This story originally appeared in our October 22, 2010 e-magazine. Click here to subscribe.
What do we really know about what works and what doesn’t when fighting debilitating global poverty? How can we best leverage limited resources and time to lift the world’s poorest out of this poverty?
What about aid? Does it “work”? Aid agencies operate under the assumption that their money will make a positive difference. But experts dispute the impact of this money. So what paths to development truly maximize results? Where should we concentrate our energies? Should we concentrate on the role of institutions, macroeconomic policies, growth strategies, and other country-level factors? Or should we take a more grassroots approach—concentrating on microeconomic interventions such as conditional cash transfers, bed nets, school lunches?
The recent anthology “What Works in Development?” explains that there are no policy levers that consistently correlate to increased growth. Essentially, growth policy doesn’t necessarily work. And there is nearly zero correlation between how a developing economy does one decade and how it does the next. To make matters worse, there is no consistently proven way to reduce corruption. Even improving governing institutions doesn’t necessarily seem to produce the expected results. A foreboding picture indeed.
So, macro interventions don’t seem to have a clear impact. Do microinterventions?
One micro intervention on its way to proving its worth is the concept of conditional cash transfer. With the success in Mexico of the Oportunidades program, a government social assistance program designed to target poverty by providing cash payments to families in exchange for regular school attendance, health clinic visits, and nutritional support, this concept of conditional cash transfers is gaining momentum. To get payments for food, mothers must bring their children in for regular health checkups and attend informative talks at health centers. Mothers also get cash if their children attend school at least 85% of the time. The payments start after third grade and go through high school, rising each year as dropout rates get higher and a child’s forgone earning potential is higher. Because checks go directly from the central government to mothers whose families meet the requirements, administrative costs and the chance of corruption are reduced.
Through rigorous evaluation, studies have shown that Oportunidades decreases poverty and improves health and educational attainment in regions in which it has been deployed—children are bigger and healthier. Oportunidades has also reduced child labor and led to more schooling. In rural areas, the number of children starting high school increased by 85%. And as a result, it has become a model for programs instituted in other countries.
Building on this, a few years ago, Indian government officials saw the traditional mind-set of Indian women delivering their children in their homes as an obstacle to prosperity. In a country with one of the world’s worst maternal mortality rates—254 deaths per 100,000 live births—the government decided to lure village women to give birth in a cleaner and safer environment, the hospital. But, there was an important enticement here—a cash payment of US$30. And they saw results: in two of the poorest states in India, Bihar and Uttar Pradesh, the number of women giving birth in medical facilities soared from less than 20% in 2005 to nearly 50% in 2008, according to the most recent data available.*
And as you can guess, this isn’t the only positive news from the program. In the recent impact evaluation of India’s Janana Suraksha Yojana program published in the Lancet, this conditional cash transfer program designed to entice women to deliver in health facilities, the findings are encouraging. The program seems to have worked!
But, this comes with a caveat. In this Lancet study, conducted by University of Washington researchers and funded by the Bill & Melinda Gates Foundation, researchers found that the poorest and least-educated women were least likely to take advantage of the government cash incentive. This is most likely because, in rural India, poor men often refuse to allow their wives to go to the hospital. And many women in this class-conscious society say they lack the confidence to enter a hospital—put simply, the hospital is confusing and alien for them.
But back to the good news. These conditional cash transfers are doing more than improving health outcomes. They are improving the monetary situation of the family. And perhaps most importantly, they represent a kind of paradigm shift: India is serious about investing in women.
The World Bank calls investing in women “smart economics” because of research that shows the enormous multiplier effect of advancing women’s economic participation. The case for women’s economic empowerment has advanced so far as to become widespread and uncontroversial. Yet today, women only own 1% of the world’s wealth; have only a 10% share in global income; and occupy just 14% of leadership positions in the private and public sectors (according to CEDPA).
These cash payments and investments in women on behalf of the Indian government mean that the money will trickle down to the rest of the family and to the rest of society. The government is finally getting serious about progress. And the rest of us are learning about aid programs that have the potential to “work.”
* This is just one aspect of a gargantuan effort to overhaul India’s drastically uneven and overburdened health system and bring basic services to the most vulnerable of India’s 1.2 billion people.
Photo by Joe Silver
