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[Thai Economics Library | Archives| Currency Crisis 2007| Entrepreneurs]
February 12, 2008

MIT's Poverty Action Lab:
Proven benefits from NGO activities?

By Jon Fernquest



Last week's Bangkok Post ran an article from Nature magazine on the innovative new Poverty Action Lab at Massachusetts Institute of Technology, one of the world's top technology universities. [Link to MIT's Poverty Action Lab]

(See picture of deworming medicine being administered to an Afghani child, benefits proven by clinical trials)

The success of a for-profit venture or project is easy to determine. Either the venture makes money or it goes out of business.

The success of non-profit project launched by an NGO, for instance, is more difficult to determine. Should we just take the NGO's word for it, that the project actually helps people? Or should an NGO be held accountable in some way for the money that people donate for the project?

In some extreme cases NGOs even use their own non-profit status as a shield from criticism. After all, who would criticize or seek proof of performance from someone who is just trying to help other people without profiting themselves?

There are non-profit fundraisers who do make a profit and the directors of NGOs sometimes have comfortable salaries. NGO assets like cars or houses sometimes mysteriously slip into private ownership. Since the non-profit sector is not really regulated in many places, non-profit financial statements are often not transparent and do not adequately represent the use and misuse of donor funds for the public to see.

(See photo on right of the largest mosquito net in the world, built for a conference on malaria in Africa where the largest number of people die from the disease)

Although most of the Poverty Actrion Lab's projects have been targeted to poorer LDCs in Africa, their approach is more broadly applicable to the unregulated non-profit sector in richer countries like Thailand:
Faced with the multitude of problems that result from and contribute to poverty, how can you decide which strategy to use to tackle an issue? One innovative lab is borrowing ideas from the medical world in a bid to find out.

The Abdul Latif Jameel Poverty Action Lab (J-PAL) is pioneering the concept of randomised trials, more commonly associated with drug safety tests, to assess what works and what doesn't in development and poverty interventions. The strategy has inspired the World Bank, which in December will choose winning proposals in a 10.4 million (480 million baht), three-year programme that will use randomised trials to study the fight against poverty.

Based at the Massachusetts Institute of Technology in Cambridge, J-PAL was founded in 2003 and this year has more than 60 projects on the go in 21 countries. Esther Duflo, one of the lab's founders, says she set it up to help rigorously test the many programmes that are meant to aid the poor.

"Whereas one would not dream of putting a new drug on the market without a randomised trial," she says, "such evaluations were, and to a certain extent still are, very rare for social programmes."

Clinical trials have shown that specific actions can produce specific beneficial results.

Worming children in rural Africa increases school attendance. Hiring local woman to help underperforming students in India actually raises test scores:

Although young, J-PAL has already notched up some successes. One of its first studies, involving more than 30,000 youngsters in rural Kenya, found that worming children reduced the number of days taken off school by 25 per cent. Another study, in India, showed that hiring young local women to help at schools with underperforming students significantly increased test scores, and was six times cheaper than the computer-assisted learning already being tested. "J-PAL's results in education are solid and important," says Nilima Gulrajani, an expert in aid management at the London School of Economics and Political Science.

Planning trials in poor countries is very different from clinical trials, says J-PAL's executive director, Rachel Glennerster. Rather than set up its own experiments, J-PAL joins forces with groups that are already working in the field. The worming project, for example, had already been planned. J-PAL just joined the project, which was then slightly rethought to allow the science to be done.

Adding research protocols can be a hassle for development groups, says Glennerster, so it takes a lot of discussion and goodwill before J-PAL can join a project and start doing trials.

Giving things away for free has always been controversial.

That people will waste things they don't have to pay for, is a common belief, but evidence was not presented to support this belief.

In fact, there is now evidence that indicates that giving away mosquito nets for free actually does work:

Pascaline Dupas, a researcher at Dartmouth College in Hanover, New Hampshire, and one of a network of researchers who work with J-PAL, has been tackling a more political issue - mosquito nets.

Treated with insecticide, mosquito nets are one of the main new tools for controlling malaria, but debate has raged over whether widespread use is best encouraged by handing the nets out free, or charging for them to encourage responsibility. The US Agency for International Development pursues the latter policy, but on the basis of little hard evidence.

In a trial set up in Kenya, Dupas randomised the price at which pregnant women could buy nets. Her results, which are being prepared for publication, come down firmly on giving nets out free. She found that people who got free nets used them just as responsibly as those who paid for them. Moreover, charging even 75 (23 baht) reduced net use by 75 per cent.

Individual rewards for doing things that are socially important but not important to the individual have also worked:

"The lab is also exploring procrastination, which can actually be a major public-health problem. HIV testing is important for preventing the spread of Aids, but many patients don't pick up their test results. In a soon-to-be-published study, J-PAL has found that giving people as little as 10 (three baht) as a reward for picking up their results on the day they are ready significantly increases compliance."

A innovative way to remind tuberculosis patients to take their important medication is also in the works:

The lab is currently brainstorming similar ideas to improve a major problem in tuberculosis (TB) treatment. Patients with TB must take their drugs every day for six to eight months to eliminate infection, but often stop as soon as they feel better. With mobile phones now more common in poor countries, the researchers have come up with an idea. A text message reminds patients to take their pill. On opening the pill wrapper they get a code that gives them three minutes' free call time. "I'd love to test this in a randomised trial," says Glennerster.

(Source: Nature magazine, 28 November 2007 , permanent-link)


Vocabulary:

Poverty Action Lab (J-PAL) at MIT - a laboratory for testing whether poverty interventions funded by foreign aid actually work or not
lab (See website and Wikipedia)

Massachusetts Institute of Technology (MIT) - one of the top engineering and science research universities in the US (See Wikipedia)

for-profit - a company, an organisation that has making a profit as its goal

a venture - a risky business project that might succeed or fail

goes out of business - business stops operating

a non-profit - an organisation that does not have making a profit as a goal

NGOs - Non-Governmental Organisations (See Wikipedia)

take their word for it - trust them, believe what they say without other proof

X held accountable for Y - if Y does not succeed, X is not rewarded

fundraisers - people whose job and profession is to raise money for non-profit organisations

LDCs - Lesser Developed Country (See Wikipedia)

more broadly applicable - is true for many cases outside of this limited area

multitude - a large number

X contributes to poverty - X is one cause of poverty, making poverty worse

tackle an issue - solve a problem

in a bid to - trying to do something, might not be successful

pioneering - be the first to do something

a trial - a test

clinical trials, experimental trials - test using an experiment (See Wikipedia on experiment)

assess - check, evaluate, or investigate something in order to make a judgement about it

poverty interventions - try something out to reduce the negative effects of poverty

rigorously - doing something in a very careful, thorough, and strict way

putting...on the market - offering for sale to customers

notched up some successes - had some successes

worming children, deworming children - giving children medicine to get rid of parasitic worms living inside them (See Wikipedia on parasitic worms)

a protocol - a set of rules about the proper way of doing something

research protocols - a set of rules for doing research

a hassle - when something is difficult to do

goodwill - a friendly and helpful attitude towards other people

doing trials - doing experiments to test whether an approach to solving a problem works or not

controversial - people disagree about it

insecticide - a chemical that kills insects

a debate - a discussion on a subject in which people have different views

debate has raged over - a very energetic discussion with different views

US Agency for International Development (USAID) - the United States federal government organization responsible for most non-military foreign aid provided to other countries by the US government (See Wikipedia)

evidence - something that you read or experience that causes you believe that something is true or really exists

hard evidence - something that really convinces you

procrastination - waiting until the last minute or the deadline to do something, when you could have finished it a lot earlier

significantly increases - increases by a large and noticeable amount

compliance - doing what you are expected to do in an agreement

tuberculosis - a deadly long-term contagious disease of the lungs, that once more become a problem with the rise of AIDS (See Wikipedia)

in the works - has already been planned, has began already

a trial - a test done to see if something works before adopting it permanently

randomised trial - using random samples to statistically test whether something works (See explanation at Poverty Action Lab)



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