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It gives me great pleasure to present Innovations for Poverty Action’s first annual report. Despite the world financial crisis, IPA grew remarkably in 2009. This year we managed about $18 million in research grants, a 40 percent increase from 2008. This comes partly from the inclusion of new researchers, partly from the increase in projects with existing researchers, and last but not least the inclusion of scale-up efforts into IPA’s core activities. In just eight years we’ve grown from a small group of researchers into an established organization, managing more than 200 research projects in 31 countries with a staff of over 250. Today, more than 30 research affiliates — professors at some of the leading institutions of higher education in the world — turn to us to implement and manage their projects. For our researchers and our donors, the greatest satisfaction comes from knowing that the value of our work will continue to increase many times over through more effective anti-poverty p...
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Annual Report
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July 01, 2009
English
In order to study the impact of microcredit on entrepreneurs in Manila, the authors worked with a lender in Manila who undertook an expansion by randomly accepting some marginally credit-worthy loan applications. The researchers conducted a follow-up survey to measure the effects of this credit expansion on borrowing, business, and social outcomes. Compared to marginally credit-worthy applicants who did not receive approval of their loans, there is some evidence that the business profits of those in the treatment group increased. Households given the opportunity to borrow invested less in the target business, spent less on labor, and substituted away from formal insurance. These effects were stronger for male and higher-income entrepreneurs. Together, the results suggest that microcredit works broadly through risk management and investment at the household level, rather than directly through business investment as is typically claimed.
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Brief
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July 01, 2009
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This paper studies the economic and health impacts of the 2007 Kenyan Presidential Election crisis. Over the two months of civil conflict that immediately followed the election, we observe sizeable downfalls in income, expenditure, and consumption for a broad segment of the rural population. This suggests households were unable to smooth over the shock. We also find that the crisis increased the likelihood that women who supply transactional sex chose to engage in unprotected sex, increasing the risk of HIV/AIDS transmission. These results suggest that social unrest is an important channel through which political instability can affect long-term outcomes and development.
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Published Paper
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June 01, 2009
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Microcredit has spread rapidly since its beginnings in the late 1970s, but whether and how much it helps the poor is the subject of intense debate. Despite high hopes for microcredit’s potential to transform the lives of the poor, there is a lack of concrete evidence demonstrating its impact. Skeptics fear that microfinance is displacing more effective anti-poverty measures or even contributing to longterm poverty via over indebtedness. This paper reports on the first randomized evaluation of the impact of introducing microcredit in a new market. Based on a survey of slums in Hyderabad, India, the authors find mixed results on a range of impact measures.   Full published paper is available here.
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May 01, 2009
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This paper presents a randomized field experiment on community-based monitoring of public primary health care providers in Uganda. Through two rounds of village meetings, localized nongovernmental organizations encouraged communities to be more involved with the state of health service provision and strengthened their capacity to hold their local health providers to account for performance. A year after the intervention, treatment communities are more involved in monitoring the provider, and the health workers appear to exert higher effort to serve the community. We document large increases in utilization and improved health outcomes—reduced child mortality and increased child weight—that compare favorably to some of the more successful community-based intervention trials reported in the medical literature
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Published Paper
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May 01, 2009
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Agencies engaged in humanitarian efforts to prevent the further spread of HIV have emphasized the importance of voluntary counseling and testing (VCT), and most high-prevalence countries now have facilities that offer testing free of charge. The utilization of these services is disappointingly low, however, despite high numbers reporting that they would like to be tested. Explanations of this discrepancy typically rely on responses to hypothetical questions posed in terms of psychological or social barriers; often, the explanation is that people fear learning that they are infected with a disease that they understand to be fatal and stigmatizing. Yet when we offered door-to-door rapid blood testing for HIV as part of a longitudinal study in rural Malawi, the overwhelming majority agreed to be tested and to receive their results immediately. Thus, in this paper, we ask: why are more people not getting tested? Using an explanatory research design, we find that rural Malawians are respons...
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Published Paper
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April 15, 2009
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This paper examines the accuracy of corruption perceptions by comparing Indonesian villagers reported perceptions about corruption in a road-building project in their village with a more objective measure of 'missing expenditures' in the project. I find that villagers' reported perceptions do contain real information, and that villagers are sophisticated enough to distinguish between corruption in a particular road project and general corruption in the village. The magnitude of the reported information, however, is small, in part because officials hide corruption where it is hardest for villagers to detect. I also find that there are biases in reported perceptions. The findings illustrate the limitations of relying solely on corruption perceptions, whether in designing anti-corruption policies or in conducting empirical research on corruption.
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March 11, 2009
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This paper reports the results of a field experiment testing the effectiveness of different quality get-out-the-vote (GOTV) non-partisan phone calls. During the week preceding the November 2004 election, we randomly assigned registered voters in North Carolina and Missouri to one of three live phone calls with varying length and content. The scripts are (1) standard GOTV, (2) interactive GOTV, and (3) interactive GOTV with a request for mobilizing neighbors. We find that people assigned to the interactive GOTV treatment are more likely to turn out, while the effect of the “get your neighbors to vote” script is relatively as weak as that of the standard script. The findings suggest that interactive phone calls generally tend to increase voter turnout, but in order for a phone call to be effective, the message needs to be focused. The borderline statistical significance of the script that encourages neighbors’ participation invites replication of this experiment.
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Published Paper
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March 01, 2009
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This paper presents the evaluation of the program Computers for Education. The program aims to integrate computers, donated by the private sector, into the teaching of language in public schools. The authors conduct a two-year randomized evaluation of the program  using a sample of 97 schools and 5,201 children. Overall, the program seems to have had little effect on students' test scores and other outcomes. These results are consistent across grade levels, subjects, and gender. The main reason for these results seems to be the failure to incorporate the computers into the educational process. Although the program increased the number of computers in the treatment schools and provided training to the teachers on how to use the computers in their classrooms, surveys of both teachers and students suggest that teachers did not incorporate the computers into their curriculum.
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Working Paper
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March 01, 2009
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What is the political legacy of violent conflict? I present evidence for a link from past violence to increased political engagement among ex-combatants. The evidence comes from northern Uganda, where rebel recruitment generated quasi-experimental variation in who was conscripted by abduction. Survey data suggest that abduction leads to substantial increases in voting and community leadership, largely due to elevated levels of violence witnessed. Meanwhile, abduction and violence do not appear to affect non-political participation. These patterns are not easily explained by conventional theories of participation, including mobilization by elites, differential costs, and altruistic preferences. Qualitative interviews suggest that violence may lead to personal growth and political activation, a possibility supported by psychological research on the positive effects of traumatic events. While the generalizability of these results requires more evidence to judge, the findings challenge our...
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Working Paper
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March 01, 2009
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A randomized evaluation in rural Kenya !nds, contrary to the previous literature, that providing textbooks did not raise average test scores. Textbooks did increase the scores of the best students (those with high pretest scores) but had little effect on other students. Textbooks are written in English, most students’ third language, and many students could not use them effectively. More generally, the curriculum in Kenya, and in many other developing countries, tends to be oriented toward academically strong students, leaving many students behind in societies that combine a centralized educational system; the heterogeneity in student preparation associated with rapid educational expansion; and disproportionate elite power.
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Published Paper
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January 01, 2009
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This paper tests the effects on the take-up of a preventative health product of two interventions based on behavioral models derived from psychology: varying the framing of the perceived benefits; and having people verbally commit to purchase the product. I find that none of these interventions had a significant effect (whether economically or statistically) on take-up, and that the gender of the household member targeted was also irrelevant. In contrast, I find that take-up is sensitive to price, as in Cohen and Dupas (2008), and is correlated with indicators of household’s wealth.
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Published Paper
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January 01, 2009
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If smokers are well aware of the negative impacts of smoking, why don’t they quit? While nicotine substitutes and counseling have been dominant in smoking cessation programs in developed countries, these programs are costly and often not accessible for the rural poor in developing countries. Researchers Xavier Giné, Dean Karlan, and Jonathan Zinman designed an alternative approach: a commitment contract that provides financial incentives for smokers to quit. The CARES product (Committed Action to Reduce and End Smoking) was introduced and evaluated in the Philippines. The researchers find evidence supporting its effectiveness, offer suggestions on future research and recommendations on how to improve smoking cessation programs.   Full published paper is available here.
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Brief
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December 01, 2008
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In the developing world, access to small, individual loans has been variously hailed as a povertyalleviation tool – in the context of “microcredit” – but has also been criticized as “usury” and harmful to vulnerable borrowers. Prior studies have assessed effects of access to credit on traditional economic outcomes for poor borrowers, but effects on mental health have been largely ignored.
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Published Paper
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December 01, 2008
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This paper evaluates an experiment in which individuals in rural Malawi were randomly assigned monetary incentives to learn their HIV results after being tested. Distance to the HIV results centers was also randomly assigned. Without any incentive, 34 percent of the participants learned their HIV results. However, even the smallest incentive doubled that share. Using the randomly assigned incentives and distance from results centers as instruments for the knowledge of HIV status, sexually active HIV-positive individuals who learned their results are three times more likely to purchase condoms two months later than sexually active HIV-positive individuals who did not learn their results; however, HIV-positive individuals who learned their results purchase only two additional condoms than those who did not. There is no significant effect of learning HIV-negative status on the purchase of condoms.
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December 01, 2008
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Information asymmetries complicate financial relationships. They give rise to problems that force lenders, for example, to rely on contracts that are secondbest solutions both from their own and from borrowers’ perspectives. But while these problems, namely adverse selection and moral hazard, are important in theory, they are difficult to identify and disentangle in practice. Researchers Dean Karlan and Jonathan Zinman take up the challenge with an innovative research methodology. Using an experimental design that randomizes along three dimensions and working with a South African lender, the study isolates the effects of adverse selection and moral hazard, finding strong evidence of moral hazard and weaker evidence of adverse selection on hidden information.
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December 01, 2008
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We use randomized grants to generate shocks to capital stock for a set of Sri Lankan microenterprises. We find the average real return to capital in these enterprises is 4.6%–5.3% per month (55%–63% per year), substantially higher than market interest rates. We then examine the heterogeneity of treatment effects. Returns are found to vary with entrepreneurial ability and with household wealth, but not to vary with measures of risk aversion or uncertainty. Treatment impacts are also significantly larger for enterprises owned by males; indeed, we find no positive return in enterprises owned by females.
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Published Paper
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November 01, 2008
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We present new evidence on the randomization methods used in existing experiments, and new simulations comparing these methods. We find that many papers do not describe the randomization in detail, implying that better reporting is needed. Our simulations suggest that in samples of 300 or more, the different methods perform similarly. However, for very persistent outcome variables, and in smaller samples, pair-wise matching and stratification perform best and appear to dominate the rerandomization methods commonly used in practice. The simulations also point to specific recommendations for which variables to balance on, and for which controls to include in the ex post analysis.
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October 01, 2008
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This paper builds a theory of trust based on informal contract enforcement in social networks. In our model, network connections between individuals can be used as social collateral to secure informal borrowing. We define networkbased trust as the largest amount one agent can borrow from another agent and derive a reduced-form expression for this quantity, which we then use in three applications. (1) We predict that dense networks generate bonding social capital that allows transacting valuable assets, whereas loose networks create bridging social capital that improves access to cheap favors such as information. (2) For job recommendation networks, we show that strong ties between employers and trusted recommenders reduce asymmetric information about the quality of job candidates. (3) Using data from Peru, we show empirically that network-based trust predicts informal borrowing, and we structurally estimate and test our model.
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October 01, 2008
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Experimental economists believe (and enforce the idea) that researchers should not employ deception in the design of experiments. This rule exists in order to protect a public good: the ability of other researchers to conduct experiments and to have participants trust their instructions to be an accurate representation of the game being played. Yet other social sciences, particularly psychology, do not maintain such a rule. We examine whether such a public goods problem exists by purposefully deceiving some participants in one study, informing them of this fact, and then examining whether the deceived participants behave differently in a subsequent study. We find significant differences in the selection of individuals who return to play after being deceived as well as (to a lesser extent) the behavior in the subsequent games, thus providing qualified support for the proscription of deception. We discuss policy implications for the maintenance of separate participant pools.
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September 17, 2008

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