Aid burst lifts people out of extreme poverty

Giving some of the world’s poorest people a two-year aid package—including cash, food, health-care services, skills training and advice—improves their livelihoods for at least a year after the support is cut off, according to the results of an experiment involving more than 10,000 households in six countries.

“We finally have truly credible evidence that a program for the poorest of the poor can really help them meaningfully reduce their poverty,” says Dean Karlan, an economist at Yale University in New Haven, Connecticut, and a co-author of the study, reported today in Science.

Outside experts are more cautious, but still impressed, particularly because the work was done as a randomized control trial—in which people were randomly assigned to either an intervention or a control group. Most poverty interventions have failed to show sustainable benefits in such trials, so the effectiveness of the program justifies countries considering the strategy, says Jonathan Morduch of New York University, who studies microfinance and poverty.

The idea of assessing poverty inventions in randomized control trials, in the same way as drugs and vaccines are tested, was developed over the past decade by the Abdul Latif Jameel Poverty Action Lab (J-PAL), at the Massachusetts Institute of Technology in Cambridge (see ‘International aid projects come under the microscope’), and by Innovations for Poverty Action, a non-profit organization founded by Karlan that coordinated the latest study.

“Effects often fade over time, so seeing results persist for a year is already quite impressive,” says Morduch. It shows that a coordinated short-term intervention can put very poor people on the first rung of the ladder of escape from extreme poverty.

[Scientific American]

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