A fascinating This American Life/ Planet Money dream team podcast on the effectiveness and absurdity of of dropping all pretense of developing education, institutions or capabilities in poor countries and just giving out straight cash. The follow-up response has been awesome, with posts in the NYT, NYT Magazine and of course, a clever summary with provocative highlights from Chris Blattman.
According to David Kestenbaum of Planet Money, these cash hand-outs are sponsored by nerds:
Until pretty recently, the charity world has been about doing stuff that helps, without thinking really about how much does it help exactly and how much does it cost? But there does seem to be this shift that's happening. Philanthropy is getting nerdier and more data driven.
Is this because economists are trying to take over the world? Maybe. GiveDirectly is an organization, not surprisingly run by two Harvard-trained J-PAL affiliated economists. Of course, GiveDirectly is doing Randomized Control Trials (RCT) to evaluate the impact of these cash handouts on all sorts of outcomes (family dynamics, height, nutrition, housing, asset ownership and education). Kestenbaum again:
This study is not just about how well giving money works. Its also a challenge to other charities....Providing training, flying in experts, paying staff- all that costs money. If you think all your doing is better than just giving money, prove it.
As a friend said, this seems a lot like when academic economists jump into a very complicated real-life situation and claim to know how to do everything better (perhaps unsurprisingly, she dates an economist). But when you think about the impact of development in terms of dollar spent on organization websites, a states-side office and director salaries versus a dollar spent in Meatu by Joe the Tanzanian Plumber, it is hard to make a strong case for all that costly stuff without data. It's no surprise that the economists at GiveDirectly despise glossy aid brochures and are rigorously and empirically evaluating their own program. So what do other aid organizations think about this challenge to prove effectiveness? From Heifer International:
As an African woman, that sounds to me like a terrible idea... We're not about experiments. These are lives of real people... Data cannot capture everything. I am a proud woman and I have a voice. You can't measure that.
Denial of experimentation? CBlatts nails it on the head:
This is the way the Heifers of the world fool themselves. When you give stuff to some people and not to others, you are still experimenting in the world. You are still flipping a coin to decide who you help and who you don’t, it’s just an imaginary one.
For the amount of money that goes into aid organizations, yes, they should absolutely be evaluated with rigor and data. But it also seems likely that Heifer does bring more than a cow. They bring business and agriculture training, share milk production and technology knowledge, heighten business curiosity and even possibly, include this elusive idea of empowerment. Or, they like to think they do anyway. Do we, as economists, think we can measure all that?
Hat tips: COCO & DW