Guest post by Jeff Mosenkis of Innovations for Poverty Action. Field researchers in Uganda strategize before going out to track down cash grant recipients nine years laterIt’s been a big week for cash, with two studies out on cash transfers based on data from my IPA colleagues:Craig McIntosh and Andy Zeitlin worked with IPA, USAID, Catholic Relief Services, and GiveDirectly in Rwanda to compare a standard WASH (water/sanitation/hygiene) and nutrition program to cash. You can read the summary, brief, or full paper from IPA, or very good article from Dylan Matthews at Vox, or blog post (with link to longer brief) from Sarah Rose and Amanda Glassman at CGD. The upshot is that they RCTed both the program and two levels of cash, one calibrated to be of similar cost to the nutrition program
Jeff Mosenkis (IPA) considers the following as important: battman, cash transfers, development, Economics, Germany, Kenya, links, methods, miscellany, news, Poverty, Research, Uganda
This could be interesting, too:
Lars Pålsson Syll writes The misuse of mathematics in economics
Lars Pålsson Syll writes DSGE models — a macroeconomic dead end
Lars Pålsson Syll writes Economists — people biased toward overconfidence
Lars Pålsson Syll writes The one logic lecture mainstream economists did not attend
Guest post by Jeff Mosenkis of Innovations for Poverty Action.
- It’s been a big week for cash, with two studies out on cash transfers based on data from my IPA colleagues:
- Craig McIntosh and Andy Zeitlin worked with IPA, USAID, Catholic Relief Services, and GiveDirectly in Rwanda to compare a standard WASH (water/sanitation/hygiene) and nutrition program to cash. You can read the summary, brief, or full paper from IPA, or very good article from Dylan Matthews at Vox, or blog post (with link to longer brief) from Sarah Rose and Amanda Glassman at CGD.
- The upshot is that they RCTed both the program and two levels of cash, one calibrated to be of similar cost to the nutrition program (with about $117 going to the participants), and another much larger cash transfer (about $532 – for comparison the average yearly income is about $700 in Rwanda). Neither the nutrition program nor the small cash transfer had many effects, but the large cash transfer did help on several outcomes. Some might read this as “cash wins,” but an equally valid take would be that bigger investments work better than smaller ones: The smaller cash amount, equivalent to the WASH program, didn’t have many effects on health outcomes either.
- Cyrus Samii points to a this paragraph as a real key in thinking about the contribution of the cash comparison idea:
This points to an inherently different way of thinking about cash-transfer programs as a ‘benchmark’. While transfer programs maximize scope for choice and therefore provide an important window on beneficiary priorities, a comparison to other more targeted programs will inevitably require policymakers to explicitly make tradeoffs across outcome dimensions, across beneficiary populations, and between large benefits for concentrated subgroups or small benefits that are diffuse over a broader target population. By contrast with the index fund analogy, part of the value of cash transfer programs as a benchmark is that they may require donors to be explicit about their preferences, and to justify interventions that constrain beneficiary choices.
- Also, see this interesting follow-up discussion between Andy Zeitlin and Tavneet Suri on benchmarking comparisons (somewhat technical).
- And Craig and Andy just posted a piece themselves explaining their thinking and interpretation of the study on the Development Impact Blog
- The other study , with Chris Blattman, Nathan Fiala, and Sebastian Martinez, looked at a ~$400 per person grant (ostensibly to get a career off the ground) in Uganda. This isn’t the first look at the program, in fact it’s the third check-in, nine years after the money was handed out.
- First, I can’t stress enough how hard the field staff in Uganda (including the folks above) worked to do the detective work tracking down the people nine years after the program and convince them to sit for several-hour interviews about their lives, families, and livelihoods.
- Findings-wise, the cash recipients had been doing better economically than a comparison group, both two and four years after the first transfer. But by year nine, that control group who didn’t get anything had caught up and were doing pretty much just as well. This might want to help us reconsider how we think about programs that offer a theoretical boost “out of poverty” and whether it really changes how things would have been otherwise. (Not that four plus years of increased earnings from a one-time grant isn’t a good outcome for a program.)
- Nice thoughts from Berk on the implications, and another good article again from Dylan Matthews. There Berk makes a good point that I think often gets lost in general “cash” discussions. Cash isn’t one intervention, it’s a category of interventions that can do many different things, and there are an infinite number of variations (who in the household gets it, how much, all at once or spread out over time, conditional on them doing something or free, if over time do they know how long it’s guaranteed for?), which we should expect to do different things. As Berk also points out at the end of the Vox piece:
“We’re not arguing ‘cash good versus cash not good.’ Cash is good!” he said. “But the only way to give it isn’t, ‘I’ll drop 1,000 bucks on you and go away.’”