If you’ve bought into giving cash to the poor, this should be your next move

…we propose that donor governments create a fund devoted exclusively to supporting cash transfer programs. The fund would accept competitive applications from organizations—both private and social sector—that wish to conduct transfers. It should give priority to organizations with a demonstrated track record on a set of well-defined metrics, such as cost, speed, and targeting accuracy. And it should prioritize organizations that propose to conduct randomized impact evaluations of cash transfers—and especially evaluations that would fill a gap in our understanding about their impact, inform the design of such programs, or allow us to better compare alternative interventions with simply giving cash.

Such a fund would have two effects. For organizations that already deliver cash transfers, it would incentivize further investment in improving their systems as they compete for grants. And for organizations and individual decision-makers on the fence, uncertain about the role of cash transfers in their field, the fund would significantly reduce the cost of experimentation.

That is Michael Faye, Paul Niehaus, and me in Foreign Affairs, looking back a year later at our 2014 article, Show Them the Money, and what has changed in the cash transfer discussion.

A personal account of why I think Angus Deaton won the Nobel Prize

I was a master’s student at Harvard, more interested in economic history than anything else, when my econometrics professor, Rob Jensen, hired me to spend the summer in India to run a household survey — a questionnaire on every family member’s work activities, earnings, health, education, and what food and items they consumed. I didn’t know the first thing about household surveys, and so I bought a couple of books to bring with me.

One was Deaton’s Analysis of Household Surveys, a technical manual on analyzing poverty data. The other was Deaton’s hefty 3-volume manual on Designing Household Surveys, written with Margaret Grosh, which weighed probably 20 pounds in reality (and 50 in my memory). I needed a separate suitcase to bring them all to India. It’s only when I arrived I realized that Volume 1 held a CD on the back page with the full text of the books. Even so, I couldn’t bring myself to give away these paper treasures, and carted the heavy bastards around the country for four months.

An excerpt from my piece in Foreign Policy today. There were multiple times in my career where Deaton deeply influenced my direction. He couldn’t be a better pick, in my opinion.

In the piece, I also note how Deaton scooped me on my dissertation twenty years before I started, and what I think of his new critique of randomized trials.

“Society is paying a high price in dollars and human suffering for wrong assumptions.”

That quote is from psychologist Richard Nisbett, on the tragedy of not enough experimental studies of social programs like Head Start. (Hat tip to Paul Lagunes.)

Regular blog readers will not need to be convinced of this point (and will even think, as I do, that the experimental fad is getting carried a little too far). But I mention this quote for two reasons:

  1. It is a particularly elegant phrase in the plea for more evidence of any kind
  2. I happened to have spent the last couple of weeks reading a bunch of psychology meta-analyses, a field that (unlike the shameful state of economics or political science) actually has enough experiments and evidence to run them. But I have noticed a number of other tragedies of evidence inflicting a high price on society:
    1. The huge number of social experiments with samples of a 100 people or less. The famous Perry preschool study had only 123 pupils! Ridiculous and hardly better than garbage, at least without a meta-analysis.
    2. The huge reliance on just one or two outcomes available in administrative data, rather than going down the expensive, difficult, but rewarding route of tracking people down and convincing them to talk to you.
    3. Few studies come from a repressentative population, with tons of unknown selection into the sample. So it’s unclear how to generalize.

This is all to say we often speed past one tragedy of evidence only to come to a screeching halt at the next one, randomizing doesn’t teach the data to sing in perfect harmony.

IPA’s weekly links

Guest post by Jeff Mosenkis of Innovations for Poverty Action.


  • NPR had a nice profile of an evaluation of whether teaching girls in Zambia Harvard Business School’s negotiation tools can help them navigate the many challenges to staying in school.
  • In clinical trials painkiller placebo effects have been getting stronger, even though the actual drugs haven’t (via Nathanael G.)
  • The story of a man who used statistics to beat a game show (also the Price is Right).
  • Political Scientist Ryan Briggs’ newborn son has a rare and life-threatening condition, he doesn’t want people to donate to it.
  • It’s Nobel Prize week, the Nobel for Physiology or Medicine went to those behind treatments for malaria and roundworm parasites, which largely affect the developing world. New Scientist has a very interesting interview with the winning Chinese scientist who after 240,000 tries at finding a malaria drug, started searching old Chinese medicine recipes. She eventually discovered artemisinin, but still remained anonymous for decades.

And, the econ Nobel will be given out Monday. Previous winner Robert Shiller was recently kicked off an overbooked flight on his way to a conference. He also ate cat food to prove all the “flavors” taste the same, even though manufacturers are happy to admit this. So when this year’s prize is announced, those who don’t win shouldn’t feel bad – the Nobel won’t keep your seat on a plane, and your best work may be ahead of you anyway.

The best 400 words you can possibly read on how ISIS gets people to fight

One of the nicest discussions I’ve see:

Explanations for ISIS’s behavior, and for political violence more generally, usually fall into two camps. The rationalist camp argues that violence is used for strategic purposes. People participate – and leaders use violence – when the benefits to violence exceed the costs. The rationalists also assume that leaders are cold, calculating strategists who seek to increase or maintain their power. Conversely, the psychological camp argues that political violence is better explained by emotional grievances, in defense of sacred values, or out of ethnic or religious hatred.

The divide between rational or psychological explanations for political violence is a false one. Insurgents and groups in political violence use money, promised protection, and other “rationalincentives to get people to participate. Opportunity also plays a large role. Economic shocks and poverty are good predictors of the onset of political violence and who ends up participating. Tactically, groups such as ISIS may seek to spoil any kind of rapprochement between more moderate groups and intentionally foment a backlash.

Rational incentives and motives are important, but so are psychological motives. Emotions are powerful tools. Fear and anger have the ability to rally individuals to a cause despite the risk. Brutal tactics can engender fear and be used to intimidate rival groups or challengers. Sacred values have the capacity to motivate people to make large sacrifices on behalf of their group. They also may make people less willing to be “bought off.” Being exposed to violence, or actually perpetrating it, strengthens group cohesion. It also lowers restraint against subsequent violence.

The failure to comprehend the complementary role of rational and psychological motivations results in an incomplete model of political violence. Political entrepreneurs use emotions strategically to both recruit insurgents and to polarize society for their benefit. Providing a salient cause to rally around, in tandem with benefits for participation, can motivate people to fight. Ideology and group identity is one solution to the difficult problem of maintaining cohesion and preventing defection that can hobble insurgent groups. Elaborate and time-consuming group rituals, hardline religious practices, and high financial costs of joining can further screen out the less committed. Groups and leaders may use certain brutal tactics or cultivate a reputation of brutality as a psychological weapon against rivals and those who would challenge them. But they may also use it as a way to further ensure internal group cohesion.

That is Thomas Zeitzoff writing at Political Violence @ a Glance.

The broader intellectual debate—why do men fight, riot, and rebel?—is a good chunk of my undergraduate course. I would have cited a different literature than Thomas, but that’s probably because I haven’t read half the things he points to. But I will.

Why commit violence is still a question with incomplete answers and relatively bad theoretical underpinnings, with no unifying framework. I think that will change a great deal in the next 10 years. Most of those advances won’t be from field experiments, but selfishly  I’d like to think there are some good examples.

Everything I ever knew about political economy I learned from… pirates?

This article argues that gangs, clans, mafias and insurgencies are, like states, forms of governance. This insight is applied to the case of Somali piracy and the article explores whether protectors of piracy were clearly distinct from pirates; and to what extent protectors coordinated their activities across the Somali coastland. It is shown that clan elders and Islamist militias facilitated piracy by protecting hijacked ships in their anchorages and resolving conflicts within and between pirate groups. Protection arrangements operated across clans, as illustrated by the free movement of hijacked ships along the coastline and the absence of re-hijacking after ransoms were paid. Piracy protection can be thought of as part of a continuum of protection arrangements that goes from mafias to legitimate states. The article concludes by highlighting the implications of the findings for the debate on state-building and organised crime.

A new article by Anja Shortland and Federico Varese. (I’m sorry it is gated and I do not see an ungated version online. If you see one, please link to it in the comments). Hat tip to @DavidSkarbek.

I also stumbled upon another article by Shortland brilliantly called “Can We Stop Talking about Somali Piracy Now? A Personal Review of Somali Piracy Studies

All of this reminds me of one of the best paper titles ever, also about pirates, by Peter Leeson: An-arrgh-chy. Later, he wrote a book called The Invisible Hook. I love it for that reason alone.

Three unexpected facts about beer

Historians speculate that prehistoric nomads may have made beer from grain and water before learning to make bread. The ancient Egyptians who built the pyramids got paid by beer, bread and green onions. Different cultures use different grains to make beer; and beer served for nourishment, pain relief, and socializing.

Swinnen suggested that the Low Countries (Holland and Belgium) won their independence from the Spanish because of beer. They financed their armies from beer tax, while the Spanish relied on tax on silver. The beer won. We learned that people consume more beer than any other alcohol and that the gap is increasing in spending and consumption. As in many other arenas, China has overtaken the U.S. as the largest consumer of beer.

What’s more surprising is that Russians consume more beer than vodka. Swinnen suggests that one reason could be that advertisements of vodka were disallowed in 1995. He also suggests that beer consumption increases with per capita income, but that once GNP per capita is greater than $30,000, beer consumption declines – this has been true in Germany, the U.S., and Belgium. But overall production continues to increase due to increased export.

That is David Zilberman from Berkeley ARE, who has many more interesting things to say on the subject. He blogs here.

Links I liked

  1. A terrific article on how the effectiveness of depression treatments have been overstated because researchers didn’t publish null results
  2. Bono on development: “I’m late to realizing that it’s you guys, it’s the private sector, it’s commerce that’s going to take the majority of people out of extreme poverty and, as an activist, I almost found that hard to say”
  3. A guide to multiple comparisons in your empirical work (and more terrific resources from EGAP)
  4. Berk Ozler brings some measure of sanity to the “just give cash” mantra
  5. Friends don’t let friends use instrumental variables?
  6. The latter two links come from the Development Impact blog, which if you have not heard me say before: follow it.
  7. Best travel ad ever?

The final word on the Worm Wars

I was on vacation when this came out and so didn’t blog, but this is the final word on the Worm Wars as far as I’m concerned. Bravo to Macartan Humphreys.

The one thing I will add (apparently I don’t know the meaning of “final word”): will a donor, implementer, and researcher please step up and start another long term trial in another country? Kenya, being the birthplace of humanity, is also the birthplace of human parasites. Maybe we should not generalize too far from the shores of Lake Victoria.

IPA’s weekly links

Guest post by Jeff Mosenkis of Innovations for Poverty Action.


  • Max Roser reminds us that the data sets above (known as Abscombe’s quartet) all have the same mean and variance, so you should always plot your data. Over at the IFPRI blog Alan de Brauw says don’t worry about R-squared in randomized controlled trials, they’re not designed for that, just use the treatment effect .
  • After a week of pressure largely from the people of Burkina Faso, the recent coup there was undone (h/t Nicolo T).
  • Worm Wars, the video. Apparently doctor, health explainer, and Incidental Economist blogger Aaron Carroll was getting a lot of requests to explain the deworming controversy, replications, and reanalysis, and did a really good job.
  • A new paper (ungated here) by Cilliersa, Dubeb, & Siddiqi find in 60 Sierra Leone villages, the presence of a white foreigner in a classic “dictator” behavioral game increased allocations 19 percent, and this effect was related (negatively) to how much outside aid the village was exposed to. More discussion from New York Magazine’s Science of Us.
  • The Busara Center for Behavioral Economics (an amazing resource for behavioral scientists) in Nairobi and IPA-Kenya had a volleyball match last week resulting in some serious online Econ Trash Talk (click to expand the conversations).


And last week in New York, a competition of worshipers intersected literally when the huge lines to see the Pope and at the Apple store for the new iPhone crossed on 5th Avenue. There’s been at least one time when choosing an apple over God didn’t work out so well…

Fear, and what a century-old theologian can teach the modern social scientist

Some researchers have shown that the stress and preoccupation from being poor causes people to think differently and make worse decisions. Because of this, some colleagues and I started thinking what might fear do to the brain and behavior–fear of violence, of crime, of a repressive regime.

Coincidentally, a couple of months ago I picked up Ta-Nehisi Coates’s Between the World and Me, one of the most talked-about books of the year. It’s a book about what it means to be black in America today: fearful. Fearful of police. Fearful of thugs on the streets. All because, says Coates, there are people who have the power to destroy your body.

To be honest, Coates didn’t connect with me. Now, there are obvious reasons this might not connect with me (not the least of which is that I grew up a white man in suburban Canada). But I have spent a lot of my career working with people fearful of violence, and so I’m not completely disconnected.

Then my sister-in-law, a successful model and theologian (that’s a different story) heard about my research project and told me I should read Howard Thurman’s Jesus and the Disinherited. Thurman was an African American theologian who deeply influenced Martin Luther King Junior. And what I read connected more than any book I’ve read this year.

Fear is one of the persistent hounds of hell that dog the footsteps of the poor, the dispossessed, the disinherited. There is nothing new or recent about fear—it is doubtless as old as the life of man on the planet. Fears are of many kinds—fear of objects, fear of people, fear of the future, fear of nature, fear of the unknown, fear of old age, fear of disease, and fear of life itself. Then there is fear which has to do with aspects of experience and detailed states of mind.

Our homes, institutions, prisons, churches, are crowded with people who are hounded by day and harrowed by night because of some fear that lurks ready to spring into action as soon as one is alone, or as soon as the lights go out, or as soon as one’s social defenses are temporarily removed.

The ever-present fear that besets the vast poor, the economically and socially insecure, is a fear of still a different breed. It is a climate closing in; it is like the fog in San Francisco or in London. It is nowhere in particular yet everywhere. It is a mood which one carries around with himself, distilled from the acrid conflict with which his days are surrounded. It has its roots deep in the heart of the relations between the weak and the strong, between the controllers of environment and those who are controlled by it.

When the basis of such fear is analyzed, it is clear that it arises out of the sense of isolation and helplessness in the face of the varied dimensions of violence to which the underprivileged are exposed. Violence, precipitate and stark, is the sire of the fear of such people. It is spawned by the perpetual threat of violence everywhere. Of course, physical violence is the most obvious cause. But here, it is important to point out, a particular kind of physical violence or its counterpart is evidenced; it is violence that is devoid of the element of contest. It is what is feared by the rabbit that cannot ultimately escape the hounds.

Also this:

There are few things more devastating than to have it burned into you that you do not count and that no provisions are made for the literal protection of your person.

…Fear, then, becomes the safety device with which the oppressed surround themselves in order to give some measure of protection from complete nervous collapse. How do they achieve this? In the first place, they make their bodies commit to memory ways of behaving that will tend to reduce their exposure to violence.

The tragedy is that modern social science has very little to say about any of this. If you try to discuss the notion of fear with a normal economist or political scientist, they will look at you oddly, and tell you this is not serious. I speak from recent experience. Unless you make up some stuff about neuroscience or somehow link it to Danny Kahneman, a psychologist who, when invoked, magically bestows legitimacy on all manner of weird ideas. (Then that normal economist or political scientist is still skeptical but no longer thinks you’ve lost your bearings as a scientist)

I got exactly the same reaction when I started running surveys in conflicts ten years ago, studying why rebel groups would abduct children, and what long term effect this had. My dissertation proposal committee told me not to do it. But I believed, and still believe, that you can’t really understand much about the world if you don’t understand violence. Now I would extend this statement to fear. This is the kind of raw material that young scholars, not just Ta-Nehisi Coates, should be mining not scorning.

European fears of immigration, redux

The first time was tragedy, the current time is farce. A lawyer for the Parlement of Paris in the 1750s:

“The introduction of too many blacks into France, whether as slaves or in any other guise, is dangerous. We will soon see the French nation disfigured,” Poncet wrote, reacting to the case of a mulatto named Louis who had just been declared free and rewarded back wages. “The negroes are, in general, dangerous men. There is practically not one of those to whom one has given their liberty who has not abused it.”

Three hundred years later you could easily substitute Muslim for negro and this would not sound amiss.

From The Black Count, a Pulitzer Prize-winning biography of Alexandre Dumas’ father (of the same name): a mixed-race general during the French Revolution. More generally it’s an interesting and unusually well-written insight into the revolutionary era.

IPA’s weekly links

Guest post by Jeff Mosenkis of Innovations for Poverty Action.

via http://bloguin.com/

  • Bridge Academies, the low-cost private school franchise supported by Bill Gates,  Facebook founder Mark Zuckerberg, DFID, and others has been stopped from expanding by the Kenyan government, even as it has been growing in other countries.
  • Someone is making a version of the irreverent game Cards Against Humanity about aid workers, which in 3 days has already exceeded their Kickstarter goal (h/t Julia B.)
  • A new WHO/UNICEF report says Malaria rates have dropped by 60 percent since 2000, but another study finds rates higher near all the new dams built to provide power in sub-Saharan Africa.
  •  Previous research has found persistent “cultures of honor,” people developing reputations for being tough in places where law enforcement was historically weak. A paper finds current higher rates of violence in Canadian counties that were distant from early Mountie outposts in 1890-1920, and hockey players from those counties receiving more penalty time (PDF, via Marginal Revolution).
  • Cass Sunstein addresses two potential criticisms of President Obama’s new directive to use behavioral science to improve government programs. While behavioral tweaks often result in small (say 5-10%) improvements, that multiplies to a lot of people nationally. As for the idea that they’re manipulative, he says that they should always be in service of existing agreed upon goals (such as improving retirement savings) and agencies should be open and accountable about it, but we’re all better off when programs are designed to function well (h/t Jessica K.)

And, Greece has been having trouble convincing the EU it can boost economic output. Their case might not be helped by the new napping desk developed there:


(they might run into patent trouble due to prior work by one Costanza, G.)

Is this the most effective development program in history?

2062106029_f6dd1be751_oIt’s a business plan competition for $50,000, and I think it’s a contender.

In 2011 the Nigerian government handed out 60 million dollars to about 1200 entrepreneurs, and three years later there are hundreds more new companies, generating tons of profit, and employing about 7000 new people.

David McKenzie did the incredible study.

24,000 Nigerians applied, the government selected about 6,000 to get some training and advice to develop their plan, the plans were scored, and about 1,200 were funded. They got an average of $50,000 each. Fifty thousand US dollars! Who the hell thought this was a good idea?

All the highest scoring plans got funded automatically, but McKenzie worked with the government to randomize among the runners up.

The results are amazing. Looking just at the people who had no firm to begin with, 54% of the control group have a firm after three years, compared to 93% of those who got the grant. And these firms are bigger. Just 11% of the control group have a firm with at least 10 employees, compared to 34% of those who got the grant. They’re more profitable too.

If you are the President of a developing country, one of the great problems that will occupy your thoughts is: how to get more people jobs? How to grow domestic businesses? Even I, Mr. Cash, did not think big grants would be the answer.

These entrepreneurs are not the deserving poor, to be sure, but the employees are more likely to be. They made $143 a month, so they probably weren’t the poorest of society. But 7000 people earning $7 a day they might not have earned otherwise—that is something. And this ignores the multiplier: the expansion of suppliers, the people employed by the 7000 employees spending that money, the taxes collected by the state, and so on.

Two other things occur to me:

  1. What if, in 10 years, we learn that after all the struggle to build infrastructure and services and other stuff was bullshit, and ALL ALONG we should have just been funneling more cash to the middle and bottom. I do not believe the cashonistas should go so far, but today I wonder.
  2. I should start responding to all the emails I get from Nigerians promising me $50,000 in cash.

Prevent crime with… therapy

These guys know that stealing is bad; they know that drug dealing is bad, or at least that society considers it a bad thing. They know that drug using is considered bad. And so they don’t disagree on what the moral principles are in society. They just don’t necessarily believe that that’s their group. Like, why, that’s bad for you, but that’s not bad for guys like me. And so that was their image, that was their self-image. And so the goal was to actually get them to try thinking like mainstream society members.

That’s Freakonomics Radio covering my study of cognitive behavior therapy and crime in Liberia. Crimes drop up to 50%.

The previous week covered a similar program in Chicago, with similar success. Our study here (including a policy summary) and the Chicago study here.