Saturday, August 12, 2006

Making aid work


Abhijit Banerjee starts the debate on international aid to poor countries and how to make it work, that leads to quite a few responses. The following excerpt is the central point in Banerjee's article:

Randomized trials ... —- that is, trials in which the intervention is assigned randomly -— are the simplest and best way of assessing the impact of a program. They mimic the procedures used in trials of new drugs, which is one situation in which, for obvious reasons, a lot of care has gone into making sure that only the interventions that really work get approved, though of course not with complete success. In many ways social programs are very much like drugs: they have the potential to transform the life prospects of people. It seems appropriate that they should be held to the same high standards.

Tyler Cowen's NYTimes column (which I linked to yesterday) describes a study (by a team that includes Abhijit Banerjee) that uses randomized trials in the area of microfinance in Andhra Pradesh.

5 Comments:

  1. Hiren said...

    Hope the microfinance extends to poor farmers who are commiting suicide.

  2. Tabula Rasa said...

    as an interested neutral observer, i think it's incredible how much passion abhijit banerjee and his associates arouse amongst indians who work in related areas -- both for and against! (i personally think that this statement you have chosen to highlight is praiseworthy from a social as well as a philosophy-of-science perspective. but that's just me, the experimentalist.)

  3. Abi said...

    TR: I agree with Banerjee that aid ought to go to those projects that are known to work. On the other hand, the respondents point to situations that are not amenable to this sort of randomized trials. This series of articles was just a great eye-opener for me. Lots of thoughtful people trying to figure out the best way to help people ...

    Since I am a complete outsider, I am not sure what you mean when you imply that Banerjee arouses much passion among Indians working in similar areas -- both for and against. Links, please ...

  4. Tabula Rasa said...

    Sorry, no links. I've gotten this impression from conversations I've had with people associated with this field. On my recent trip to India, this topic came up thrice, on different occasions with different groups. Each time, at least one person exploded with rage during the conversation. There is something about this group that rubs "field-level" workers the wrong way. I don't know what it is, but I suspect it's more an emotional reaction than based on any rigorous reading or criticism of their work. (For instance some people can't stand the name "Poverty Lab" -- regardless of what it may actually mean.)

  5. Jillu Madrasi said...

    I totally have to agree with Tabula Rosa on that one.

    I don't know if the folks at MIT-India noticed my face blanch when they told me of this lab. They wanted me to write about it -- the lab also has some sort of a center in Chennai now.

    You could say it is just semantics, but like Obama (and Dewal P) tell us words mean something...