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Projects: Using Evidence to Fight Poverty
Even though some of the Millennium Development Goals (MDGs)—such as the target of halving extreme poverty—will be achieved on a global scale by 2015, progress will have been uneven and poverty will remain firmly on the international agenda. Countries such as China and India, which can harness the opportunities of globalization, are well on track to reach the goals. Yet at the same time, many countries, especially those with the lowest levels of development, are far from realizing any of the MDGs. |
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But this global picture clouds the successes of individual projects in specific areas or sectors that have tangibly improved the living standards of the poor along various dimensions. Systematically identifying and learning from such projects provides an extraordinary opportunity to improve the design of development interventions and to lift many more people out of poverty. One promising means of identifying what works in fighting poverty is to conduct randomized controlled trials (RCTs), where only a subset of eligible individuals gets a “treatment” (a conditional cash transfer, for example) and all others comprise the “control” group. This approach took off in the early 2000s with the establishment of MIT’s Poverty Action Lab and Innovations for Poverty Action at Yale University. The work has gained enormous momentum over the last decade, leading some observers to speak of a “new development economics”. Two new books based on a wealth of accumulated experiences with RCTs in different areas of development policy (“Poor Economics” by Abhijit Banerjee and Esther Duflo and “More than Good Intentions” by Dean Karlan and Jacob Appel) have received a great deal of media attention and will make the approach known well beyond the narrow community of development specialists. What role can RCTs play in the fight against poverty? In what circumstances have careful randomized evaluations based on field experiments shown specific anti-poverty programs to be effective? Does this approach carry the potential to change fundamentally the way development policy is pursued—or does it represent just one item among many in the policy-makers’ toolkit? What are the limitations of the approach? | |
| Proposed Solutions |