to harvest don’t have much room for error. Variables beyond the farmers’ control, such as fluctuating crop prices, can make a significant difference in how much a family earns for the year.  Farmers may be unwilling to take on additional risks by borrowing and making long-term investments due this uncertainty. This reluctance is thought to contribute to the decision of many farmers not to invest in technologies such as hybrid seeds, fertilizer, or irrigation that could potentially improve crop yields. Many lenders are also extremely wary of extending credit to farmers, fearful that they will inherit the risks inherent to farming. Crop price insurance could help solve this problem, reducing the risk to farmers and providing them with encouragement to make investments in their farms. Lenders, too, may feel more confident in lending to farmers with greater income certainty, facilitating even more capital investments.
Context of the Evaluation:
In Ghana, 50 percent of the rural population lives in poverty. In the Eastern Region where Mumuadu Rural Bank (MRB) operates, an estimated 70 percent of households make a living in the agricultural sector, but agricultural loans make up only 2 percent of the bank’s loan portfolio. Focus groups with maize and eggplant farmers in the area revealed that farmers were hesitant to borrow for fear that fluctuations in crop prices could force them to default. Rainfall fluctuations, typically an important source of risk for farmers, are not a great concern in this part of Ghana. The prices offered for traded crops, however, do fluctuate greatly. Information gathered in baseline surveys suggested that there was a potential but untapped market for crop price insurance: farmers in the area served by MRB expressed that they would be willing to pay to guarantee a certain minimum crop price. Despite this encouraging baseline finding, banks and insurance providers face the challenge that insurance is not a commonly understood concept among farmers in the region.
Details of Intervention:
Researchers developed an agricultural loan product in coordination with MRB that had an insurance component that partially indemnified farmers against low crop prices. Specifically, if crop prices at harvest dropped below a set price floor (the 10th percentile of historical prices for eggplant and the 7th percentile for historical maize prices), the bank would forgive 50 percent of the loan and interest payments. Borrowers were not required to pay any premium for the insurance product. The goal of incorporating insurance into the loan product was to reduce farmers’ risk in borrowing to invest in agriculture inputs. The intervention targeted maize and eggplant farmers in particular because the crops are both commonly grown in the region and subject to volatile (but historically well documented) prices.
Standard Mumuadu procedure is to invite farmers to meet in a group with Mumuadu employees to discuss the bank’s financial services, and to encourage farmers to come to a branch to apply for a loan. The average loan size is approximately US$159, which represents a significant change in cash flow for the borrower. For this project, Mumuadu employees approached community leaders to obtain a list of all maize and eggplant farmers in the village. The same community leaders then invited farmers to attend one of the bank’s information sessions. Farmers on the list were randomly assigned to one of four groups, each of which received a variation on the Mumuadu marketing pitch. The four groups were:
  1. Farmers who were offered the standard Mumuadu loan product;
  2. Farmers who were offered the Mumuadu loan product with complimentary crop price insurance;
  3. Farmers who received financial literacy training, before being offered the standard Mumuadu loan product;
  4. Farmers who received financial literacy training, before being offered the Mumuadu loan product with complimentary crop price insurance.
Prior to the marketing of the loans, Mumuadu employees conducted a survey of the farmers, gathering information relating to their credit history, risk perception, financial management skills, and cognitive ability. An analysis of baseline data, bank administrative data, and a followup survey that focused on farmer investment decisions allowed researchers to draw conclusions on the effect of crop price insurance on borrower behavior and agricultural investment in Ghana.
Take up of loans among farmers was quite high, with 86 percent of farmers in the comparison groups choosing to borrow and 92 percent of farmers in the treatment groups taking out a loan.  This high take up across both treatment and control groups made an analysis of the features that predicted take up difficult.  In fact, the researchers found no systematic difference across the treatment and control groups when considering which features predicted borrowing. Overall, those who borrowed tended to be older, with higher scores on tests of cognitive ability.  They were also more likely to have a record of previous borrowing.  
Apart from predictors of borrowing, researchers were interested in whether crop price insurance changed farmers’ investment behavior. There is evidence that it did, but not overwhelmingly. The small sample and high take up across both groups may have played a role in this outcome. Farmers offered the insurance spent 17.9 percentage points more on agricultural chemicals (mostly fertilizer) than those who had not been offered the product. There was also a trend towards growing more eggplants and less maize among these farmers. Farmers offered the insurance were also between 15 and 25 percent more likely to bring their produce to markets rather than sell to brokers who come to pick up the crop. Anecdotally, it is believed that the so-called “farmgate” sellers offer guaranteed purchase contracts, but at lower prices locked in before harvest. Selling in the market, on the other hand, is a potentially more profitable but riskier option.  
There are a number of potential reasons why the researchers did not find large effects of the crop price insurance product on either or take up or investment, and further research in necessary to determine their roles. It is uncertain, for example, whether farmers truly understood the benefits of the insurance. Farmers may also have been reluctant to make long term investments changes before an insurance product demonstrates an established presence in the area. Alternatively, crop price uncertainty may not be as important of an indicator of investment decisions as previously thought. Further research, with a larger sample size, is needed to better understand the roles of risk, financial literacy, and product design in determining microinsurance impact.

Evaluating Village Savings and Loan Associations in Ghana

What type of people participate in Village Savings & Loan Programs (VSLAs)? What impact do these programs have on households and communities?

Policy Issue:

Although during the last decades microfinance institutions have provided millions of people access to financial services, provision of access in rural areas remains a major challenge. It is costly for microfinance organizations to reach the rural poor, and as a consequence the great majority of them lack any access to formal financial services.  Traditional community methods of saving, such as the rotating savings and credit associations called ROSCAs, can provide an opportunity to save, but they do not allow savers to earn interest on their deposits as a formal account would.  In addition, ROSCAs do not provide a means for borrowing at will because though each member makes a regular deposit to the common fund, only one lottery-selected member is able to keep the proceeds from each meeting.

Village Savings and Loan Associations (VSLAs) attempt to overcome the difficulties of offering credit to the rural poor by building on a ROSCA model to create groups of people who can pool their savings in order to have a source of lending funds.  Members make savings contributions to the pool, and can also borrow from it.  As a self-sustainable and self-replicating mechanism, VSLAs have the potential to bring access to more remote areas, but the impact of these groups on access to credit, savings and assets, income, food security, consumption education, and empowerment is not yet known. Moreover, it is not known whether VSLAs will be dominated by wealthier community members, simply shifting the ways in which people borrow rather than providing financial access to new populations.

Context of the Evaluation:

The Northern region of Ghana is one of the least developed parts of the country.   The majority of its residents make their living in agriculture.  Services including mail delivery, telephone, and medical clinics are very limited in this sparsely populated part of Ghana.

Description of Intervention:

In Ghana, researchers are working to measure the dynamics of self-selection with VSLAs.  This study is conducted with 180 communities selected by our partner, CARE, after being identified as villages in which VSLA programs could be initiated.  Ninety villages were randomly selected to receive the VSLA intervention, and the remaining 90 villages are used for comparison.  For those villages randomly assigned to receive the intervention, a CARE representative will enter the village to meet with residents and begin to form VSLAs there.  Interested participants form groups of 15 to 30 community members, pooling their capital to create a fund from which members can borrow.  Members pay back loans with interest, and savings also earn interest, with the rates determined by the group at its founding.  The CARE representatives initiate the formation of new VSLAs, but the eventual goal of the intervention is to provide the community with the capacity to make these groups self-sustaining by providing training on initiation and administration of new VSLAs.

Three years after full implementation, a follow up survey will allow researchers to understand who chooses to participate in VSLAs in Ghana, as well as how their lives may be affected as a result.  

Results and Policy Lessons:

Results Forthcoming.

We are also working with CARE to evaluate their VSLA programs in Malawi and Uganda.

Savings Account Labeling for Susu Customers in Ghana

IPA is working with Mumuadu Rural Bank (MRB) to study the response to and impact of a new account labeling savings product. Working with Susu customers and Susu agents, the study compares the success of this new product with the current Susu savings product. The new savings product has only a psychological difference: it allows the labeling of funds within an account so that deposits can be directed to a specific goal, such as health, education or business savings.
Policy Issue:
Saving is hard for most people, rich or poor, educated or not. Setting aside even small sums of money on a regular basis requires a conscious trade-off between buying something now in favor of achieving long-term goals, and even the most prosperous struggle to translate this intention into sustained savings. Saving may be especially difficult for poor individuals, as daily needs and family obligations may distract attention from meeting savings goals.
Poor individuals not only have less income, but often face additional barriers to savings. They tend to be the least educated about their financial options, have the least access to secure financial institutions and are the least able to afford financial mistakes. Due to a variety of challenges, savings rates are quite low across the developing world and individuals often go into debt to maintain family well-being.
Context of the Evaluation:
Ghana's Eastern Region has a vibrant microfinance sector populated by a wide range of formal and informal institutions, and uniquely characterized by a prevalence of "Susu" collectors: traditional savings collectors who walk a daily path through town to collect Susu, "small small moneys", from their customers. Typically, Susu collectors return the funds to their customers at the end of the month in exchange for one day’s worth of collections.
As banks moved into rural areas, they have formalized Susu collection, paying their agents on commission and not charging their customers a direct fee for the service. Competition between banks is highly visible in the urban marketplaces where Susu agents, clothed in the bright batiks of their respective institutions, fight for the patronage of the same group customers.
Description of Intervention:
Researchers collaborated with Mumuadu Rural Bank (MRB) in the Eastern Region of Ghana to test the impact of a new type of savings account aiming to help clients save by focusing attention on savings goals. The evaluation seeks to understand if a purely psychological savings product, which encourages customers to earmark account funds for a specific financial goal, increases savings rates.
Study participants were active savings customers of Susu agents at Mumuadu Rural Bank in five urban and rural communities across Eastern Region in Ghana. Among them, half were randomly selected to receive an offer of the labeled savings account, while the remaining customers continued to access existing savings services from the bank. The new labeled account shared all the characteristics of the regular Susu account with the addition that customers could “label” funds for particular expenditures, such as buying a house or paying children’s school fees. After labeling the account, customers stated how much they planned to save over the next six-month period. The bank provided each customer with a free passbook that had the personal savings goal written on the front as a reminder.
Mumuadu Rural Bank staff were responsible for maintaining the accounts once they had been opened and Susu agents continued their normal rounds, collecting funds for the labeled account alongside the regular Susu savings accounts. Researchers tracked the take-up of the new product and savings activity over six-months among all participating customers.
Preliminary Results:
Preliminary results found that customers with a labeled Susu savings account show a 31.2 percent increase in total deposits after nine months of account operations as compared to Susu customers without the labeled account. This increase is statistically significant across the five study branches, though the effect size varied in each community.
Over the study period, withdrawals by customers with the labeled account were not significantly higher than customers without the labeled account, indicating that these funds provided a stable source of additional capital for Mumuadu Rural Bank. While customers with labeled accounts showed greater savings rates, there was no difference in their expenditure patterns from regular Susu customers.
Additional data is currently being collected and analyzed to determine if these impacts are sustained and if there are identifiable trends in the timing of deposits and withdrawals.

Clean Water in Northern Ghana

This study assesses the willingness of households in Northern Ghana to purchase a ceramic water filter. The Kosim filter is sold by Pure Home Water (PHW), a Ghana-based NGO, and has been demonstrated to be highly effective at improving water quality without needing electricity. We will also measure the health effects of household-level water treatment in areas with high waterborne disease loads.  

Policy Issue: 

Diarrheal diseases, which result poor water quality, are a leading cause of death in the developing world, killing approximately 1.8 million people per year. Achieving the Millennium Development Goals of reducing the proportion of people without sustainable access to safe drinking water is especially difficult for the rural poor. Delivering treated water through pipes has resulted in sustained health gains in developed countries and urban areas in developing countries, but is not considered feasible in rural areas with dispersed populations and weak institutions for maintenance. Community interventions, such as spring improvement or communal wells, have not produced strong results, and policy makers are increasingly interested in household and point of use treatments. However, the effectiveness of such treatments in rural environments, the role of education and marketing to encourage use, and how to expand access with limited resources remain largely unknown.

Context of the Evaluation: 

Diarrheal diseases account for 12% of childhood deaths in Ghana, and are the third largest cause of death for children under the age of 5. These diseases are caused by the ingestion of water contaminated by fecal matter, and 20% of Ghana’s population does not use an improved water source. The sparsely populated northern region of Ghana is one of the least developed parts of the country, and has even less access to clean water than the national statistics would suggest. The majority of its residents make their living in agriculture, living far away from one another. This low population density makes any state- or community-wide water treatment intervention costly and impractical.

Details of the Intervention: 

This study will evaluate the demand, use, and impacts of one household level water treatment technology. The Kosim filter is a ceramic filter marketed and sold by Pure Home Water, a Ghana-based NGO. This simple product has been proven to be highly effective at improving water quality and is appropriate for the region, since it removes particles and pathogens from water without the use of chemicals or electricity which require some form of delivery.

Researchers are measuring the willingness to pay of households for the Kosim filter by offering a random selection of households the opportunity to purchase the filter through door-to-door sales. Households will also be offered a randomized price for the filter, to determine price effects and willingness to pay for preventive health technologies.

Researchers will collect data from 1,500 households on water quality, education, income, consumption, health, diarrhea disease knowledge and water treatment and storage practices to see how these variables affect the willingness to pay for a filter. The randomized offer price provides a means to estimate the filter’s health impact and health spillovers among neighbors, without letting a set price screen out households who have a lower value for clean water. Thus, researchers can evaluate different techniques for creating behavioral change, such as the adoption of new water treatment technologies and storage techniques, and the propensity of individuals to drink treated water and provide treated water to their children.

Results and Policy Lessons: 


[1] As of 2004. WHO, “The Top Ten Leading Causes of Death” (accessed Nov. 6, 2009)

[2] WHO, “Mortality Country Fact Sheet 2006, Ghana.” (accessed Nov. 6 2009)

[3] United Nations, Human Development Report 2009 "Ghana" (accessed Nov. 6, 2009)

Graduating the Ultra-Poor in Ghana

More than one fifth of the world’s population lives on less than US$1.25 per day. While many credit and training programs have not been successful at raising income levels for these ultra-poor households, recent support for livelihoods programs has spurred interest in evaluating whether comprehensive “big push” interventions may allow for a sustainable transition to self-employment and a higher standard of living. To test this theory, in six countries researchers evaluated a multi-faceted approach aimed at “graduating” the ultra-poor from poverty. They found that the approach had long-lasting economic and self-employment impacts and that the long-run benefits, measured in terms of household expenditures, outweighed their up-front costs. Here we summarize the Ghana site, which had similar effects as the other successful sites.

Policy Issue:

More than one fifth of the world’s population lives on less than US$1.25 per day. Many of these families depend on insecure and fragile livelihoods, including casual farm and domestic labor. Their income is frequently irregular or seasonal, putting laborers and their families at risk of hunger. Self-employment is often the only viable alternative to menial labor for the ultra-poor, yet many lack the necessary cash or skills to start a business that could earn more than casual labor.

In the past, many programs that have provided ultra-poor households with either credit or training to alleviate these constraints have not been successful at raising household income levels on average.  However, in recent years, several international and local nongovernmental organizations have renewed their support for programs that foster a transition to more secure livelihoods. Combining complementary approaches—the transfer of a productive asset, training, consumption support, and coaching— into one comprehensive program may help spur a sustainable transition to self-employment. To better understand the effect of these programs on the lives of the ultra-poor, researchers conducted six randomized evaluations in Ethiopia,  Ghana, HondurasIndiaPakistan, and Peru.

Context of the Evaluation:

In Ghana, researchers partnered with implementing organizations Innovations for Poverty Action and Presbyterian Agricultural Services (PAS). The study took place in in the Northern and Upper East regions of Ghana, a region that is disproportionately poorer than the coastal south. Fifty-three percent of households in the study were living on US$1.25 a day or less when the study began, compared to 29 percent in Ghana as a whole. 

To select the poorest members of the communities, the project team conducted a Participatory Wealth Ranking, in which villagers collectively ranked households according to their wealth during a community meeting. PAS conducted a short survey afterwards to verify the results of the ranking.

Details of the Intervention:

Researchers conducted a randomized evaluation to test the impact of a two-year comprehensive livelihoods program (“the Graduation approach”) on the lives of the ultra-poor in northern Ghana. The approach was first developed by the Bangladeshi NGO BRAC in 2002 and has since been replicated in several countries. The Graduation program consisted of six complementary components, each designed to address specific constraints facing ultra-poor households:

In Ghana, researchers first randomly assigned villages composed of a total of 2,606 households, to one of two groups. One group served as a pure comparison group and was not offered the program. In the other group, 666 households were randomly assigned to receive the program. The other half of the households in that group did not receive the program, and served as a sub-comparison group to measure “spillover” effects on non-participating households living nearby. The program consisted of six complementary components, each designed to address specific constraints facing ultra-poor households:

1. Productive asset transfer:One-time transfer of a productive asset valued at GHS 300

(2014 PPP US$451). Forty-four percent of participants chose goats and hens, roughly a quarter picked goats and maize inputs, and small number picked shea nuts and hens (6 percent). 

2. Technical skills training: Training on running a business and managing their chosen livelihood. For example, households who selected livestock were taught how to rear the livestock, including vaccinations, feed and treatment of diseases.

3. Consumption support: During the lean season (14 out of 24 months), households received weekly cash transfers of GHS 4-6 (2014 PPP US$6.02- 9.03), depending on household size.
4. Health: Households were enrolled in the National Health Insurance Scheme and received health and nutrition education.                                                                                                  5. Savings account: Half of the Graduation households received savings accounts through the Savings Out of Ultra Poverty (SOUP) program, also implemented by PAS. When PAS staff  made their weekly visits, they collected deposits and households logged deposits.                       6. Households visits: Weekly visits by PAS staff to provide to provide accountability, coaching, and encouragement.

In order to test the relative effectiveness of the savings and asset transfer component, the researchers also randomly assigned a portion of households (733 households) to only receive the SOUP program, while another portion (329 households) only received the asset transfer component of the program. Half of those in the SOUP program (362 households) received a 50 percent match on their savings to test the impact of incentives to save.

Researchers conducted the first endline survey immediately after the two-year program ended, as well as a second endline survey around one year later.

Results and Policy Lessons:

Note: Results forthcoming from the relative effectiveness of the savings component (with and without incentives) and an asset transfer-only treatment.

Across all six countries, researchers found that the program caused broad and lasting economic impacts. Treatment group households consumed more, had more assets, and increased savings. The program also increased basic entrepreneurial activities, which enabled the poor to work more evenly across the year. While psychosocial well-being improved, these noneconomic impacts sometimes faded over time. In five of the six studies, long-run benefits outweighed their up-front costs. In Ghana, households that received the Graduation program saw similar effects one year after the program ended:

Economic impacts: Average total monthly consumption among treatment households was 2014 PPP US$33.62, an 11 percent increase over households in the comparison group. They spent $22.41 on food every month on average, 12 percent more than the comparison group.Households saw significant increases in asset holding and borrowed 58 percent more than those in the comparison group (2014 PPP US$35.60 monthly average), They also saved 2014 PPP US$16 a month on average, which was three times more than households in the comparison group.

Self-employment:Households experienced a 91 percent increase in non-farm income, earning 2014 PPP US$12.86 on average, as well as significant gains in livestock revenue, earning 2014 PPP US$40.60 a month on average, or 50 percent more than the comparison group.

Psychosocial wellbeing:Households that participated in the program did not report feeling significantly less stressed or happier than households in the comparison group.

Political involvement:Women in treatment households did not experience significant gains in empowerment in Ghana, and in fact experienced significantly less power in decisions about food in the household. However, treatment households did participate in more community meetings than those in the comparison group.  

Cost-benefit analysis:. Researchers calculated total implementation and program costs to be US$1,777 per household (2014 PPP US$5,408). However, estimated benefits of consumption and assets growth amount to 2014 PPP US$7,175 per household, representing an overall 133 percent return on investment.

Evaluating the Efficacy of School Based Financial Education Programs

Could financial literacy training for children lay a foundation for good financial decisions and a better quality of life in adulthood? If so, what type of training works best? In this study, IPA partnered with Aflatoun, a Dutch non-governmental organization, to evaluate the impact of two forms of financial education on primary school children across Ghana. 

Policy Issue:

Research on financial knowledge and behavior indicates that individuals in both developed and developing countries around the world lack adequate knowledge to make informed financial decisions. In response to evidence that financial literacy is correlated with well-being, many service providers, donors, and policymakers have begun including financial training and business education as part of their broader anti-poverty strategies. Intuitively, financial education provides useful tools to people of all ages, yet empirical evidence for this impact is meager and often mixed. This project tests two financial education curricula for primary school students. Specifically, it measures the impact of financial education on student behavior attitudes, and outcomes.

Context of the Evaluation:

Saving and finances are part of daily life for many youth, yet traditional school curricula often overlook the specific issues and challenges students encounter with money. This curricular gap represents a missed opportunity for students and teachers. Aflatoun, a Dutch non-governmental organization providing social and financial education to 540,000 children in 33 countries, operates a voluntary after school club in Ghana for primary and junior high schools. Aflatoun uses a uniquely designed “social and financial education curriculum” to improve children’s saving habits as well as financial attitudes and self-esteem. Aflatoun’s training on handling money, saving on a regular basis, and spending responsibly aims to teach children, at a young age, lessons and behaviors that they will carry with them throughout their lives.

Aflatoun operates in collaboration with local partners to implement its programs. Two project partners in Ghana - the Women and Development Project (WADEP) and the Netherlands Development Organization (SNV) - trained instructors and managed program implementation. SNV Ghana worked with three other implementing partners in two regions to train teachers and monitor the implementation of clubs: Berea Social Foundation (Western Region), Support for Community Mobilization Projects and Programs  (Western Region), and Ask Mama Development Organization (Greater Accra Region).

Details of the Intervention:

The study included 5,000 primary school students aged 9 - 14 in 135 public schools in semi-urban and rural Ghana, including 30 schools in Greater Accra, 60 in Volta, and 45 in Western District. One-third of the schools in each region were randomly assigned to each of three different groups: the Aflatoun program, Honest Money Box (HMB) intervention, or a comparison group without treatment.

The Aflatoun curriculum includes lessons about planning, budgeting, saving, proper spending, as well as self-esteem building exercises. It uses songs, games, and worksheets, which put children at the center of the learning process. Aflatoun also adapts its messages and activities to the context of the countries in which it operates, focusing on cultural heritage and community in order to foster a collective sense of empowerment among participant children. The HMB intervention, in contrast, is solely focused on financial education and is designed to provide a comparison for Aflatoun’s unique social and attitudinal curriculum. IPA developed the HMB intervention as a group savings scheme with a financial literacy curriculum. Some of the topics covered in the curriculum include: What is Money?, Saving and Spending, Planning and Budgeting, and Entrepreneurship, as well as lessons in how to use the Money Box, a lockbox that stores group savings.  

To implement the two programs, local partner organizations trained approximately 200 teachers (two teachers in each selected school). Teachers instructed two multi-grade clubs, with an average of 54 students per club, and delivered the assigned curriculum, in addition to providing a secure storage space for the money saved, generally in the teacher’s locked office. Clubs met, on average, once a week after school at a time decided by the members. Students saved money from their pocket change and recorded transactions on individual passbooks. IPA and partner organizations monitored the teachers to ensure that implementation met pre-determined standards.

The evaluation was conducted over the course of one school year.  Between 20 and 40 children per school were chosen to be surveyed.. The baseline survey  was conducted in September 2010 and the endline in August 2011. The surveys collected data on financial well-being of students and their families, cognitive function, and perspectives on savings and time and risk preference. The endline survey captured the same information as the baseline, in addition to a financial education endline assessmentand a psychosocial module to understand students’ outlooks and levels of self-control.


The surveys used are available here in .doc format:

Baseline Student Survey

Aptitude Assessment

Shop Games


Presentation from the “Impact and Policy Conference” in Bangkok, September 2012.

Analysis is ongoing, results forthcoming.



Communication for Development in Ghana

A large number of child deaths in Sub-Saharan Africa are due to causes that are preventable through improved health behavior. In Ghana, researchers are evaluating the impact of a health communications program, which includes in-person, radio, and mobile phone interventions, on five key health behaviors.

Policy Issue:

Substantial progress has been made worldwide in reducing child deaths over the last 25 years, yet on average 17,000 children under five still die every day, mostly from preventable causes and treatable diseases.1 Sub-Saharan Africa has the highest child mortality rate relative to other regions—92 deaths per 1,000 live births. The leading causes of death among children are preterm birth complications, pneumonia, complications during labor and delivery, diarrhea, and malaria.  Promoting positive health behaviors through communications campaigns, including home visits by community health workers and radio broadcasts, may increase demand for services and products that can reduce the risk of preventable disease and death, such as antimalarial bed nets and oral rehydration salts. Moreover, given the growth of mobile phone ownership in the past decade, and evidence that individuals respond to mobile phone message reminders, text messages may serve as a cost-effective way to deliver key health messages and change behavior. This research in Ghana aims to shed light on these topics.

Context of the Evaluation:

Infectious diseases and malnutrition are major public health problems in Ghana. In 2008, 14 percent of children under five were underweight and 28 percent were stunted, and  malaria was the leading cause of death nationwide. In response, UNICEF and the Ghana Health Services, an agency within the Ministry of Health, launched the Communication for Development (C4D) program in March 2012 to increase awareness of common health problems in Ghana and reduce the risk of diseases and death, particularly for children under five.

Details of the Intervention:

Researchers are conducting a randomized evaluation to measure the impact of the basic C4D program and an expanded version with a mobile phone component (M4D) on five key behaviors:

1.     Exclusive breastfeeding for the first six months of life

2.     Hand washing with soap

3.     Sleeping under an insecticide-treated bed net to prevent malaria

4.     Treating diarrhea with oral rehydration solutions

5.     Using a skilled birth attendant

The basic C4D program promotes these behaviors through home visits and counseling by community-based agents (CBAs), radio broadcasts, and theater dramas. IPA partnered with VOTO mobile to develop and implement a mobile messaging component to complement the program, called Mobile for Development, or M4D. With M4D, mobile phone messages are sent to mothers of children under five to encourage the five health behaviors.

Of the 216 communities in the study, 108 were randomly assigned to receive various combinations of the interventions of the C4D program. Additionally, 2,380 households with cell phones were enrolled in the M4D sub-study evaluating the impact of voice messages sent to mobile phones. Mothers receive a total of 15 unique messages on the five key behaviors.

IPA is collecting data from approximately 20 households in each of the 216 communities, or approximately 4,269 households total. Researchers will measure the program’s impact on awareness, knowledge, behavior change, and continuous use across the five behaviors.

Results and Policy Lessons:

Results forthcoming.

[1]UNICEF, “Level and Trends in Child Mortality.” Report 2014. Retrieved March 11, 2015: http://data.unicef.org/corecode/uploads/document6/uploaded_pdfs/corecode/Child_Mortality_Report_2014_195.pdf


Investigating Rural Labor Markets Among the Ultra-Poor in Northern Ghana

Few subsistence farmers engage in paid labor, even when pursuing these opportunities would enable them to earn more and protect against risk. A variety of factors may influence this trend, including poor nutrition, the complexity of the work, and lack of access to financial services. Researchers designed an employment program in northern Ghana and evaluated participants’ willingness to engage in paid labor and carry out complex tasks on the job.

Policy Issue:

Self-employed farmers in sub-Saharan Africa may earn more by engaging in wage labor, but few pursue off-farm opportunities, forgoing higher and more predictable incomes. There are a number of possible explanations for this trend, including lack of information about job opportunities or high transportation costs to get to work sites. The choice to engage in wage labor may also be affected by the wage level, the complexity of the work, or an individual’s nutrition status. For instance, farmers may only be willing to pursue wage labor above a certain wage threshold, or they may find the tasks too complex or onerous to complete.  Poor nutrition could also make workers less productive and, thereby, more costly to hire. Rigorous research is needed to disentangle the various mechanisms that affect individuals’ choices to engage in wage labor.

Context of the Evaluation:

Subsistence agriculture is the main economic activity for the vast majority of rural households in Ghana. Researchers introduced an employment program in communities in northern Ghana that were already participating in an ultra-poor graduation program. The two-year Graduation from Ultra Poverty (GUP) program, originally developed and evaluated in Bangladesh, offers a comprehensive package of services (productive assets, consumption support, financial literacy training, and healthcare) to households living in extreme poverty.

A random subset of participants in GUP was assigned to a voluntary savings program called Savings Out of Ultra Poverty (SOUP), in which clients had the opportunity to earn a 50 percent match on their savings.

Researchers partnered with Presbyterian Agricultural Services (PAS) and Innovations for Poverty Action (IPA) to implement GUP and SOUP in 155 communities in northern Ghana.

Details of the Intervention:

Researchers introduced an employment program in communities in northern Ghana that were already receiving GUP and SOUP or part of the comparison group for the GUP evaluation.  Half of all GUP, SOUP, and comparison villages were randomly selected to participate in an 11-month employment program that offered wages for the production of cloth bags.  This amounted to 120 villages: 42 comparison villages, 39 GUP villages, and 39 SOUP villages (1,098 households total).

Researchers randomly varied the complexity of the bag design and wage per bag to understand the impact of these factors on individuals’ decisions to engage in paid labor and whether willingness to engage in complex tasks depended on the wage level. Of the 120 villages assigned to the bags program, 60 were assigned to produce a simple bag and 60 were assigned to produce a complex bag, based on the difficulty of the stitching required. Participants were randomly assigned to receive either a high wage of GHC 0.70 (approximately US$0.39) or a low wage of GHC 0.30 (approximately US$0.16), and the wage assignment switched every four weeks.

Communities received all sewing materials and a four-day training on how to produce the bags prior to the start of the employment program. Program facilitators carried out regular quality checks to assess how well the simple and complex bags produced met the pre-determined quality standards. Within each wage category, participants could earn an additional GHC 0.10 more per bag for producing a high quality bag or lose GHC 0.10 per bag for producing a low quality bag.

Results and Policy Lessons:

Results forthcoming.


Text Message Reminders for Malaria Treatment

Only one drug—artemisinin—is fully effective in treating malaria in Sub-Saharan Africa, and is therefore central to the global fight against malaria; however, many patients do not complete the full course of malaria treatment. Non-adherence may increase the risk of drug resistance, greatly undermining efforts to combat the disease. This randomized evaluation in northern Ghana was a first attempt to evaluate the impact of text message reminders to patients on adherence to malaria treatment. Results indicated that text message reminders increased adherence to ACT treatment by five percentage points on average, relative to the comparison group. Further research is needed to develop the most effective text message content and frequency, and to shed light on why people fail to complete their medication.

Policy Issue:

In 2013, malaria killed more than 600,000 people across the globe – over half of them children under five [2]. Despite massive international efforts over the past decades to combat the disease, malaria remains a primary cause of death of young children worldwide. The great majority of global deaths from malaria—92 percent—occur in Sub-Saharan Africa [3]. The majority of malaria deaths in Africa are caused by the most virulent malarial parasite, P. falciparum. The parasite has already developed widespread resistance to several classes of antimalarial drugs, leaving artemisinin-based combination therapies (ACTs), as the only fully effective treatment for malaria in the region. Patients must complete their full course of medication to prevent resistance, but many stop taking the drugs once they feel better. There is already evidence of P. falciparum resistance to artemisinin in Southeast Asia. Public health experts are deeply concerned resistance will also develop and spread in Africa.

This study investigates the impact of text message reminders on ACT treatment completion. The Clinton Health Access Initiative, the main partner in this evaluation, is using results from this study, and related studies in Uganda (see here and here), Kenya, and Zambia to inform global policy on malaria diagnosis and treatment.

Context of the Evaluation:

Malaria is a main cause of illness in Ghana, especially among young children. Two programs have increased patient access to ACTs to treat malaria. First, Ghana was a pilot country for the Global Fund’s Affordable Medicines Facility – malaria (AMFm), which aimed to expand access to ACTs by highly subsidizing their cost. Second, Ghana has been rolling out a National Health Insurance Scheme since 2004, which allows registered members to receive ACTs free of charge. This study took place in and around Tamale, the capital of Ghana’s Northern Region.

Details of the Intervention:

This randomized evaluation, carried out among 1,140 participants over a five-month period in 2011, evaluated the impact of text message reminders on whether patients finished their ACTs.

IPA surveyors recruited participants at public and private hospitals, clinics, pharmacies, licensed chemical sellers, and other vendors. Vendors identified individuals purchasing malaria medicine, gave them a flyer with instructions to enroll in a mobile malaria information system, and directed them to surveyors. The surveyors administered an initial questionnaire to willing and eligible participants .

Those who enrolled in the text messaging system were randomly assigned to one of the treatment groups or the comparison group. Participants randomly assigned to the one of the treatment groups received one reminder every 12 hours (for each of the six doses of ACT) over the course of 60 hours. Half received a short message, “Please take your MALARIA drugs!” and the other half received the same message with an additional statement, “Please take your MALARIA drugs! Even if you feel better, you must take all the tablets to kill all the malaria.” The 538 participants in the comparison group received no message during this period.

IPA surveyors followed up with all patients in their homes between three and four days after talking with IPA at the vendor, when the course of the ACT treatment was supposed to be completed. Surveyors assessed adherence by gathering a detailed self-report. They supplemented this information with a full inventory of drugs in the household and by asking to see the leftover ACT pill packet. IPA also asked respondents about malarial symptoms, care-seeking patterns, awareness of malaria, and malaria medications.

Results and Policy Lessons:

Results indicated that simple text message reminders increased the odds of adherence to ACT treatment by five percentage points relative to the comparison group. Receiving a longer message did not have a significant impact relative to the comparison group.

Of the 538 participants in the comparison group, 61.5 percent reported treatment completion. Of the 572 participants in the treatment group, 66.4 percent reported treatment completion. Of the participants that received the longer message, 64.1 percent completed their treatment, which was not a statistically significant impact.

The impact of the text message reminders varied across different groups. For example, the short text message reminder more than doubled the odds of adherence among women but did not having a statistically significant impact on adherence among men. Among participants from private clinics, the text message reminder increased completion by 14 percentage points, whereas among patients from public hospitals, the increase was less than 2 percentage points in relation to the comparison group.

In short, the results of this study suggest that a simple text message reminder can increase completion antimalarial treatment, which is important both for patients being fully cured as well as maintaining the efficacy of ACTs for everyone. Further research is needed to develop the most effective text message content and frequency.

Read more about this study in the journal PLOS ONE, here.


The researchers would like to thank the Clinton Health Access Initiative, Jessica Cohen, Emmanuel Okyere Jr., Jessica Kiessel, Pace Phillips, Suvojit Chattopadhyay, Carolina Corral, Mollie Barnathan, Usamatu Salifu, Becky Antwi, and the entire IPA-Ghana team for their invaluable contributions to the project. They also wish to thank the host vendors and the patients for taking part in the study.


Examining Underinvestment in Agriculture: Returns to Capital and Insurance Among Farmers in Ghana

Risk, rather than a lack of capital, appears to drive underinvestment in agriculture in Northern Ghana - when farmers were provided with weather insurance they spent more on inputs such as chemicals, land preparation, and labor.

Policy Issues:

Underinvestment in agricultural inputs such as fertilizer, hybrid seeds, or labor is thought to drive low crop yields in Africa and other parts of the developing world. Several factors may help explain why farmers fail to invest in such potentially profitable inputs. It is possible that they are wary of the riskiness of adopting new agricultural methods or tools—if they invest and their crops still fail, they will have even less money than if they had not invested at all. Farmers may also lack the capital necessary to purchase these inputs, and be unable to obtain credit to finance investment in their farms. Because the returns to using new technologies can be so high, encouraging use among farmers has the potential to greatly improve their welfare, but financial institutions and policymakers need to first understand what factors are truly driving underinvestment in agriculture.


The climate of northern Ghana’s savannah region has a single short wet season, with high annual variation in rainfall. This kind of weather pattern creates great risk for farmers who depend on the weather for their livelihood, particularly when agriculture is primarily rain-fed, as it is in this area. There is strong evidence that shocks in the amount of rainfall translate directly into consumption fluctuations for farmers, and so investment in new agricultural technologies or methods has the potential to significantly affect welfare. Throughout Ghana, the average farmer uses only 7.4 kg of fertilizer per hectare, while in South Asia fertilizer use averages more than 100 kg per hectare. Initial surveys in northern Ghana revealed that the median farmer participating in this study did not use any chemical inputs on their crops, often citing lack of money or concerns regarding weather risk as key obstacles preventing investment.

Description of the Intervention:

In the first year of the study, researchers tested the relative importance of capital and risk in driving farmers’ investment behavior. From a total of 502 households, 117 were randomly selected to receive a cash grant to fund agricultural inputs; these farmers received GHC 60 (approximately US$45) per acre for up to 15 acres, delivered at a time of their choosing. Another 135 randomly selected households received a grant for an insurance scheme that paid roughly GHC 100 (US$75) per acre of maize if rainfall at a local weather station went above or below specified thresholds. Ninety-five households received both the cash grant and the insurance grant, while 155 households received no additional services and formed the comparison group.

In the second year, researchers tested different prices for rainfall insurance among the original sample households, plus households in an additional twelve communities. Households were visited up to four times by marketers: during the first visit they were informed about the product, during the second visit they were asked to sign the contract and pay premiums, during the third visit the marketer issued a policyholder certificate, and during a fourth visit an auditor verified their understanding of the product. The price that people were offered for insurance was randomly assigned at the community level: households in the original sample would be offered rainfall insurance at a cost of either 1 GHC or 4 GHC (approximately US$0.75 or US$3), while in the newly added communities, households would be offered insurance at either the market price of GHC 12-14, or the actuarially fair price of GHC 8-9.5.

In year three, the pricing experiment continued in collaboration with the Ghana Agricultural Insurance Programme (GAIP), to market their drought-indexed insurance. Because this product was more complex, scripts used at the four marketing visits were updated to make it more understandable. Pricing of the insurance was again randomized at the community level, with 23 communities receiving the market price, 23 communities receiving the actuarially fair price, and 26 communities receiving a subsidized price.


Importance of Capital vs. Risk: Results from the first year suggest that risk, rather than capital, was the major constraint on investment among farmers in this sample. Farmers who received the insurance grant increased their expenditure on farm chemicals, and also brought more acres of land under cultivation. If the primary constraint on investment was a lack of capital, then the insurance product, which offered no up-front payouts, would not have affected their ability to purchase materials. Many farmers appeared to recognize the value of the insurance product, with a significant proportion choosing to purchase insurance in years two and three. Take-up of the insurance product did not change when a token price of GHC 1 per acre was charged, and even at the actuarially fair price of almost GHC 10 per acre, 40-50 percent of farmers purchased insurance.

Impacts of Weather Insurance: Farmers with weather insurance invested more in agricultural inputs, particularly in chemicals, land preparation, and hired labor. Total cultivation expenditures were more than GHC 250 (US$188) higher for farmers with insurance, representing a 33 percent increase relative to the comparison group. These impacts were even larger among farmers who received both insurance and a capital grant. Despite the increases in production, it is not clear that investments were actually profitable for farmers: the additional expenditures may have increased by more than the value of the additional output, depending on how household labor is valued.

Trustworthiness of Insurance: Results suggest that how much farmers trust the insurance scheme has a large impact on their take-up and response to rainfall insurance. Take-up of insurance was considerably higher among farmers who also received a capital grant, but it was not higher among households who were wealthier. This suggests that farmers might not have been entirely confident that the promised insurance payouts would be made when trigger events occurred, and so they were more willing to take the risk of purchasing when they had been given extra cash. Similarly, individuals who were familiar with others who had received insurance payouts in previous years were significantly more likely to take-up insurance themselves.


Read about the new agricultural insurance product launch as a result of this study here, and about its' 2012 payout to farmers here.

Click here for a Q&A with researcher Chris Udry

Evaluating the Teacher Community Assistant Initiative in Ghana

Over the last decade, millions more children in developing countries have gained access to primary school education. Despite this achievement, a large number of children enrolled in their first years of school are still not learning how to read, write, or do basic math. Building on previous research, researchers in this study evaluated the impact of several targeted instruction programs on the learning outcomes of primary school students in Ghana’s public schools. Researchers found significant improvements in numeracy and literacy on average, with regional variations. Of four interventions, in-school and after-school remedial lessons delivered by Teacher Community Assistants had the largest impact on pupil achievement.

Policy Issue:

Many developing countries have greatly expanded access to primary school education, spurred by initiatives such as the United Nations Millennium Development Goals, which call for achieving universal primary education by 2015. Yet educating more children has strained education systems, and in many developing nations primary school education is failing to equip a large portion of students with even basic reading, writing, and math skills. Evidence from research in Kenya and India suggests that targeting instruction at the child’s level, for example by using teaching assistants from local communities to teach remedial classes to the lowest half of the class, can raise learning levels. This study contributes to evidence-based education policy by helping to determine best practices in remedial education in a developing country context.

Context of the Evaluation:

In Ghana, 95 percent of children are now enrolled in school. However, data suggests the majority of students are not keeping up with the curriculum. During the initial survey for this study, less than 10 percent of Ghanaian 3rd graders could read four-letter words, only 6 percent could read a basic paragraph, and only about 20 percent were able to identify three-digit numbers—abilities in which 3rd graders in Ghana are expected to be proficient.  

Despite the obvious need for improvements to the education system, the Ghana government is already investing a large portion of its budget into schools. Ghana spends approximately 30 percent of its budget on education, with 99 percent of Ghana’s contributions going toward salaries. There is, therefore, a great need for cost-effective strategies to improve students’ learning levels in Ghana.

Details of the Intervention:

IPA partnered with Ghana Education Services, Ghana National Association of Teachers, and the National Youth Employment Program, to develop and evaluate the Teacher Community Assistant Initiative (TCAI).

The initiative recruited teaching assistants from high school graduates in local communities and placed them into government primary schools across Ghana. Because the gap in academic performance between the strongest and weakest pupils grows from first to third grade, the initiative focused on pupils in grades 1-3 in government schools.

The first phase of TCAI tested four different programs, reaching 25,000 pupils. Five hundred schools across 42 districts, chosen to be nationally representative, were randomly assigned to one of five groups:

In-school remedial TCAs: Teacher community assistants taught remedial classes during school hours, with a focus on basic literacy and numeracy skills. The remedial sessions were targeted to the weakest pupils in first through third grades. (100 schools)

After-school remedial TCAs: Teacher community assistants taught remedial classes after school hours with a focus on basic literacy and numeracy skills. The remedial sessions were also targeted to the weakest pupils in first through third grades. (100 schools)

Normal curriculum TCAs: Teacher community assistants pulled out students randomly (i.e not remedial students only) in first through third grades to review the teacher’s lessons on literacy and numeracy for a few hours a day. The assistant alternated which students were pulled out of class. (100 schools)

Targeted lessons training for teachers: Public school teachers were trained in how to provide small-group instruction targeted at pupils’ actual learning levels in first through third grades. Starting in the second year of implementation, these teachers split their students by ability levels, rather than grades, for one hour daily. (100 schools)

Comparison group: No program. (100 schools)

All of the interventions were designed for scale; efforts were made to keep them low-cost and they were implemented through the government system with support from existing mechanisms.

Results and Policy Lessons:

The Teacher Community Assistant Initiative significantly improved children’s basic skills in numeracy and literacy on average. Of the four interventions, the in-school and after-school remedial TCAs had the largest impact on pupil achievement.

In-school Remedial TCAs: This approach yielded the largest increases in learning relative to the comparison group: a 6.4 percent increase in scores for third- and fourth-graders. This intervention also had a greater impact on more complex skills, meaning there is potential to also push students beyond just remedial skill levels.

After-school Remedial TCAs: This approach produced a 6.2 percent increase in test scores for third and fourth graders relative to the comparison group. This intervention showed the highest impact on basic skills in both numeracy and literacy.

Normal Curriculum TCAs: This approach improved students’ test scores by 5 percent for third- and fourth-graders on average in relation to the comparison group and had the highest TCA attendance.

Targeted Lessons Training for Teachers: This approach improved student test scores by 4 percent on average in relation to the comparison group. Researchers attributed the relative low effect to teachers’ low compliance with the program. Teachers likely faced competing goals of completing the core curriculum and carrying out the non-mandated program.

Although it was slightly cheaper to provide either small group instruction through normal curriculum TCAs or targeted lessons through classroom teachers, these interventions did not improve test scores as much as the combination of teaching at a child’s level and providing community assistants.

Test scores improved across all subjects, but the greatest impacts were achieved for literacy and for remedial lesson subjects. Reading skills scores improved by 18 percent for the local language and 10 percent for English in relation to the comparison group, and test scores for computation increased by 10 percent. Effects were highest for the most basic skills, though there were also effects on more complex skills, indicating that mastering basic literacy and numeracy concepts helped students learn better in other subjects.

Furthermore, when 4th graders were tested a year after the program ended, they still experienced significant impacts in relation to students who had not received the program, indicating that the effects persist even after children have stopped remedial lessons.

Finally, there was great variation in impact across regions, which appears to be correlated with variations in implementation quality. Impact for the in-school intervention almost closed the initial achievement gap between the lowest performing students and the highest performing students in the Upper West region. These findings indicate the importance of implementation, particularly monitoring and ensuring timely payments to the teaching assistants.

Annie Duflo

The Economic Consequences of Brain Drain from Ghana, Tonga, Micronesia, Papua New Guinea, and New Zealand

Does the migration of highly educated people from developing countries hurt local economies, decimating their human capital and fiscal revenue? Or does a highly educated diaspora serve to develop economies through remittances, trade, foreign direct investment and knowledge transfers? Researchers tracked academic high achievers from five countries and found large positive benefits of high-skilled migration for citizens of high emigration countries. The largest benefits were to the migrants themselves, who benefit through massive gains in income and through greater human capital. Meanwhile, while most high-skilled migrants from poorer countries remitted, involvement in trade and foreign direct investment was rare. Fiscal costs to the countries of origin varied widely but were much less than the benefits to the migrants themselves.

Policy Issue:

The number of highly educated emigrants from developing countries living in developed countries doubled between 1990 and 2000, and has continued to grow over the past decade.1 As policymakers in high emigration countries watch the departure of many of their most talented citizens, they both worry about the potential costs of this “brain drain” for development in their country and wonder about the possibilities offered by having a diaspora of the elite who can send remittances home, and facilitate trade, investment and knowledge exchanges. What has been sorely lacking is empirical evidence on how migration impacts the countries facing high rates of high-skilled emigration. The goal of this research was to provide the first systematic microeconomic empirical evidence on what the economic costs and benefits appear to be in practice.

[Note: IPA managed the research for this study in Ghana only.]

Context of the Evaluation:

The study originated in five countries, which represent a range of the types of countries experiencing very high rates of high-skilled emigration: Tonga, Micronesia, Papua New Guinea, Ghana and New Zealand. Tonga and the Federated States of Micronesia are small island states, which have the highest brain drain rates in the world.2 Papua New Guinea, a larger developing country in the Pacific, has much lower overall levels of migration but also a high brain drain rate. Ghana was chosen as one of the best-known examples of a Sub-Saharan African country grappling with high brain drain, and New Zealand as the Organization for Economic Cooperation and Development (OECD) country with the highest brain drain rate.

Details of the Intervention:

To measure quantify for the first time a number of the key economic effects of high-skilled emigration, researchers pursued an innovative survey methodology. First, they identified a well-defined target sample frame of interest – individuals who were the top academic performers in the country at the time of their high school graduation – and then tracked down these individuals wherever they were currently living in the world and surveyed them. In each country the research team assembled a sample of the top academic achievers in the country, for individuals graduating high school between 1976 and 2004, using a mixture of government and school records.

The total sample frame consisted of 4,131 individuals from the five countries. Surveyors then tracked the individuals to the countries to which they migrated. Altogether this involved collecting data on individuals living in 45 different countries, and asking them detailed questions about their migration and educational histories, and the channels through which they interact with their home countries while abroad. Surveyors were able to interview 1,240 (30 percent). Researchers then formed counterfactuals for what these individuals would be doing at home through also surveying academically similar non-migrants and return migrants, and through direct elicitation. The survey efforts began with the Tongan sample in late 2007, and finished with the Ghanaian sample in late 2009. IPA managed the research for the study in Ghana.

Results and Policy Lessons:

Results showed large positive benefits of high-skilled migration for citizens of high emigration countries. The largest benefits are to the migrants themselves, who benefit through massive gains in income and through greater human capital. Researchers estimate that the best and the brightest stand to gain $40,000–75,000 per year from emigrating from the five countries studied.

High-skilled individuals from poorer countries typically remit but it is rare for them to engage in trade or FDI. Adding together the monetary and goods remittances gives a total impact of $5,000 annual remittances for Ghanaians, $2,100 for Micronesians, $625 for New Zealanders (monetary remittances data only), $7,232 for Papua New Guineans and $4,300 for Tongans. These amounts are significant relative to the per capita incomes of the developing countries, with Ghanaian and Papua New Guinean remittances equivalent to about seven times per capita GDP. Nevertheless, the amounts remitted are only a fraction of what the migrants would have been earning at home.

The migrants engage in plenty of knowledge transfer in terms of helping others to learn about study and work opportunities abroad but do not frequently advise their local governments or businesses in their home countries. Return migration is common and researchers find return migrants more likely to be engaging in knowledge transfer than non-migrants but not to have higher levels of productivity.

The main cost researchers measured was the fiscal cost of emigration. This cost varies significantly depending on the progressivity of the tax system and size of government expenditure, with minimal tax implications in Tonga and Micronesia and possible fiscal losses from high-skilled emigration of $6,300 per high-skilled migrant per year for Ghana, $10,000 for New Zealand and $16,900 for Papua New Guinea. The measured benefits greatly exceed the measured costs, however, suggesting that on balance high-skilled migration is improving the living standards of individuals born in countries with high levels of emigration.

[1]Docquier, Frédéric, and Addeslam Marfouk. "International migration by educational attainment, 1990-2000." (2006).

[2]Beine, Michel, Frederic Docquier, and Maurice Schiff. Brain Drain and its Determinants: A Major Issue for small states. No. 3398. IZA Discussion Papers, 2008.

The Impact of Formal Savings on Salaried Workers’ Spending and Borrowing in Eastern Ghana

Commitment savings products are designed to help people overcome social and behavioral barriers to saving money, but many questions remain about how, and in which cases, these products work. We are using a randomized evaluation to test the impacts of a commitment savings product, which pulls savings directly from electronically deposited salary payments, on various financial and behavioral outcomes in Ghana. To the knowledge of the research team, this is the first study on salary withdrawal savings plans in a developing country context.

Policy Issue:

A growing body of literature suggests that commitment savings products—voluntary arrangements designed to help individuals overcome social and behavioral barriers to savings—are very effective in increasing savings. However, there are several open questions regarding how these commitment devices work. For example, where does the savings come from? Do people reduce savings elsewhere, reduce their loans and transfers to others, or reduce spending on luxuries or basic necessities? Once the lump sum within the commitment savings device is released, how is it used? Are there any long-term impacts of having participated in the commitment savings program on economic activities, income, savings, debt, or spending behavior? Is the answer different for men and women? This study aims to address these issues.

Additionally, this research will provide much-needed evidence on commitment savings devices from the deposit side, as compared to the withdrawal side, and it will provide evidence from a developing country context on salary withdrawal savings plans. This research is also unique in that it focuses on relatively better-off, higher status individuals.

Context of the Evaluation:

The Government of Ghana has begun paying its employees electronically, with individuals’ salaries paid directly into their bank accounts. These salaried workers tend to be more educated and have higher and more stable incomes than the average Ghanaian, and are often seen as providers within their households and communities.

North Volta Rural Bank (NVRB) is a rural bank located in the North Volta Region in Eastern Ghana. The bank offers customers whose salaries are electronically deposited by their employer the opportunity to take out high interest payday loans (temporary overdrafts) against their incoming salary. The majority of the bank’s salaried customers have taken these payday loans at least once, and many customers have taken out these loans repeatedly.

In an effort to keep customers from falling into a situation in which they are unable to meet their financial commitments, North Volta Rural Bank created a product, called “Salary Susu Plus,” in which customers commit to having a fixed amount taken directly from their salary and put in a commitment savings account for an 18-month period.

Details of the Intervention:

We are testing the impact of the Salary Susu Plus (SSP) product on study participants’ economic activities, spending and savings behavior, and amount of debt during, immediately after, and six months after the commitment period, and whether the impact differs across gender.

All North Volta Rural Bank customers with salaried accounts are being invited to participate in this study. For the 320 individuals (245 men and 75 women) who agreed, the bank randomly assigned half to a treatment group. Clients in the treatment group are being offered an opportunity to sign up for the SSP program, and of these, 71 percent joined the program. Those not offered the product served as the comparison group.

Participation in SSP involves committing to automatically transfer a fixed amount of one’s directly deposited monthly salary into an SSP account every month for a period of 18 months. The automatic transfer has to be at least 30 Ghana cedis (approximately US$10) per month. In practice, the mean monthly contribution amount is 43 Ghanaian cedis, which is equivalent to 9 percent of the average study participants’ monthly salary. At the end of the 18 months commitment period, the customer is able to withdraw all savings in the SSP account, along with a bonus equal to one month’s contribution. While clients can withdraw funds from their SSP accounts before the commitment period ends, they can only do so by leaving the SSP program, which means they forfeit the bonus payment and must also pay a penalty equal to one month’s contribution.

The bonus amount is designed to give customers a return on their investment that is more than double the return they would receive on a normal savings account. The minimum monthly contribution amount is set to be one-eighteenth of the average payday loan size so that the accumulated lump sum would be equivalent to the average size of a payday loan.

Study participants are being be surveyed before, during, and after the 18-month commitment period.

Results and Policy Lessons:

Results forthcoming.

The Impact of Contractual Partnerships on Small-Scale Rice Growers in Ghana

In Ghana, and in much of Sub-Saharan Africa, a large portion of the extreme poor live in rural areas and work in agriculture. Higher productivity in the agricultural sector could reduce extreme poverty, while improving food security and economic growth. This study measures the impact of an “out-grower scheme,” a contractual partnership between growers and agribusiness companies, on small-scale rice growers’ productivity, income, and quality of life, and intra-household dynamics. This study aims to contribute to agricultural development policy in Ghana and beyond, as well as to the body of evidence on how to close the gender gap in productivity.

Policy Issue:

Low agricultural productivity in Sub-Saharan Africa has led to increasing food imports and the loss of competitiveness for domestic producers. Spending on agricultural research and extension in Africa, especially regional research, remains low, and links between farmers and agribusiness are weak.[i] Agriculture and rural development have been identified as priorities for reaching the Millennium Development Goals,and regional bodies have formulated agriculture development plans that prioritize sustainable land and water management, access to markets, and the reduction of hunger. Individual countries, such as Ghana, have also implemented programs to address these issues. Additionally, while almost half of the agricultural workers in Africa are women, productivity on their farms is significantly lower per hectare compared to men. [ii] Addressing the agriculture gender gap will help drive economic growth across Africa, but more evidence is needed on how best to do this. This study evaluates a farm “out-grower scheme,” a contract between farmers and agribusiness companies with potential benefits to both parties. Evidence from the study aims to contribute to Ghana’s agricultural development program, and to similar programs in other parts of Africa and beyond.

Context of the Evaluation:

As part of Ghana’s strategy to increase food security and agricultural development, it has launched the Ghana Commercial Agriculture Project (GCAP). The program, which is funded by the World Bank and USAID, aims to promote agricultural productivity and livelihoods, specifically by linking small farmers into the agricultural value chain through encouraging large-scale commercial agricultural firms to establish outgrower schemes.[iii]  The study partner, a commercial rice producer, GADCO, is offering contracts to small-scale rice producers in the Accra Plains area. IPA and the World Bank are collaborating to evaluate the impact of the contracts on productivity, income, and general quality of life of the rice growers.

Thirty percent of the plot cultivators in this study are female. Of these, half are in male-headed households, and half are in female-headed households. And many of the rice plots being farmed in this study were distributed by the Government of Ghana to individuals who signed up for them, as part of the development of the Kpong and Weta Irrigation Schemes.

Details of the Intervention:

The study looks at the impact of the contracts, or out-grower schemes, on plot cultivators. Researchers will compare plot-cultivators who participate in the out-grower scheme to a comparison group of growers who do not participate.

Following completion of the baseline survey, 50 percent of the study sample farmers will be assigned to participate in the scheme, and 50 percent will be assigned to a comparison group that will not participate. The commercial rice producer will then offer contracts to farmers in the treatment group. A farmer who signs the contract receives inputs on credit for planting, fertilizer application, and crop protection as well as extension advisory services and mechanized harvesting. On harvesting the rice, GADCO buys the output, accounts for input costs, and then pays the farmer the difference between the value of output and input cost.

This evaluation will look at the impact of the contracts on farmers’ productivity, quality of life and intra-household gender dynamics. Researchers will measure, for example, crop production, yield, profits, sale price, extension, technology adoption, hired and family labor use, and market access. With regard to impact on the household, researchers will look at indicators such as labor and time use, employment, business activities, assets and household investments in education and health. In addition, the study will assess the impacts on male versus female farmers.

Results and Policy Lessons:

Results forthcoming.


[i] "Agricultural Development in West Africa: Improving Productivity through Research and Extension."World Bank, 2013. Available at: http://www.worldbank.org/en/results/2013/03/28/agriculture-development-in-west-africa-improving-productivity-through-research-and-extension

[ii] “Levelling the Field: Improving Opportunities for Women Farmers in Africa.” World Bank and One Campaign, 2014. Available at: http://www.worldbank.org/en/region/afr/publication/levelling-the-field-improving-opportunities-for-women-farmers-in-africa

[iii] "World Bank Approves $100 Million for Scaling Up Commercial Agriculture."  World Bank, 2012. Available at: http://www.worldbank.org/en/news/press-release/2012/03/22/world-bank-approves-us100-million-for-scaling-up-commercial-agriculture-in-ghana

Identifying Gazelles among Micro and Small Enterprises in Ghana

This study examines methods of identifying microenterprises with higher growth potential in developing countries. Researchers surveyed 335 small businesses in Ghana, invited them to participate in a business plan competition, and then tested whether business plan competition judges or survey instruments were better able to identify firms that would grow faster. Both methods worked to predict growth, but survey data were slightly more predictive, and the best growth estimates resulted when both methods were taken together. Training offered to enterprises had no effect, regardless of firm or owner characteristics.
Policy Issue:
A large number of very small enterprises exist in developing countries, but very few ever scale to a point at which they hire additional employees, despite interventions meant to spur growth in this sector.1 If the microenterprises with higher potential for growth could be identified, resources currently spent on interventions provided to the full set of microenterprises could be diverted to provide more intense support to a much smaller target population. Researchers tested various methods used to identify such businesses and explored whether training could help them achieve growth.
Context of the Evaluation:
This project targeted self-employed small business owners with modest levels of formal schooling and substantial experience running businesses in urban Accra-Tema and Kumasi. Rather than focusing on a few large businesses, the project aimed to identify a greater number of self-employed entrepreneurs, each with the potential to create a small number of new jobs. These individuals are not likely to be operating cutting-edge businesses but are great in number and provide products and services that are fundamental to the functioning of the local economy, including areas such as business services (e.g., marketing services), retail trade, and basic manufacturing (e.g., producing soap).
Description of Intervention:
Enterprises were identified through the publication of a business plan competition by radio, newspaper, and door-to-door marketing in neighborhoods containing large numbers of small businesses. To participate in the competition, applicants submitted a form with basic information to ensure compliance with eligibility criteria. Eligible entrepreneurs had to be between the ages of 20 and 55 and be owners of a business that had been in operation for at least one year with two to 20 employees.
Three hundred thirty-five applicants were invited to participate in a three-day program, offered by CDC Consult Limited, designed to guide them in writing a basic business plan. Training participants were asked to submit and present a business plan to a panel of four judges. Each panel, comprised of consultants and successful business owners, scored 12 to 16 business plans on several criteria.
Half of the entrepreneurs were chosen to receive more intensive follow-on training. The selection was random with probabilities increasing with the panel ranking. Those in the top quartile of the rankings had a 75 percent probability of receiving training; the middle two quartiles had a 50 percent chance, while those in the lowest quartile had a 25 percent chance. This second round of training by the National Board of Small Scale Industries consisted of a six-day group course based on the International Labor Organization‘s “Improve Your Business” model. CDC Consult Limited provided individual consulting advice after this course.
A baseline survey was conducted before the initial three-day business plan training course. The survey gathered information on the owner, the history of the business, and enterprise-level data on assets, current employees, and sales and revenues. It also included measurements of risk aversion, numeracy, logical skills, personality diagnostics, and other measures from the entrepreneurial psychology literature. To track growth, follow-up surveys were conducted with all applicants one and two years after the business plan competition. Growth measures included level of sales, profits, and investment, along with the number of paid employees.
Results and Policy Lessons:
Survey data measured five categories: ability, management practices, access to credit, and two attitudes, one an outlook on the potential for growth and another combining trust, optimism, and internal locus of control. The ability measure - a combination of non-verbal reasoning tests, numeracy tests, years of formal schooling, and financial literacy - was significantly associated with growth as were management practices measured at baseline. Access to credit and both attitude measures were not associated with growth.
The two summary scores provided by the panel of judges, overall prospect of growth and how attractive the enterprise would be to an angel investor correlated highly with growth. Compared with the survey data, the panel scores did not explain quite as much of the variance in growth, however. The two measures together were a stronger predictor of growth than either one alone. The survey measure was somewhat better at predicting growth for more competitive contenders, while panel scores were more useful for separating out those at the bottom of the distribution.
The evaluation of the final intensive training found little effect on growth, regardless of firms’ panel or survey scores. In fact, on average, the training had a slightly negative effect on firm growth and was associated with some firms exiting the market. This finding is consistent with a number of other recent studies that find training has little or no effect on firm growth.

1Schoar, Antoinette. “The Divide between Subsistence and Transformational Entrepreneurship.” In Innovation Policy and the Economy, Volume 10, 57–81. University of Chicago Press, 2010. http://www.nber.org/chapters/c11765.pdf.

The Impact of Health Insurance Education on Enrollment in Ghana’s National Health Insurance Scheme

Government-subsidized health care is seen as a useful tool in tackling the health challenges in sub-Saharan Africa, but for it to work, people have to enroll in the program. Ghana offers universal health care, but only about a third of the population is enrolled. Some evidence suggested education about the insurance program would boost enrollment. However, a randomized evaluation in northern Ghana determined that education was not the barrier.

Policy Issue
Health outcomes in sub-Saharan Africa are on average very poor. While the region has 11 percent of the world’s population, it accounts for half of the deaths of children under five, has the highest maternal mortality rate and is disproportionately impacted by HIV/AIDS, tuberculosis, and malaria.[1]  Many people, especially in rural areas, lack access to basic health care services. To help tackle the problem, some governments are providing low-cost public insurance options. However, getting the population enrolled in such programs has been a challenge in some countries. One theory was that low enrollment was a result of lack of knowledge and understanding of health insurance, and that health insurance education would lead to higher enrollment rates.
Context of the Evaluation
Although Ghana's National Health Insurance Scheme has offered low-cost insurance since 2003, a large share of the population remains uncovered. As of 2010, the National Health Insurance Authority estimated that only 34 percent of the population was actively enrolled in health insurance. Coverage rates are especially low in rural areas, including Ghana's Northern Region.
Preliminary qualitative research from international development organization Freedom From Hunger suggested that one reason for low enrollment was lack of knowledge and understanding of health insurance. Freedom From Hunger and IPA partnered to evaluate the impact of an education program developed by Freedom From Hunger on enrollment rates. Freedom From Hunger and IPA then partnered with a local microfinance institution Sinapi Aba Trust to administer the health insurance education program to Sinapi Aba Trust’s clients in both urban and rural areas in the Northern Region, Ghana, specifically in Bole, Salaga, Tamale, and Walewale.
Details of the Intervention
To understand if health insurance education leads to higher enrollment rates, researchers carried out a randomized evaluation with survey data from 1,500 Sinapi Aba Trust microfinance group clients. Credit officers with Sinapi Aba Trust administered the education program to microfinance groups after being trained by Freedom From Hunger.
Three hundred microfinance groups were randomly selected from among Sinapi Aba Trust's client groups. The groups were stratified by branch, depending on whether the group was urban or rural, and whether initial insurance enrollment for the group was estimated to be high or low. Of those 300 groups, 120 were randomly assigned to the comparison group, while 45 were assigned to each of four treatment groups . All of the treatment groups received education covering planning for health expenses, the definition of health insurance and its benefits, and how to sign up for Ghana's National Health Insurance Scheme.
The four treatment groups were as follows:
Short session education: These credit groups received education through a series of six 30-minute sessions over 12 weeks.
Short session education and reminder session: These credit groups were also given education through a series of six 30-minute sessions over 12 weeks, but with a session one year later that reviewed the material and reminded clients that to continue to have access to health insurance, they needed to enroll each year.
Consolidated session education: These credit groups covered the same material as the “short session” groups but in one 2-hour session.
Consolidated session education and reminder session:These credit groups covered the same material as the “short session” groups but in one 2-hour session, and with a reminder session one year later.
A fifth, comparison group did not receive any education program.
IPA conducted baseline, midline, and endline surveys with 1,500 respondents.  Within each client group, five individuals were randomly selected to be included in the study data. Sinapi Aba Trust credit officers administered post-education knowledge tests with a small subset of the sample. IPA also conducted a qualitative endline survey with a small a subset of the sample.
Results and Policy Lessons
Results indicated that individuals who received health insurance education were no more likely to enroll in health insurance than individuals in the control group.[2]
While education may have had some impact on knowledge of insurance, the effect was short-lived. Notably, attitudes towards insurance were universally favorable, and knowledge of insurance generally high, regardless of treatment status. This suggests that knowledge was not a major barrier to health insurance enrollment in Ghana. Follow-up interviews suggest that the convenience of registration, clients following through on stated intent to enroll, and the timing of making the premium payments are more common challenges for enrollment. In environments where knowledge and enrollment are low, educational programs may, therefore, have more impact.
Enrollment increased for all of the studied groups, including the comparison group that received no treatment, at a higher rate than the general population. It is possible that the repeated surveys, along with the treatment activities, might have served as “touch points” that prompted clients to take action to register or enroll in insurance.
In sum, this study joins a growing body of evidence finding that in many contexts, the impact of education programs on health insurance enrollment is limited, especially where a program is established and generally well-known. This research suggests that efforts to promote enrollment should focus on other barriers to enrollment, such as convenience, timing of costs, and following through with intent to enroll. 
[1]International Finance Corporation, “Health and Education in Africa.”
[2]Schultz, Elizabeth, Metcalfe, Marcia, and Gray, Bobbi. “The Impact of Health Insurance Education on Enrollment of Microfinance Institution Clients in the Ghana National Health Insurance Scheme, Northern Ghana.” Microinsurance Innovation Facility, ILO. No. 33, May 2013. 


Raymond Guiteras

Evaluating the African Health Market for Equity (AHME) Initiative in Ghana and Kenya

Sub-Saharan Africa accounts for 24 percent of the global burden of disease. While private clinics are the first source of care for many Africans, the quality of care offered in private facilities is inconsistent and often weak, and the private healthcare sector faces a wide host of challenges. In this study, IPA-affiliated researchers from UC Berkeley and UCSF will evaluate the impact of a multi-pronged private healthcare initiative on healthcare utilization, quality of care, clinic financial outcomes, and child health outcomes in Kenya.

Policy Issue:

Sub-Saharan Africa accounts for 24 percent of the global burden of disease,[1] yet it only has 11 percent of the world's population. The health care systems of the countries in the regions are facing numerous challenges at once, including lack of training and organization, insufficient standards and quality monitoring, and high out-of-pocket expenditures.  While many efforts to address problems in the health care sector have focused on government clinics and hospitals, private providers are in fact the first source of care for many Africans. Though millions of people rely on private clinics, regulation and enforcement of quality care in private facilities is generally weak, and the private healthcare sector is not structured to ensure either quality or affordability.[2]These issues have impelled governments and NGOs to turn their attention to improving care in private facilities. Thus far, many programs have aimed to solve individual constraints to providing high-quality health care, but few have intervened on multiple fronts simultaneously. A multi-faceted approach has not been tested. This research will fill this gap by testing an initiative that addresses multiple health challenges in the region at once.

Context of the Evaluation:

Ghana, Kenya and Nigeria, the countries participating in the African Health Market for Equity (AHME) initiative, all have large populations, a high disease burden, high out-of-pocket payments for healthcare, and they are all working to expand the reach of their health insurance programs. The initiative was designed and is being implemented by Marie Stopes International, Population Services International, PharmAccess Foundation, Grameen Foundation, the International Finance Corporation, and Society for Family Health.

AHME is a multi-faceted initiative that aims to improve both the supply and demand for private healthcare among the poor. Supply-side interventions aim to ensure high quality of care, while demand-side interventions aim to reduce barriers to accessing high-quality care. Evidence suggests that grouping private providers under a franchised brand with a social goal could improve both access to and the quality of some clinical medical services. Such “social franchising” entails creating a valued brand for goods or services, with a social goal, and extending the reach of that brand by leasing the right to use it. A social franchise model serves as the basis for the AHME initiative. In addition, the initiative includes training in basic clinical management and strategic planning for quality improvement and access to credit to implement improvement plans. AHME will also facilitate government registration for clinics. Finally, clinic personnel will use information and communication technology (ICT) to improve operational efficiency.

Details of the Intervention:

Researchers Paul Gertler (UC Berkeley) and Dominic Montagu (UCSF) will use a randomized evaluation to evaluate both the effectiveness and cost-effectiveness of the AHME program at improving quality of care, service utilization, access to high-quality care, and health outcomes. While the initiative is taking place in Ghana, Kenya and Nigeria, the initiative is being evaluated only in Ghana and Kenya, and the randomized evaluation is occurring in Kenya only.

In Kenya, the researchers will randomly assign private clinics that meet criteria for selection into the AHME program to either a treatment or comparison group. Clinics in the treatment group will be invited to participate in AHME immediately, while clinics in the comparison group will be recruited into AHME after the evaluation is complete.

Clinics participating in AHME will receive five interventions:

1.     Social franchising: Private providers will be trained and certified to deliver standardized care under a franchised brand. The brand aims to signal to the client that the clinic offers high-quality services. Local and national marketing for the brand aim to build demand for the franchised services.

2.     SafeCare: The program provides participating clinics with a standardized assessment of facility quality, support in developing quality improvement plans, and incentives for clinics to improve quality of care. 

3.     Medical Credit Fund: The fund provides strategic planning support tied to performance-based financing to eligible SafeCare-participating clinics.

4.     Demand-side financing: AHME will facilitate registration with Kenya’s National Health Insurance Fund for SafeCare-participating clinics that meet a minimum standard of quality.

5.     Information and communications technology (ICT): Mobile phones and other technology will be utilized to enable clinic personnel to, among other things, collect data and directly reach clients.

Data will be collected over a four-year period at both the clinic and household level to measure healthcare utilization, quality of care, clinic financial outcomes, and child health outcomes.

The impact evaluation in Kenya will be a collaborative effort between Innovations for Poverty Action and researchers from the University of California, Berkeley, who will lead the overall evaluation, and the University of California, San Francisco, who will lead the accompanying qualitative evaluation.

The qualitative evaluation will take place in Ghana and Kenya over the same four-year period to complement the quantitative findings. The qualitative evaluation will explore provider and client attitudes towards quality of health and options for care and will describe the AHME operation processes and their effects on the overall markets and institutional environments in which they function. Members of the research team will conduct in-depth interviews with providers participating in AHME and their clients and carry out focus group discussions in communities surrounding AHME facilities. The researchers will also conduct key informant interviews with AHME partner organizations and other key project stakeholders.

Results and Policy Lessons:

Results forthcoming.


[1]UNEP. “Global Shortage of Health Workers.” http://www.unep.org/training/programmes/Instructor%20Version/Part_2/Activities/Dimensions_of_Human_Well-Being/Health/Supplemental/Global_Shortage_of_Health_Workers.pdf

[2]Prata, Ndola, Dominic Montagu, and Emma Jefferys. "Private sector, human resources and health franchising in Africa." Bulletin of the World Health Organization 83, no. 4 (2005): 274-279.

Paul Gertler

Motivating Take Up of Formal Savings

Policy Issue:

Savings are crucial for managing irregular and unpredictable cash flows in order to meet daily needs, finance lumpy expenditures, and deal with emergencies. For poor households, informal tools like credit from moneylenders are often less efficient than savings mechanisms as they require high interest rates to finance predictable and recurring expenses.  Evidence suggests that these households often have excess financial capital after covering subsistence expenses that could be used for savings. Access to and utilization of financial products that help the poor save funds for the future may have substantial welfare consequences.

The recognition of this need has led to the creation of greater financial access throughout the developing world. Banks, for instance, have increased their reach over the past decade in Sub-Saharan Africa, offering savings accounts with minimal fees and opening requirements. Take-up of formal savings accounts among the poor, however, remains low. Why do poor individuals fail to take advantage of the lower-risk, lower-cost vehicle for saving that bank accounts offer? This study evaluates the relative importance of individual beliefs, psychological factors, and transactional barriers to opening accounts. 

Context of the Evaluation:

Tamale, located in the Northern Region of Ghana, is the third largest city in the country. It has a quickly growing economy and has recently experienced a financial services boom: approximately three banks had opened new branches within the three-year period preceding this study. These banks have also made efforts to design accounts with minimal requirements and fees to be accessible to the poor.  The take-up of these products among poorer demographics, however, has been low. During the study, Zenith Bank, which opened its branch in Tamale in 2009, offered savings accounts with no requirement for an opening balance and no fees. Innovations for Poverty Action conducted this study in collaboration with Zenith Bank to provide access to formal saving accounts to individuals who face specific expenditure opportunities that might otherwise be financed with credit. This study aims to determine which of several treatments is most effective in encouraging individuals to open a formal savings account.

Details of the Intervention:

The sample in this study includes 1,831 market vendors who had businesses in the central market of Tamale. These vendors were mostly female and illiterate and owned businesses that sold a wide variety of products including rice, tailored clothing, household items, and produce. This demographic was ideal for the study because: (1) Market vendors earned a steady source of revenue from their businesses and thus had funds they could potentially save; (2) These vendors often relied on informal credit to finance major expenditures, such as school fees, business inventory, and rent; and (3) The market was close to several local banks, including Zenith Bank, the partner for this study. 

A baseline survey was administered to the market vendors to collect data on businesses, common expenditures, savings and loan behavior, and financial attitudes. Afterward, representatives of Zenith Bank came to the market to offer savings accounts to those who had received the baseline survey.  All savings accounts included weekly reminders to save via text message.  Participants received three types of treatments randomly assigned before the account-offering:

  • Framing Condition: Individuals were randomly assigned into one of three groups. Those in the Comparison Group received no treatment.  Those in the Information Group were provided with specific information from previous studies about how much more individuals save when they receive reminders to save.  Those in the Emotion Group were asked to tell a story that generates positive and hopeful emotional feelings.
  • Cost Condition:Individuals were randomly assigned to one of two groups. Those in the Zero Cost Group were encouraged to open an account and could do so without ever visiting the bank.  Those in the Transaction Costs Group were encouraged to open an account but had to visit the bank to do so.
  • Savings Tools:Individuals were randomly assigned to one of three groups. Those in the Comparison Group received no tools with their account. Those in the Financial Plan Group received a customized simple savings plan to finance a specific expenditure.

The primary study outcomes were a) willingness to open a formal bank account with Zenith band and b) savings deposit behavior after opening accounts.


The strongest treatment effect came from removing all transaction costs for opening a bank account.  Individuals were more than ten times more likely to open an account when they could open accounts directly at their place of business.  Convenience seems to be a primary motivating factor in decision-making about interacting with formal banking.

Specific information did not increase the likelihood of opening an account or making savings deposits.  If anything, specific information about the benefits of saving with regular reminders decreased the willingness to open an account unless that information was highly positive.  Emotional framing also had no statistically significant effect on account opening. 

While many individuals opened accounts, relatively few individuals continued making deposits over a long-run horizon.  Six months after the study the majority of account holders were not making regular deposits (no individuals in the high transaction cost group continued to make deposits while 2.5% of individuals who could open accounts in the field continued to make deposits).  For this reason, we see no impact of specific savings tools on the level of savings.

Exploring Early Education Programs in Peri-urban Settings in Africa: Summary findings from Accra, Ghana

Innovations for Poverty Action (IPA) performed a scoping study of preschools in Ashaiman, Accra in September and October 2013. The study aims to present details on access to and the quality of preschools as part of a four-country study including similar work in Nairobi, Johannesburg and Lagos, launched and sponsored by the UBS Optimus Foundation. The results show that a large number of preschool options exist in Ashaiman, particularly in the private sector, and that an overwhelming majority of young children are attending these preschools.
Note: This is not an impact evaluation, but a scoping study in four African cities designed to support future research. You can see the full Accra report here (PDF), the full 4-city report here (PDF), and the main page with links to the other summaries here.

Study background & design
The Ghanaian early education system includes four years of preprimary education. Children enter Nursery at age 2, after which they enter Kindergarten, and enter primary school at age 6. All children attend 5 days a week and spend on average 41 hours per week at preschool. 
Ashaiman is a town of roughly 200,000 residents, located 30 kilometers east of the Ghanaian capital Accra’s city center. Although Ashaiman is clearly regarded as a ‘slum area’ by Ghanaians, most dwellings are permanent structures made of bricks or concrete.
Data collection was conducted in Ashaiman with the aim of gathering data on the scale, cost and quality of preprimary education. In total, 286 household interviews, 30 headmaster surveys and 40 classroom observations were conducted. 
Large preschool participation rates, even among the poorest
There are a large number of preschool options in Ashaiman, and participation rates are very high. More than 80% of 3 year olds attend preschool, and more than 90% of 4-6 year olds are attending either preschool or primary school, with no significant gender gap. 
High attendance is achieved across all levels of income, despite the fact that about 30% of 3-6 year olds live in households live below the poverty threshold of 2.50 dollars per capita. 
Options exist, but costs still a barrier
Parents have a relatively large number of options when choosing a school for their child. The average caregiver knows of 3.6 preschools that their child could walk to. 
The major selection factors caregivers consider in a preschool are proximity, cost and teacher quality. 60% of parents whose children walk to school are not sending their child to the school they consider to be the best within walking distance, most commonly due to cost. Preprimary school-related costs, including mostly fees, food, and books averaged $38 dollar per month per child. 
Parents value preschool education, particularly of private schools
Parents view preschools as educational establishments rather than daycare centers. 80% of parents said their main motivation for sending their child to school was for the child to learn skills and be prepared for primary school. Only 12% said that the main reason was that there was no-one at home to take care of them.
We also find evidence that parents perceive private schools to be better than public schools, and more expensive private schools to be superior to low cost private schools. An estimated 91% of preschool students in Ashaiman go to a private preschool. 
Content and teaching academically oriented
Materials and teaching style are geared towards an academic style of learning, with the prevalence of forward-facing desks and exercise books. There is considerable variation, however, in provision of materials within classrooms; the responsibility of buying school books generally rests with parents and within most classes a minority of pupils remain without learning materials. Toys and play materials are limited; only 26% of children attend schools that had any toys for preschool use.
Homework is generally assigned as of age 3.5 on average, and learning goals are very ambitious. The average ages by which headmasters consider that children should know the single-digit numbers and the full alphabet are 3.6 and 3.7 years respectively. Almost half (45%) of private schools have exams for 3 year olds and 90% have exams for 6 year olds. 
Gap between government plan and reality
23 of the 24 private schools in the sample said they were registered with either Ghana Educational Services (GES) or the Ashaiman Municipal Council.
While the Ghanaian government has recently formulated the ambitious and comprehensive “Operational Plan to Scale-Up Quality KG Education in Ghana,”classroom realities depart from this vision in two key ways:
1) Rote learning techniques have not yet been overtaken by the Government’s espoused child-centered teaching model.
2) Around three-quarters of observed classrooms used primarily English for instruction, despite the Government’s literacy acceleration plan for 90% of kindergarten instructional time to be in national languages.
In order to bring classroom behavior more in line with government rhetoric, GES has stipulated that teacher training is their number one priority within the preschool sector. They are currently seeking appropriate models of mass transformational training, which will target Ghana’s 27,000 untrained preschool teachers.
While Ashaiman has a large, well-attended preschool sector, private providers dominate and   evidence suggests that cost remains a barrier to attending higher quality institutions. While Ghana has advanced educational policies, classroom realities do not always reflect the government’s vision. The high numbers of untrained teachers and overwhelming usage of English to teach numeracy and literacy are of particular concern. The Government has recently published an ambitious plan to deal with these issues which, if successfully implemented, could cement Ghana’s status as a leader in preschool education services in Africa.
IPA is eager to identify cost-effective programs successful at improving access and quality of preschool services with both public and private sector partners. For questions on partnering on impact evaluations in Ghana specifically please contact Chase Stafford (cstafford@poverty-action.org), or for general questions regarding IPA’s work in the early education sector, please contact Loïc Watine (lwatine@poverty-action.org).
Loïc Watine

Returns to Apprenticeship Training in Ghana

Youth unemployment—an acute problem in Sub-Saharan Africa—is overwhelmingly considered to have long-term negative implications, both on individuals’ quality of life and on broader socio-economic development outcomes. This study assesses the impact of a government apprenticeship program in Ghana that pairs young people who have limited education with master trainers operating small businesses for a one-year training period. Researchers are evaluating the targeting and recruitment process, the benefits for apprentices and trainers, the program’s cost-effectiveness, and to what extent performance-based incentives increase the quality of training apprentices receive. Results from this study will assist policymakers in Ghana to formulate sound policy to address youth unemployment. 

Policy Issue:

Youth unemployment is an acute problem in low-income countries, and especially in Sub-Saharan Africa.[1] Young people account for 60 percent of the unemployed in Sub-Saharan Africa, and 72 percent of young people between the ages of 15 and 24 live below the $2 a day poverty line.[2] A lack of necessary skills is often cited as contributing to high unemployment. Job training programs, and in particular apprenticeship training with private-sector informal firms, could expand labor market opportunities for young people by providing them with relevant on-the-job experience and market-ready skills.

Despite their promise, program evaluations of job training programs around the world have been disappointing and job training has been shown to provide mediocre labor market returns on average. One reason for these lackluster effects may be wide variability in the quality of training. In Ghana, as in other poor countries, productivity (and likely, training ability) varies greatly across businesses. In addition, though non-institutional, on-the-job training is otherwise believed to be the most effective option, it potentially introduces new issues where the incentives of training providers may be misaligned with those of trainees or the government agency implementing the program. In particular, apprentices provide low-cost labor to businesses via their on-the-job experience, and this dual role could incentivize training providers to seek to retain apprentices at a skill level that is profitable for the business but makes them less than employable elsewhere.

Context of the Evaluation:

In 2012, 26 percent of young people in Ghana between the ages of 15 and 24 were unemployed.[3] The skills deficit in Ghana is partly driven by an education system in which a large number of students fail to progress beyond junior high school. Access to senior high school is based on performance in national examinations and places are often limited; in 2011/2012 only 50 percent of qualified students transitioned to senior high school, and the gross enrollment ratio for senior high school was only 37 percent.[4]  The gross enrolment ratio in public technical and vocational training institutions was just 3.5 percent. Limited capacities at government schools and public and private training institutions combined with costly fees prevent many young people from furthering their education and improving their skills.

The National Apprenticeship Program (NAP) is a training program initiated by the Council for Technical and Vocational Education and Training (COTVET), and implemented by district-level coordinators of the Ghana Education Service, in close partnership with craft-specific trade associations. The program is based on the traditional three-year apprenticeship model, which is extremely widespread in Ghana, except that the NAP training period has been shortened to one year in order to reduce the amount of time before apprentices enter the labor market. Similar to the traditional apprenticeship model, COTVET has committed to paying master trainers and to providing a toolkit to each participating apprentice.

The program is mostly targeted at young people who are unable to continue their education beyond Junior High School. Recruitment of both trainees and master trainers  was conducted at the district level.

Details of the Intervention:

To estimate the returns of the apprenticeship program, and to examine how it can work most effectively, researchers are implementing a randomized evaluation in 32 nationally representative districts across all 10 regions of Ghana. Researchers assigned a random half of the 4,601 applicants to participate in the apprenticeship program. Treatment apprentices were then randomly assigned to master trainers’ businesses that matched their trade and geographic preferences. The businesses and their owners have a wide range of characteristics to enable researchers to measure if there are certain business-level characteristics associated with higher quality training (as measured by self-reported progress throughout the program, and apprentice attendance, retention, and completion) and higher labor market returns upon completion.

Additionally, a random half of master trainers will be offered cash incentives to encourage them to instruct their apprentices well. This additional cash incentive program is designed to encourage trainers to ensure a proficient skill level within the specified time period.

Results and Policy Lessons:

Results forthcoming.

[1] Africa Development Forum (2014). Youth Employment in Sub-Saharan Africa. Washington D.C.:  The International Bank for Reconstruction and Development/The World Bank. [Online].  Available at: <http://documents.worldbank.org/curated/en/2014/01/19342178/youth-employment-sub-saharan-africa-vol-2-2-full-report>. [Accessed: 8th May 2014].

[2] World Bank (2009). Africa Development Indicators 2008/09. Youth and Employment in Africa: The Potential, the Problem, the Promise. Washington D.C:  World Bank. [Online].  Available at: <https://openknowledge.worldbank.org/handle/10986/12350>. [Accessed: 8th May 2014].

[3] African Economic Outlook (2012). Ghana 2012 Paris: OECD[Online]. Available at: http://www.africaneconomicoutlook.org/fileadmin/uploads/aeo/PDF/Ghana%20Full%20PDF%20Country%20Note.pdf. [Accessed: 25th June 2014].

[4] Ministry of Education (2012).  Education Sector Performance Report.  Accra: Ministry of Education. [Online].  Available at: http://www.ndpc.gov.gh/GPRS/Dist%20and%20Sec%20APR%202012/SECTOR%202012%20APRs/Ministry%20of%20Education.pdf. [Accessed: 25th June 2014].

Isaac Mbiti

After-School Girls Empowerment and Satellite-Transmitted Classes in Ghana

Recent efforts to increase primary school education enrollment in developing countries have been extremely successful, yet major challenges persist in improving educational outcomes. In sub-Saharan Africa, high drop out rates, especially for girls, as well as student and teacher absenteeism are major impediments to learning. Many students, especially girls from low-income families in rural areas, miss so much school that they become chronic repeaters. This study assesses the impact of a program that aims to improve student retention and learning outcomes for marginalized pupils in Ghana through distance learning and an after-school girls’ empowerment program.

Policy Issue:
Like many sub-Saharan African nations, Ghana is facing significant challenges in its educational system. One study revealed that teachers in Ghana only spend 38 percent of school hours “engaged in learning.”[i] A driving factor behind diminished learning time is the high rate of teacher and student absenteeism. Teacher absenteeism averages 27 percent annually and as many as 40 percent of children may not be present at school on a given day.[ii]  Students from low-income households miss school the most, and achievement for these students is especially low. Many poor children also repeat, so more over-age children are poor children.[iii] Girls, especially those from low-income families, drop out of school at a higher rate than boys, with early pregnancy playing a large role.[iv] Though almost the same number of boys and girls enter primary school in Ghana, only two girls for every three boys complete high school.
The Making Ghana Girls Great (MGCubed) program, implemented by the Global Education Management System (GEMS), is based on the premise that diminished learning time, due to high rates of teacher and student absenteeism, contributes to low learning levels, and that a lack of female role models contributes to a high drop out rate for girls.
The program introduces distance learning and after-school girls club called the Wonder Women, both led by facilitators from the community, most of them female. Researchers will evaluate the impact of the interactive distance learning classes, transmitted via satellite, and the after-school program on learning outcomes. The program targets marginalized boys and girls aged 7-14 who are currently enrolled in school, and girls who have dropped out of school or never attended school. The marginalized pupils are defined as those who are above the average age for their class, those who have more than five siblings, those who walk more than 30 minutes to reach school, or those who have a history of not attending school.
This evaluation aims to assist policymakers in identifying interventions that ensure optimum retention, increase enrollment, and improve learning for marginalized students, and for girls in particular.
Details of the Intervention:
To measure the impact of the MGCubed program on learning outcomes and student retention, IPA will evaluate the distance learning and Wonder Women programs over a three-year period, measuring any changes in the test scores, stated aspirations, and confidence levels of participants over time.
The sample size is 147 schools, of which 70 will receive interventions and 77 will serve as the comparison group. Within the 70 treatment schools, 80 studentswill receive the in-school component, and 40 of those students who are girls, plus 10 out-of-school girls, will participate in the after-school Wonder Women program. All students are randomly selected from lists of marginalized pupils from each school.
The two treatment groups are, therefore, as follows:
1.     Students who receive in-school distance learning lessons only. Forty students at all treatment schools will be taught English and math lessons for two hours per day.
2.     Students who receive the in-school distance learning lessons and the after-school girls’ club called Wonder Women. Forty female students at each treatment school will be taught English    and math lessons for two hours per day and will also participate in the after-school program. Ten out-of-school girls will also be invited to participate in the program.
The in-school distance-learning classes, which are interactive and transmitted via satellite, provide the consistent presence of a remote teacher, digital content, and a student-centered pedagogical design. It is designed to improve the quantity of instructional hours students receive, as well as the quality of the instruction.
The after-school program will run two hours per day for four days of the week. While this program also aims to increase the instructional input hours received by the students, its aim is to empower the marginalized girls to have greater confidence in themselves and to stay in school, or for those who have dropped out, to re-enroll.
Trained facilitators will be recruited from teaching staff or from secondary school graduates in the community, with a preference for women facilitators, to lead both distance-learning program and the Wonder Women program.
The intervention is taking place in regions that Ghana Education Services has recognized as regions with both known educational needs and operational access. The specific districts are Ada East, Ada West, Shai Osudoku and Ningo Prampram, in the Greater Accra region, and Kadjebi and Nkwanta South in the Volta Region.
Data to be collected include test scores, quantitative data on students’ background information, goals and confidence level for girls.
Results and Policy Lessons:
Results forthcoming.

[i] Abadzi, Helen. "Instructional time loss and local-level governance." Prospects 37.1 (2007): 3-16.
[ii]  "What Works in Girls’ Education in Ghana." Prepared by Camfed Ghana. January, 2012. P.8 
[iv]Gyan, Charles. "The Effects of Teenage Pregnancy on the Educational Attainment of Girls at Chorkor, a Suburb of Accra."Journal of Educational and Social Research 3, no. 3 (2013): 53.
Christopher Ksoll

Are SMEs Leaving Returns to Scale on the Table?

A common sight in developing economies is a series of identical shops, selling the same product at similar prices and all located within extremely close geographical proximity. However, while the observation that shops appear redundant seems to imply that SMEs could increase profits by combining or diversifying, there is no empirical evidence that can test the hypothesis that SME behavior is irrational.  This project looks at whether such behavior among SMEs is efficient by collecting data that will allow for a direct answer to the question: assuming no agency costs and a well functioning consumer market, could SMEs combine and earn higher profits? 

This project focuses on ten used tire sellers in downtown Accra that are located in a row and all sell only used tires.  Data collection on these seemingly redundant firms includes digitizing the books of all ten small businesses and recording information about consumer purchasing behavior (i.e. transaction times, quantities and prices), the quality of goods being sold, the incidence of stock outs, management of labor as well as inventory and supply management practices, as well as conducting surveys with shop owners, shop workers and consumers.  The primary outcome of the study will be the ability to conclude one of two things: a) the tire shops continue to operate separately because there is no benefit to combining, or b) the tire shops could decrease costs and increase profits but they do not do so.

Culture & Incentives: A Cross Country Field Experiment

Policy Issue:

Increasing the productivity of people lies at the core of the development process. Yet the drivers of worker productivity in developing countries remain largely unknown. Recent survey evidence shows that the most profitable and productive firms tend to adopt personnel policies that link pay to performance and that firms in less developed countries are less likely to do so. However, observational studies cannot establish causality, and rigorous field evidence on the effectiveness of pay for performance contracts is limited largely to the US and the UK. Whether pay for performance contracts can be effective at increasing productivity in developing countries remains an open question, the answer to which likely depends on how incentives interact with local cultural norms.

Context and Description of the Intervention:

Research on these topics typically faces a severe trade-off between precision and generality. At one end of the spectrum, cross-country surveys provide suggestive evidence on broad patterns but are unable to identify causality. At the other, field experiments run within one firm in one country identify precise causal mechanisms but are difficult to generalize. By implementing the same field experiment in several different contexts that differ systematically on the characteristic of interest, this project is the first to combinethe precision of field experiments with the breadth of macro studies.

This project aims to provide evidence on what drives worker productivity by implementing a series of identical, carefully controlled field experiments in a range of countries. By establishing identical firms in these countries and creating identical work tasks within those firms, the project is exploring the cultural determinants of worker productivity in the developing world. Exploring the interactions between culture and labor practices is a key step in understanding persistent productivity differences across countries and in providing practical, evidence-supported tools to help span the gap.

Incentives to Save in Ghana

Researchers are evaluating whether incentives to save are effective at increasing savings levels and whether these higher savings levels persist after the incentives are removed. 

Policy Issues:
Savings are an essential tool to help manage irregular income streams, cope with emergencies, and make productive investments. Research shows many of the world’s poor express a desire to save and have the funds to do so, but still struggle to build their savings.12 In some cases, this discrepancy may be due to a lack of access to safe and secure ways to save. However, evidence suggests that many find it difficult to put their savings plans into action even where formal savings options are readily available.3 One way to help individuals meet their savings goals may be to encourage them to develop a habit of saving. If individuals become accustomed to making regular contributions to their savings, they may be more likely to meet their long-term savings goals. Researchers are evaluating whether direct monetary incentives can increase savings rates and instill a habit of saving among small-scale vendors in Ghana.
The Aboabo market is located in Tamale, the third largest city in Ghana. The market is composed of more than 2,000 vendors, the majority of whom trade staple goods, such as maize, rice, and vegetables. The Aboabo vendors have access to a wide variety of formal savings products offered by a number of banks, microfinance institutions, and mobile money agents located near the market. Despite the variety of options for people to save, many of the market vendors in Aboabo do not utilize these services. A preliminary survey of mobile money usage conducted for the study indicated that only 57 percent of vendors had heard of the service and only 9 percent had used it, even though 94 percent of vendors owned a mobile phone compatible with the service. 
Description of Intervention:
Researchers are working with Millicom Ghana Ltd., operators of the Tigo Cash mobile money platform, to evaluate whether providing cash incentives through a mobile money platform can help market vendors develop a lasting habit of savings. 
Prior to the start of the study, Millicom Ghana will hold an intensive marketing and enrollment drive for Tigo Cash among the vendors in Aboabo. Six hundred of the vendors who register with Tigo Cash will be selected to participate in the evaluation. Half will be randomly assigned to receive a cash incentive that will be deposited directly into their mobile money accounts for every week in which they increase their savings balance over the previous week, over the course of three months. Of this group of three hundred vendors, half will receive a small weekly incentive of GHS 0.5 (Ghanaian Cedis) for every GHS 1 they save, up to a maximum of GHS 2 (approximately US$1). The other half will receive a larger weekly incentive of GHS 1 for every additional GHS 1 they save, up to a maximum of GHS 4 (approximately US$2). The remaining 300 vendors will serve as the comparison group, and will not receive weekly incentives. However, they will receive an unannounced cash transfer when the three-month incentive phase ends to help ensure that any difference between the incentive group and the comparison group is a result of habit formation and not the additional income provided by the incentive payments. 
In addition to varying the incentive amount, the timing of payments will be randomly varied across participants who receive the weekly incentives. Varying the timing of payments will help determine the number and continuity of payments needed to establish a habit of saving. The group receiving incentives to save will be randomly assigned to one of three sub-groups:
  • Continuous weekly incentives starting once the baseline survey is complete for a total of 12 weeks of incentive payments. 
  • Continuous weekly incentives starting four weeks after the baseline survey is complete for a total of 8 weeks of incentive payments. 
  • Weekly incentives starting four weeks after the baseline survey is complete, where the incentive payment will not occur on four randomly selected weeks for a total of 8 weeks of incentive payments. 
The researchers will collect information on self-reported savings, consumption, and habit formation from both participants who received the incentives and the comparison group through a series of three household surveys. The first survey will be conducted immediately before the incentive payments begin; the second three months later, immediately after the incentive payments end; and the final survey another three months after that (six months after the first survey). This information will help determine if the incentives prompted people to increase their savings or develop a habit of saving compared to those who did not receive incentive payments. This data will be supplemented by administrative data from Tigo Cash and weekly self-reported habit formation questionnaires completed by a randomly assigned sub-set of all participants. 
Project ongoing, results forthcoming.
1 Collins, D., Morduch, J., Ruthrford, S., & Ruthven, O. (2009) Portfolios of the Poor: How the World’s Poor Live on $2 a Day. Princeton, NJ: Princeton University Press.
2 Duflo, E., Kremer, M., Robinson, J. (2010). Nudging Farmers to Use Fertilizer: Theory and Experimental Evidence from Kenya. American Economic Review 101 (6): 2350-2390
3 Baumeister, R.F., Heatherton, T.F., & Tice, D.M. (1994). Losing Control: How and Why  People Fail at Self-Regulation. San Diego, CA: Academic Press.

Returns to secondary schooling in Ghana

By offering means-tested secondary school scholarships to youth in Ghana, and comparing school enrollment and longer-term outcomes in health and employment between scholarship winners and a similar group of youth not offered a scholarship, this study aims to provide evidence on the barriers to enrollment and estimate the longer-run returns to secondary education.  Preliminary evidence suggests that the secondary school completion rate will be at least 30 percentage points higher among scholarship recipients, suggesting substantial financial barriers for Ghanaian youth who gain admission into secondary school but fail to enroll.

Policy Issue:

Over the past decade, many developing countries have expanded primary school access, energized by initiatives such as the United Nations Millennium Development Goals, which call for achieving universal primary education by 2015.  As some progress has been made towards this goal, an important question for policy-makers is emerging: how quickly should access to secondary education expand? Although human capital is considered to be an important driver of growth and development, and the role of primary education has been well studied and understood, there is very little evidence of the benefits of secondary education. It is sometimes hypothesized that secondary education could have a much larger impact than primary education on long-run earnings, health, fertility, gender equality, and civic and political participation. However, expanding secondary education is significantly more expensive than providing free primary education.

Evaluation Context:

While primary school completion rates have boomed in recent years, secondary school enrollment across sub-Saharan Africa has remained low, at 34% in 2007 according to UNESCO1. The direct costs of fees and materials (around US$350 over four years in Ghana) as well as the opportunity costs to families of taking youth out of the workforce may be contributing factors to low secondary school enrollment.

Description of the Intervention:

The sample for this long-term research consists of a cohort of 2,068 students (evenly split between males and females) who earned admission into a 4-year secondary school (“senior high school”) but had not enrolled by the Fall 2008 due to financial constraints. Out of these 2,068 students, 682 students were selected (by lottery) to receive a scholarship that covered 100% of the tuition and fees at a local public senior high school. The scholarships were announced during the 2008/2009 academic year and over 75% of scholarship winners enrolled in senior high school that year. Most of them are expected to graduate in June 2012. The goal is to compare the outcomes of those offered the scholarship (the treatment group) with those who did not win the lottery (the comparison group) for at least 10 years in order to estimate the impacts of lowering the financial barriers to secondary school enrollment and the returns to secondary education.

At the beginning of the study, a baseline survey was administered to all participating youth and their guardians. At the time, the youth were 17 years old on average.  Study participants were given a cell phone, and once a year, we attempt to reach all respondents over the phone in order to update their contact information and ask for their current schooling status and location. If they cannot be reached over the phone, we attempt to find them in person by going to their home area.

The first of three extensive follow-up surveys will be administered to the entire sample in the Fall 2012, when most study participants will be out of school. Subsequent follow-ups will be administered in 2015 and 2018. Follow-up surveys will include, among others, modules on labor market outcomes, health, marriage and fertility, time and risk preferences, technology adoption, civic participation, etc.

Preliminary Results and Policy Lessons:

As follow-up data has not yet been collected, lessons on the impact of increased access to secondary education cannot yet be made. Preliminary results concerning educational attainment are the following:

Among those who did not win a scholarship (the comparison group), 20% enrolled in senior high school in the school year 2008/2009. The enrollment rate among them had risen to 38% by the end of the 2010/2011 school year. This rate was higher among boys (44%) than girls (34%). Part of the lower enrollment rates among girls comes from the fact that a subset of girls in our study sample had been out of school for more than a year already at the time the study started.

Among scholarship winners (the treatment group), the enrollment rate was 75% in the school year 2008/2009, almost four times that in the comparison group. Three years later, the enrollment rate was still twice as high among those that received scholarship compared to those who did not, at 73% overall (81% among boys and 64% among girls).

Returns to Capital among Microenterprises in Ghana

A recent randomized experiment in Sri Lanka found very high returns to capital for male-owned microenterprises, but zero return to female microenterprises. We are replicating this experiment in Ghana, a country with high levels of female participation in self-employment, to see if the results generalize to a different cultural context. The project will also collect much more detailed information about gender roles and empowerment, and occupational choice to test between several explanations for low returns to female-owned enterprises.

The study is being conducted with 800 microenterprises, half male-owned and half female-owned. Half of these will be randomly given grants of 150 cedis (approximately $120), half in the form of cash grants and half as equipment for their enterprises.

David McKenzie
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