Foreign Aid

Improving the lives of the world’s, poor is not an easy task.

World Bank Challenged Are the Poor Really Helped

Wealthy nations and international organizations, including the World Bank, spend more than $55 billion annually to better the lot of the world’s 2.7 billion poor people Yet they have scant evidence that the myriad projects they finance have made any real difference. many economists say That important fact has left some critics of the World Bank, the largest financier of antipoverty programs in  developing countries. dissatisfied, and they have begun throwing down an essential challenge. It is not enough, they say. just to measure how many miles of roads are built. schools constructed or microcircuit loans provided: You must also measure whether those investments actually help poor people live longer, more prosperous lives It is a common-sense approach that is harder than it sounds. just like the question it’seeks to answer: Docs aid really work  A small band of development economists, who a year ago founded the Poverty Action Lab at the Massachusetts Institute of Technology, have become influential advocates for randomized evaluations as the best way to  that question. Such trials, generally regarded as the gold standard in social policy research, randomly assigning people eligible for an antipoverty program to get the help .or not, then comparing outcomes to see whether those who got the help fared better than those who did not It is the same approach that has helped drug companies figure out what medicines are effective and Americans decide how best to reform welfare. Advocates for rigorous evaluations hope to make’ aid more effective, not by directing money is particular countries, but by spending it on programs proven to work. The Poverty Action Lab scholars have made startling discoveries in their own randomized evaluations Adding an extra teacher to classrooms in rural India did not improve children’s test scores. But high school  graduates who were paid only $10 to $15 a month to give remedial tutoring to group or Lagos students in a Bombay slum markedly improved;reading and math skills A series of education experiments in Kenya found that providing poor students with free uniform~ or a simple porridge break fast substantially increased attendance, But giving them drugs to treat the intestinal worms that infect more than a quarter of the world’s population was more cost effective, with a price tag of only $3.50 for each extra year of schooling achieved. Healthier children are more likely to go to school. “You ban’t answer the general question Does aid work?” said Esther  economist and co-founder of the-Poverty Action ‘Lab our have to go project by project ‘and accumulate the dense into The World Bank, a lumbering giant that employs more than. 1,200 Ph.D.’s, is beginning to to critics like her This summer, it is organizing large-scale impact evaluations, including randomized trials, of programs to upgrade’ slums, improve the performance of schools- and keep-children healthy and m class. The programs will be tested in dozens of countries   cite bank’s chief economist, said he hoped this new effort would help the donors and developing countries “learn what does.and does not work Rigorous impact valuations should become part of the bank’s culture said That will require deep change. A recent in-house review of bank projects during the past four to five years found that only 2 percent had been properly evaluated for whether they made a difference, according to Mr. Bourguignon The World Bank spent more than a billion dollars without knowing why they were doing what they were doing that’s the tragedy said an M.LT. economics professor and co-founder of the Poverty Action Lab Mr. Pritchett, a veteran bank economist, tried to explain why rigorous evaluations were such a rarity in the culture of the bank. )ts highly trained.well-meaning professionals too often think they know the solutions. “They have too little doubt he said.