Nov 24, 2006

What Works, An Analysis

by Laura Starita

In a recent New York Times article, journalist Tina Rosenberg highlights eight programs that work to reduce poverty in the developing world. Her list includes universal immunization, giving the poor the opportunity to get titles for the land they inhabit, microcredit, providing financial incentives to parents to send their children to school, building roads to link villages, targeting heads of families as decision makers, creating a green revolution in Africa and creating partnership programs to ensure people with tuberculosis take their medications. These eight programs, the article argues, have had quantifiable impact on the communities in which they have been tested - and many of them are market-oriented, so they have a broader, economy-generating impact.

An article like this one is brave and useful in many ways. First, it puts a stake in the ground with a focus on the effectiveness of anti-poverty efforts - too much of what we read today tells us about the problem, not about possible solutions. By writing about what works, Rosenberg gives those who may have already succumbed to apathy the feeling that the world’s problems are not intractable, and that we can do better.

Having said that, some of the article’s chosen programs should come with a ‘proceed with caution’ label, not because they don’t work, but because they don’t work all the time. For example, title programs may have made it easier for the poor in some countries to own their land, but they have not (and Rosenberg acknowledges this) necessarily resulted in poverty reduction. The reason is that the people with the land title are still poor, making their access to credit as limited as before. Likewise, studies of microcredit programs have shown an overall impact on poverty reduction, but a recent World Bank report shows that the poverty reduction over time decreases substantially as the market becomes saturated. In addition, loans given to men have no or negative impact on household consumption (a major indicator of poverty). Only loans to women have a positive impact.

It is important to think about market-tested programs that work, but it doesn’t do away with the need to apply general knowledge to specific situations.

New York Times: How to Fight Poverty: Eight Programs that Work