229 looked as if they had been hurled into a wall. From the footnote on p. 11 of “Putting a Band-Aid on a Corpse,” cited previously.
232 use of the public clinics. Paul Gertler. 2004. “Do Conditional Cash Transfers Improve Child Health? Evidence from Progresa’s Control Randomized Experiment.” American Economic Review 94(2):336–341.
233 Paul’s study of it. Paul Gertler and Simone Boyce. 2001. “An Experiment in Incentive-Based Welfare: The Impact of Progresa on Health in Mexico.” Working Paper.
234 A separate study. John Hoddinott, and Emmanuel Skoufias. October 2004. “The Impact of Progresa on Food Consumption.” Economic Development and Cultural Change 53(1):37–61.
235 are being rigorously evaluated. Laura Rawlings. 2005. “Evaluating the Impact of Conditional Cash Transfer Programs.” The World Bank Research Observer 20(1):29–55.
236 and test it with an RCT. Xavier Giné, Dean Karlan, and Jonathan Zinman. 2010. “Put Your Money Where Your Butt Is: A Commitment Savings Account for Smoking Cessation.” American Economic Journal: Applied Economics 2(4):1–26.
244 malaria worldwide in 2007 alone. This figure is from a press release about the president and CEO of PSI, Karl Hofmann. http://mim.globalhealthstrategies.com/blog/wp-content/uploads/2009/10/Karl-Bio.pdf (accessed 4/26/10).
245 who worked together on an RCT. Jessica Cohen and Pascaline Dupas. 2010. “Free Distribution or Cost-Sharing? Evidence from a Randomized Malaria Prevention Experiment.” Quarterly Journal of Economics 125(1):1–45.
246 each year worldwide. From the World Health Organization Web site’s fact sheet on water, sanitation, and hygiene: http://www.who.int/water_sanitation_health/publications/factsfigures04/en (accessed 3/28/10).
248 stacked up against one another. Michael Kremer, Edward Miguel, Sendhil Mullainathan, Claire Null, and Alix Peterson Zwane. 2009. “Making Water Safe: Price, Persuasion, Peers, Promoters, or Product Design?”
Chapter 11
254 went to Mexico City. Paul Gertler, Manisha Shah, and Stefano Bertozzi. 2005. “Sex Sells, but Risky Sex Sells for More.” Journal of Political Economy, 113:518–550.
256 that’s the truth.” This and many other disheartening quotes from “Dr. Beetroot” can be found at http://www.southafrica.to/people/Quotes/Manto/MantoTshabalalaMsimang.htm (accessed 3/15/10).
259 near Busia in 2004. Pascaline Dupas. 2007. “Relative Risks and the Market for Sex: Teenage Pregnancy, HIV, and Partner Selection in Kenya.” Mimeo, Dartmouth.
263 “Use Condoms.” Available on YouTube: http://www.youtube.com/watch?v=0ed1m16L1so.
264 to buy condoms. Rebecca L. Thornton. 2008. “The Demand for, and Impact of, Learning HIV Status.” American Economic Review 98(5):1829–1863.
264 0.6 percent in the United States). The UNICEF Web site has a wealth of economic, demographic, epidemiological, and other statistics for hundreds of countries. These were found at http://www.unicef.org/infobycountry/malawi_statistics.html#66 (accessed 6/22/10) and http://www.unicef.org/infobycountry/usa_statistics.html#66 (accessed 6/22/10), respectively.
265 worth ten times as much. In Thornton’s paper, see the discussion on p. 14 and Table 4 on p. 51.
ACKNOWLEDGMENTS
Dean’s Acknowledgements
I found writing the acknowledgments very challenging. How do you really express how grateful you are, without sounding soppy or saccharine? I am grateful to many, to those who have worked with me, advised me, worked for me, and those who had nothing to do with me but produced great work that we can write about here.
Professionally, I thank my advisers for life, Esther Duflo and Abhijit Banerjee. Their leadership on the founding board of Innovations for Poverty Action and in creating the Jameel Poverty Action Lab has changed the world for the better, and I’m forever proud to be their advisee. Sendhil Mullainathan was both my adviser and now coauthor, and one of the most fun and creative people around. His influence on this book, and me, is throughout. I thank Richard Thaler, for introducing me to behavioral economics when getting my MBA, taking me on as an advisee from afar when I continued on for my Ph.D., and last but not least, providing so much of the motivation behind the work here. I thank Michael Kremer for advising me in my early days of graduate school, including one particularly memorable (for me) coffee when I was first thinking about running experiments to tackle empirical challenges, and for his leadership in starting up randomized trials in the pre-IPA and pre-JPAL days. I thank Jonathan Morduch, for guiding me and teaching me so much about the economics and politics of microfinance. And lastly, only chronologically, I thank Chris Udry. Esther told me one day in graduate school to get on a train and go visit Chris for a few hours in New Haven, and Chris was gracious enough to meet me even though I wasn’t a student at Yale. Hard to say of course (I have no control group “me” who didn’t get on the train!), but I think that train ride made a huge impact on my life. A great example of Esther’s stellar life-changing advice. Thank you, Esther (and Chris) .
Jonathan Zinman is a unique force in my life, both as a brother and my most common collaborator. It is trite but true to say that the research here that I have done with him would not have been done, or would not have been done as well, were it not for him. Although less frequent in my collaboration, I am grateful to my other collaborators in development projects talked about in this book: Nava Ashraf, Marianne Bertrand, Miriam Bruhn, Xavier Giné, Maggie McConnell, Jonathan Morduch, Antoinette Schoar, Eldar Shafir, Martín Valdivia, and Wesley Yin.
I cannot thank enough the team at Innovations for Poverty Action and the Jameel Poverty Action Lab. The current leadership team at IPA—Annie Duflo, Kathleen Viery, and Delia Welsh—helps me sleep a few hours each night, and helps IPA grow twofold year-in and year-out. Our staff on the ground are some of the hardest working, most dedicated, and smartest individuals. They come at this with different motivations and paths, and it is always an absolute pleasure and thrill to work with each of them. Without them none of this would be possible. Wendy Lewis has provided me and IPA the support these past few years to keep it all straight and orderly—thank you.
This leads me to the next group: the academics. I am just one of many on this quest. I thank the field researchers whose work I discuss in this book for generating the knowledge I’m able to discuss here: Abhijit Banerjee, Stefano Bertozzi, Suresh de Mel, Esther Duflo, Pascaline Dupas, Paul Gertler, Xavier Giné, Rachel Glennerster, Robert Jensen, Cynthia Kinnan, Michael Kremer, David McKenzie, Edward Miguel, Clair Null, Jonathan Robinson, Emmanuel Saez, Manisha Shah, Rebecca Thornton, Chris Woodruff, Dean Yang, Alix Zwane.
I thank the people who have been on the board of Innovations for Poverty Action: my advisers Esther, Abhijit, and Sendhil, and Ray Fisman, for agreeing to be on the board when their crazy fresh-out-of-graduate school advisee thought creating such an organization would be a good idea (rather than the more sensible focus-on-your-research-only strategy of an untenured professor). And I thank the current board—Greg Fischer, Jerry McConnell, Paras Mehta, Jodi Nelson, J. J. Prescott, Steve Toben, and Kentaro Toyama for carrying the torch and providing the leadership and guidance IPA needs to take us to the next level—as well as three former board members, Wendy Abt, Ruth Levine, and Alix Zwane, for being on the board during our critical growth over the past few years.
The organizations we have worked with deserve particular recognition. Although some of the research here is not testing the core mission of an organization, some of it is. There is nothing more impressive than someone so dedicated to poverty that they are willing to put their beliefs and hopes aside and ask for the evidence, even if it goes against what they have been saying they think should be done. More donors should reward failure. The organizations behind the work reported in this book are all exemplary groups willing to put it all out there in their strive for improvement. For my research projects discussed in this book, I’ve had the pleasure of working with Omar Andaya, Gerald Andaya, Jonathan Campaigne, Chris Dunford, Bobbi Gray, Mandred Kuhn, Iris Lanao,
Reggie Ocampo, and John Owens. I thank them for their dedication to learning what works.
My favorite times in the field are when my family joins me. It is a true blessing to not have to choose between work and family. Although I like to think my family has gotten a lot out of the experience (they say they have!), I know I’m clearly the one who benefits the most. I get to do my work without having to sacrifice one tiny bit. But this wouldn’t be possible if Cindy weren’t so flexible and supportive, and our kids weren’t such great travelers: able to have fun anywhere, ride on long rickety drives through Ghana, sleep in bedbug-ridden cots in rural Mali, and learn to eat just about anything (enjoying the good food and merely laughing about the bad).
I recently read the acknowledgments in my dissertation and was struck by my closing thanks, and how something so true then could be even more true now. So I repeat them word for word (except now with Gabi added, as she was not born until after graduate school): “Most of all, I thank my family: my wife, Cindy, my son, Maxwell, my daughter Maya and one daughter to be named soon [Gabi]. Having Cindy and Max and Maya [and Gabi] with me on my research travels made all the difference for getting these projects done. I would not be a development economist if it were not for Cindy’s support, flexibility, and enthusiasm. . . . This [book] is dedicated to my wife, best friend and love of my life, Cindy, and to Maxwell and Maya [and Gabi].”
Jake’s Acknowledgements
Traveling to the field to visit project sites throughout 2009 was a thrill and an adventure and an absolute hoot, and would have been impossible were it not for the help, hospitality, enthusiasm, and heroics of dozens of people.
First and foremost there are the men and women who shared their time and their experiences with me—including, but not limited to, the people whose stories were featured throughout the book. Almost without exception, these were folks who, unsolicited and with no promise of compensation, dropped whatever they were doing to welcome a complete stranger and make him feel at home. I am grateful for their kindness and was humbled by their generosity more times than I can count. Thank you.
I would never have met those extraordinary people, though, had it not been for the efforts of researchers and partner organization staff, who hosted, guided, translated, planned, recommended, coordinated, and generally went above and beyond in service of this project. In India, thanks to Justin Oliver and Joy Miller, the entire CMF team, Selvan Kumar, Nilesh Fernando, Abhay Agarwal, Sree Mathy, Jyothi, and Srikumar Ramakrishnan. In Peru, thanks to Tania Alfonso, David Bullon-Patton, Wilbert Alex Yanqui Arizabal, Silvia Robles, and Kartik Akileswaran. In Bolivia, thanks to Doug Parkerson, Martin Rotemberg, Maria Esther, and Chris from Minuteman Pizza in Uyuni. In Uganda, thanks to Pia Raffler, Sarah Kabay, Becca Furst-Nichols, and William Bamusute. In Kenya, thanks to Karen Levy, Andrew Fischer Lees, Jeff Berens, Owen Ozier, Jinu Koola, Blastus Bwire, Leonard Bukeke, Grace Makana, Moses Baraza, and Adina Rom. In Malawi, thanks to Niall Keheler, Jessica Goldberg, Lutamyo Mwamlina, Cuthbert Mambo, and Mr. Phiri of MRFC. In the Philippines, thanks to Rebecca Hughes, Megan McGuire, Nancy Hite, Yaying Yu, Ann Mayuga, Mario Portugal, Primo Obsequio, Alex Bartik, and Adam Zucker. In Colombia, thanks to Angela Garcia Vargas.
Thanks to the indomitable Wendy Lewis and everyone at IPA, both in New Haven and abroad, for invaluable support throughout.
Thanks to everybody who read and commented on drafts, who brainstormed, and who helped talk through ideas. Thanks especially to Laura Fillmore for valuable discussions at every stage of the process. Thanks to Helen Markinson for all the encouragement. Thanks to Chelsea DuBois for supplying the opening story and much, much more besides.
Finally, infinite thanks to Mom, Dad, Naomi, and Julie, who are without a doubt the best people I know.
Dean and Jake’s Collective Acknowledgements
We thank our agent, Jim Levine, who swore when we signed with him that he wasn’t a sign-and-leave kind of agent. Trust him we did, and he came through, working with us on the manuscript (and title—that was hard!) all the way to the end. We thank Jim’s team at Levine Greenberg for all of their work along the way, including Elizabeth Fisher, Sasha Raskin, and Kerry Sparks. We thank our editor, Stephen Morrow at Dutton, Penguin Books, for his valuable insights and edits and guidance throughout, and patience as we rejected title after title after title. We thank Andrew Wright for valuable input, both substantive and stylistic.
We are grateful to many for reading draft (and often draft after draft) of the manuscript, including David Appel, Julie Appel, Naomi Appel, Scott Bernstein, Kelly Bidwell, Laura Fellman, Erica Field, Laura Fillmore, Sally Fillmore, Alissa Fishbane, Nathanael Goldberg, Cindy Karlan, Karen Levy, David McKenzie, Ted Miguel, Cleo O’Brien-Udry, Tim Ogden Rohini Pande, Jonathan Robinson, Richard Thaler, Rebecca Thornton, and Chris Udry.
INDEX
Abdul Latif Jameel Poverty Action Lab (J-PAL)
absenteeism
accounting training
administrative costs
advertising. See also marketing
advocacy groups
agriculture. See farming
altruism
American South
Andaya, Omar
Andhra Pradesh, India
anemia
Arariwa
The Art of Choosing (Iyengar)
Ashraf, Nava
ATMs
attendance rates
availability bias
Babcock, Linda
balsakhi program
Banerjee, Abhijit
Bangladesh
Ban Ki-moon
banking systems
bare-bones loans
Barrera-Osorio, Felipe
Becker, Gary
bed nets
“before-after” evaluations
behavioral economics
and choice aversion
described
and difficulty of saving
and evaluation of lending programs
and farming practices
and foundations of development
harnessing behavioral shortcomings
and incentives plans
and marketing
and opportunity cost
recency and availability bias
and social learning
and solicitation of donations
and water sanitation
Benartzi, Shlomo
Bertozzi, Stefano
Bertrand, Marianne
Bill & Melinda Gates Foundation
Bleakley, Hoyt
Bobonis, Gustavo
Bogotá, Colombia
Bolivia
Bono
Bruhn, Miriam
Buddhist monks
Burns, Robert
Busia, Kenya
business training programs
Butuan, Philippines
California Raisins
Camerer, Colin
career choices
Cebu
celebrity activists
cell phones
Center for Global Development
Challenger space shuttle disaster
charities
Charway, Davis P.
Chennai, India
Children’s Investment Fund Foundation
Chile
Chittagong University
chlorine dispensers
choice
Christmas Clubs
classical economics
and bed net prices
and HIV/AIDS prevention
and microlending
and rationality
and retirement savings
shortcomings of
and the Trust Game
See also market-based solutions
Clegg, Gary
Cohen, Jessica
Cole, Shawn
collateral
college education. See also education
Collins, Daryl
Colombia
commitment savings plans
Committed Action to Reduce and End Smoking (CARES)
communication technology
community assistance. See also Foundation for International Community Assistance (FINCA)
community development
Community Leaders
Compartamos
conditional cash transfers
condoms
Conley, Timothy
consumption patterns
control groups
convenience stores
cooperation. See also group lending
Credit Indemnity
credit reporting
creditworthiness
crop rotation
cultural issues
daily loans
daily targeting theory
debt. See also microcredit and microfinance
defaulted loans
Delhi, India
delinquent loans
De Mel, Suresh
demographics
developing countries
and credit reporting
and deworming programs
farming in
and malaria prevention
and savings rates
See also specific countries
Development Innovations
deworming programs
diarrheal diseases
discipline
Drexler, Alejandro
DrumNet
collapse of
and fertilizer coupon programs
and kitchen sink approach to development
Duflo, Annie
Duflo, Esther
and community development
and Development Innovations
and fertilizer use study
and genius grants
and health worker absenteeism
and Millennium Development Goals
and remedial instruction
and retirement savings plans
and teacher absenteeism