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A Multifaceted Program Causes Lasting Progress for the Very Poor

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A Multifaceted Program Causes Lasting Progress for the Very Poor RESEARCH ◥ Instead, we examine the “sufficiency” claim: A RESEARCH ARTICLE SUMMARY year after the conclusion of the program, and 3 years after the asset transfer, are program participants earning more income and achiev- DEVELOPMENT ECONOMICS ing stable improvements in their well-being? RATIONALE: We conducted six randomized A multifaceted program causes trials in Ethiopia, Ghana, Honduras, India, Pakistan, and Peru with a total of 10,495 par- lasting progress for the very poor: ticipants. In each site, our implementing part- ners selected eligible villages based on being ◥ in geographies associated Evidence from six countries ON OUR WEB SITE with extreme poverty, and then identified the poorest Abhijit Banerjee, Esther Duflo, Nathanael Goldberg, Dean Karlan,* Robert Osei, Read the full article at http://dx.doi. of the poor in these villages William Parienté, Jeremy Shapiro, Bram Thuysbaert, Christopher Udry org/10.1126/ through a participatory science.1260799 wealth-ranking process. .................................................. INTRODUCTION: Working in six countries access to savings accounts and health infor- About half the eligible par- with an international consortium, we investi- mation or services. In each country, the pro- ticipants were assigned to treatment, and half gate whether a multifaceted Graduation pro- gram was adjusted to suit different contexts to control. In three of the sites, to measure with- gram can help the extreme poor establish and cultures, while staying true to the same in village spillovers, we also randomized half Downloaded from sustainable self-employment activities and gen- overall principles. This multipronged approach of villages to treatment and half to control. erate lasting improvements in their well-being. is relatively expensive, but the theory of change We conducted a baseline survey on all eligible The program targets the poorest members in a is that the combination of these activities is participants, as well as an endline at the end village and provides a productive asset grant, necessary and sufficient to obtain a persistent of the intervention (typically 24 months after training and support, life skills coaching, tem- impact. We do not test whether each of the the start of the intervention) and a second porary cash consumption support, and typically program dimensions is individually necessary. endline 1 year after the first endline. We mea- http://science.sciencemag.org/ sure impacts on consumption, food security, productive and household assets, financial inclusion, time use, income and revenues, phys- ical health, mental health, political involve- ment, and women’s empowerment. RESULTS: At the end of the intervention, we found statistically significant impacts on all 10 keyoutcomesorindices.Oneyearafterthe end of the intervention, 36 months after the productive asset transfer, 8 out of 10 indices on March 21, 2018 still showed statistically significant gains, and therewasverylittleornodeclineintheim- pact of the program on the key variables (con- sumption, household assets, and food security). Income and revenues were significantly higher in the treatment group in every country. House- hold consumption was significantly higher in every country except one (Honduras). In most countries, the (discounted) extra earnings ex- ceeded the program cost. CONCLUSION: The Graduation program’s primary goal, to substantially increase con- sumption of the very poor, is achieved by the conclusion of the program and maintained 1 year later. The estimated benefits are higher than the costs in five out of six sites. Although more can be learned about how to optimize the design and implementation of the program, we establish that a multifaceted approach to in- creasing income and well-being for the ultra- poor is sustainable and cost-effective.▪ The list of author affiliations is available in the full article online. *Corresponding author. E-mail: [email protected] Cite this article as A. Banerjee et al., Science 348, 1260799 (2015). DOI: 10.1126/science.1260799 772 15 MAY 2015 • VOL 348 ISSUE 6236 sciencemag.org SCIENCE RESEARCH ◥ just providing training, coaching or a cash trans- RESEARCH ARTICLE fer), the thinking behind the program is that the combination of these activities is necessary and sufficient to obtain a persistent impact on a large DEVELOPMENT ECONOMICS fraction of the beneficiaries. We address the “sufficiency” claim: Is the Grad- uation approach effective and cost-effective, and A multifaceted program causes can it be implemented at scale and in different contexts and cultures? Whether all the ingre- dients of the program are individually necessary lasting progress for the very poor: is not tackled here and will need to be dealt with in future work. Evidence from six countries A key feature of the BRAC approach is that, while comprehensive, it is well codified, scalable, Abhijit Banerjee,1,2,3,4 Esther Duflo,1,2,3,4 Nathanael Goldberg,5 Dean Karlan,2,3,4,5,6* and replicable. BRAC has already implemented Robert Osei,7 William Parienté,4,8 Jeremy Shapiro,9 the program at scale in Bangladesh. As of 2011, Bram Thuysbaert,5,10 Christopher Udry2,3,4,6 BRAC had reached close to 400,000 households, and a further 250,000 were scheduled to be reached We present results from six randomized control trials of an integrated approach to between 2012 and 2016 (6). It has now also been improve livelihoods among the very poor. The approach combines the transfer of a replicated in about 20 countries, including the six countries that are studied here. A high-quality productive asset with consumption support, training, and coaching plus savings Downloaded from encouragement and health education and/or services. Results from the implementation RCT, conducted independently but simultaneously of the same basic program, adapted to a wide variety of geographic and institutional with this study, has shown the BRAC program in contexts and with multiple implementing partners, show statistically significant Bangladesh to be very effective (6). Two years cost-effective impacts on consumption (fueled mostly by increases in self-employment after graduation, households have expanded their income) and psychosocial status of the targeted households. The impact on the poor self-employment activities, diversified out of agri- households lasted at least a year after all implementation ended. It is possible to culture and livestock, reduced casual labor, and make sustainable improvements in the economic status of the poor with a relatively increased consumption. Previous nonrandomized http://science.sciencemag.org/ short-term intervention. studies of the BRAC program (7–9)foundsimilar impacts. ore than one-fifth of the world’spopula- sible to reliably improve the livelihoods of the Between 2007 and 2014, we conducted a mul- tion lives on less than purchasing power poorest households by giving them access to self- tisite RCT of the Graduation program. The sites parity (PPP) US$1.25 a day, and there is employment activities, or is this entire approach were chosen as part of an effort led by the Ford M an emerging international consensus that flawed? In particular, is it possible to come up Foundation and Consultative Group to Assist the this share should (and can) be driven with a model for doing so that can be imple- Poor (CGAP), referred to here as the Graduation closetozeroby2030(1, 2). Reaching this ob- mented by a wide variety of organizations and Program Consortium. The programs were imple- jective will require enabling the poorest families, works in a wide range of geographic, institutional, mented by six different organizations in six coun- who are often the most marginalized within their and cultural contexts? tries (Ethiopia, Ghana, Honduras, India, Pakistan, villages, to shift from insecure and fragile sources We present results from randomized control and Peru), but overall planning on the programs on March 21, 2018 of income to more sustainable income-generating trials (RCTs) in six countries of a particular ap- and evaluation were coordinated from the onset activities. One possible avenue, popular with both proach to foster self-employment activities among (10). Treatment was randomly assigned among development organizations and governments, is the very poor. Originally designed and imple- eligible households. Data were collected at base- to promote self-employment activities (such as mented by BRAC, a large Bangladeshi NGO that line and immediately after the programs ended, cow rearing or petty trading). Past efforts to re- runs several country-wide programs, the “Gradua- 2 years later (“endline 1”),andagain1yearafter duce poverty by encouraging these types of activ- tion” program provides a holistic set of services, the programs ended, i.e., about 3 years after the ities among the poor, however, have often been including the grant of a productive asset, to the beginning of the programs (“endline 2”). We re- plagued by implementation problems and been poorest households in a village (referred to by port pooled results from all the sites (21,063 deemed failures (3). For example, India’sIntegrated BRAC as the “ultra-poor”). The beneficiaries are adults in 10,495 households), as well as site-by- Rural Development Program (IRDP) is believed identified through a participatory process in a site results. to have been both poorly targeted and ineffective village meeting, followed by a verification visit by The main contribution of this study is the eval- (4, 5). However, in recent years, several large
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