Waylaid Dialectic

July 4, 2013

The Little Push reconsidered

Filed under: Development Theory — terence @ 9:57 am

Chris Blattman is having second thoughts about the Little Push approach to tackling poverty.

By coincidence Horst Bleakly has an interesting new NBER paper looking at the impacts of an 1832 Georgian land lottery that randomly granted tracts of land to men. From the conclusion:

Using wealth measured in the 1850 Census manuscripts, we follow up on a sample of men eligible to win in the 1832 Cherokee Land Lottery. With these data, we can assess the effect of winning that lottery on the distribution of wealth almost two decades after the fact.
We show that winners are, on average, richer, but mainly because the middle of the distribution is thinner and the upper tail is fatter. In contrast, the lower tail is largely unaffected. This stands in contrast with a `mechanical’ short-run effect of the lottery, which would tend to compress the distribution of (log) wealth. The results are also inconsistent with the view that the e ffect of winning would have been greatest on the lower tail because credit constraints had created a wealth-based `poverty trap’. As we see in this episode, it may take more than just wealth to move the lower tail of the long-run wealth distribution “up from poverty.”
For whatever reason this large asset windfall, while helping the fortunes of the already reasonably well off, did little for the poorest. The next question, of course, would have to be ‘why?’

 

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