Child Sponsorship

A few years back I was surprised to discover that at least a couple of my old surfing buddies were sponsoring children in developing countries through child sponsorship programmes.

I didn’t have the heart to tell them but, within the development community, child sponsorship is – how shall we put it – rather uncool.

Uncool, because it’s a form of development assistance that is primarily driven by NGO marketing departments. It’s done, not because it’s thought to be the best possible way to tackle poverty, but rather because it’s one of the better available ways of prising open people’s wallets. As Stalin was supposed to have said ‘one death is a tragedy; 10,000 deaths is a statistic’. Similarly, in aid, when confronted by the chance to tangibly help one kid people are more likely to donate than if the plea for help is pitched to them in terms of funding lawyers to contest trade deals to shift GDP growth by 0.1%/annum.

However, just because something is uncool doesn’t mean it doesn’t work.

Via Lee (again, thanks!) one of the first ever impact evaluations of Child Sponsorship is available, as a PDF, for you to read.

The juicy bits:

Our estimates yield large and statistically significant effects of child sponsorship on a broad array of adult life outcomes. Using an estimation procedure that accounts for possible spillovers onto younger siblings (but not for the possibility of endogenous child selection), we find that child sponsorship results in, on average, 1.53 additional years of completed formal schooling for sponsored children (t = 11.08).3 Instrumental variable estimates that account for endogenous child selection show an impact on the sponsored child of 2.42 years (t = 6.41). Using a pure eligibility instrument that allows for spillover impacts onto non-sponsored children of eligible age in the same village, we obtain an estimated impact of 2.85 additional years of schooling per sponsored child (t = 7.40).

We find child sponsorship to be a “great equalizer” in the sense that the educational impact on sponsored children across the six countries is driven largely by counterfactuals. In the countries where existing (counterfactual) levels of formal schooling were low, we find larger impacts of the sponsorship program than we do in countries where existing levels of education were already high. In places where schooling was higher among boys, we find larger program impacts on girls. Where it was higher among girls, we find larger impacts on boys.

We also uncover impacts on many other adult life outcomes in the six countries that are both large and statistically significant. Our OLS and instrumental variable (IV) estimates indicate that child sponsorship resulted in a 19.6 (32.6) percentage point increase, respectively, in the probability of secondary school graduation, with significant spillovers onto younger siblings, a 7.1 (17.3) percentage point increase in the probability of white collar employment, a 7.3 (8.0) percentage point increase in the probability of sending remittances back to the family. Moreover, marriage by age 20 fell by 4.9 (11.5) percentage points and female childbearing by age 20 dropped by 3.3 (11.8) percentage points. We also find significant increases in the probabilities of living in a house with electricity, with indoor plumbing, and with an improved floor in adulthood, as well as an increased probability of owning a cell phone and almost a doubling of the probability of being a church, community or village leader.

Three things to note:

1. This may be a somewhat atypical child sponsorship programme in that quite a lot of the sponsorship does seem to be focused on individuals rather than communities which, despite what the adds suggest, are often – very sensibly – the focus of this sort of work.

2. These gains are statistically significant and significant in the real sense too (i.e. the magnitude of improvement’s is not to be sniffed at). However, they’re still not telling quite the same tale of inevitable transformation that Child Sponsorship organisations depict in their advertising.

3. The evaluation doesn’t answer perhaps the most important question about Child Sponsorship: is it better or worse than other NGO aid? In this study the counterfactual is no assistance, as opposed to a a good ongoing NGO project that wasn’t designed with marketing in mind.

However, to tie this post back to my surfing buddies, I don’t think that in their case the counter factual was ever going to be donating to an impeccably scoped and designed ideal NGO project. Almost certainly had their consciences not been tugged by the evocative adds they would have kept their credit cards in their wallets, and not donated to anything.

So, in that sense, you’d have to say that – uncool or not – on the basis of the best available evidence child sponsorships come out looking quite good.

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On the other hand…This is the second ever impact evaluation of a child sponsorship programme. Second. Ever. After all those years of people sponsoring kids. That’s appalling. What we really need now is an NGO that sponsors poor, orphan impact evaluations…

When you can do nothing, what can you do?

Reflecting on well-intended but poorly informed attempts to solve world poverty J. at Tales from the Hood writes:

We are messing around with people’s lives, here. Just because you won’t be slapped with a malpractice suit if you get it wrong (although I do actually believe that day is coming) doesn’t mean it’s okay to “just do something” in order to feel good. Very often, and especially if you don’t know what you’re doing, the very best thing to do is…

Nothing.

This is not a phrase that I expect to use more than twice over the next century but: J. is wrong.

If you’ve been moved by the plight of people suffering in Humanitarian disasters, or if the scale and scope of global poverty strikes you as profoundly wrong, and if you want to help, do not do nothing. Doing nothing is not ‘very often…the best thing to do’. Do something. It is almost always possible to help.

Of course, doing something isn’t the same as doing absolutely anything, or doing the first thing that comes into your mind. What follows are some rules of thumb (the best I can offer, at least) for doing something and for maximising the chance that what you do does more good than harm.

1. First and foremost: do not assume that the only reason that global poverty hasn’t been solved is simply because you personally haven’t had time to think about it yet. Decades work of work and effort have gone into understanding the problems of global development. And it turns out they are complex. Unlike the woman whose blog J. links to in his post, your first fact finding mission should not be to India or Africa: it should be to the library.

2. Then, accept you are on a learning journey (welcome aboard). Be humble (here’s looking at you Mr Starr). And keep trying to learn.

3. Also, accept the fact that the best contribution you can make in many circumstances will often be unsexy, imperfect, and inconvenient: i.e. a cash donation to a large, credible international NGO (i.e. Save the Children, Oxfam, UNICEF (who probably function as an NGO where you live), World Vision, etc). None of these organisations is perfect: they are human endeavours after all. But they are generally pretty good. Sometimes they will make mistakes, and sometimes you will read about their mistakes in the paper, but they will almost certainly be making fewer mistakes than you will if you try and set up your own NGO.

Giving money isn’t much fun either, but money is almost always the most useful thing you can give. It is much better than stuff you have in your garage but no longer want (the seminal post on this being one of J.’s). And usually much more cost efficient than you going to help personally (although this isn’t always the case in the case of particular specialist skill sets, and see point 5 below).

4. Small is ok. Something is better than nothing. Buying a cup of Fair Trade coffee is not going to save the world. But on the other hand buying it is still likely to help someone — going to make a small contribution to the life of a poor farmer, somewhere. Small things are worth doing. Similarly, when confronted by the magnitude and complexity of the problems of the world, it can be very tempting to despair but, once again, something is better than nothing. Don’t do nohing just because you can’t do everything.

And,

5. Be aware that much of the most important work you can do to help tackle global poverty won’t be about them it will be about us. The foreign policy related decisions made by our (rich country governments) can have dramatic impacts on the lives of poor people in developing countries. For example, climate change: if we don’t limit our CO2 emissions it is very likely that the world’s poorest people will suffer. For example, the global weapons trade: we sell the guns, they suffer the consequences. For example, migration: letting people into wealthy countries is one of the easiest ways of helping them escape poverty; letting refugees into wealthy countries is one of the best ways of helping them escape strife (here’s looking at you Australia!). And so on…

In tackling problems in all of these areas you have one huge comparative advantage: you vote in the countries where the decisions are made. Only one vote and only one voice amongst many, true. And domestic political economy can mean that the polluters, and arms dealers, and business lobbies have a much greater voice than you. But, nevertheless, there’s still more chance that your senator or MP is going to listen to you than to someone on a small atoll in the Pacific somewhere whose sole source of fresh water is being contaminated by rising sea-levels.

Do something, but take care in what you do.

And Still More Links…

“The Internet? Is that thing still around?” – Homer Simpson

The links just keep piling up…

A good article on CCTs in Latin America from the NY Times (in January). It always struck me that one of the strengths Bolsa Familia and Progresa is that they evolved organically and so ended up being particularly well suited to the contexts they ran in (i.e. states that we capable enough to give out money, but not so capable that they could effectively undertake more complex social tasks without significant issues). If you’re Sweden, provide social services; if you’re Mexico give out money. Which raises an important question in a time when CCTs are flavour of the month: how well will they transfer? Particularly to places where state capacity is very very low (say Papua New Guinea). Places where the state might even struggle to give out cash reliably. And where health services and the like are often wholly absent absent, meaning that money alone won’t help in these areas. I’m not saying CCTs couldn’t work in these contexts, just that we shouldn’t assume they will.

Dani Rodrik on Globalisation at Project Syndicate.

Owen on why we should give aid. Interestingly, most politicians feel the need to justify aid in terms of enlightened self interest, but when they’re surveyed the public in most developed countries are usually happy giving aid for solely moral reasons.

Paul Krugman on affirmative action for conservatives.

And Krugman again explaining why he doesn’t think speculators are to blame for the current food price spikes (one, two). Demand, according to Krugman, is exceeding supply primarily for natural reasons.

Which is a handy segue to this great John Quiggin piece on whether the  Earth will be able to feed its people in a world where there are quite a few more of us. Short answer: yes, if we make the right choices.

 

Counting the Poor so that the Poor Count

Over at the Guardian’s Development Blog Andrew Chambers has an interesting post taking a tilt at the poverty measures associated with MDG 1.

Given that someone’s raised poverty measurement and the MDGs, and seeing as I’m possibly the last person on Earth who actually likes the Goals, I can’t resist the opportunity to clear up a few common misconceptions about poverty measurement and the MDGs. (To be clear, not all of these are in Mr Chambers’ post).

First, to get the MDGs off the hook, it’s worth noting the oft-forgotten point made in a footnote under the official list of MDG indicators: “For monitoring country poverty trends, indicators based on national poverty lines should be used, where available.” So, when we talk about poverty and the MDGs in Middle Income Countries, we’re already meant to be referring to national poverty lines which, ought, one would hope, be higher in those countries than US$1/day PPP.

Second, World Bank global poverty figures, from which the MDG indicator was derived, are quantified in purchasing power parity dollars. Which means that comparisons like — “However, by sifting through rubbish bins she is able to collect enough recyclable material to make more than 200 baht (£4) a day” — aren’t really correct.

When the World Bank talks about a poverty line of $2.50 a day (to use the line most commonly referred to by the Bank these days), what they mean is: living off less each day than you could have purchased with $2.50 in the United States in 2005. Think about it for a moment. Could you live off $2.50 a day in the US? It’s an incredibly low figure. Ludicrously low.

It is also — to make my third point — a more or less arbitrary line, simply calculated by averaging the poverty lines of those developing countries that have poverty lines. It doesn’t bear any direct relation to nutritional or health requirements. On the other hand, given that about half the World’s population live under that line (and many millions of people still live under the $1 a day line), such measures are still useful. They’re still quite good ways of quantifying the amount of acute material deprivation in the World. The mistake people make, I think, is to assume that once someone’s over that $2.50 a day bump they’re out of poverty. As Chambers’ post illustrates, this isn’t the case. In terms of an improvement Lant Pritchett makes a convincing case for a spectrum of poverty lines. With poverty persisting until at least $10 a day. This is a much better way to think about poverty — something that people move out in increments; not something they depart in one big hop.

Fourth, where possible (in about 2/3rds of their data), the World Bank use consumption data in their poverty figures. Which means that those global poverty numbers you hear already take into account what people ‘earn’ outside the cash economy.

Fifth, where possible, the World Bank uses data in their global poverty figures. Where it’s not possible they impute the numbers. Also, poverty data, even thought it might seem otherwise, is not super reliable, with final figures dependent on all manner of collection issues and calculations. Some people argue that global poverty figures ought to be much higher than those the World Bank produces, other that they ought to be much lower.

So what does all this mean at the end of the day? Basically, that the art of poverty measurement is very much an art. Final figures hinge on methodological and philosophical choices (more on this in my next post). But even given these uncertainties, once you understand the basics, one point becomes inescapable: a tragically high portion of our planet’s population live off remarkably little. So little that, as crazy as it may seem, a $1/day PPP purchasing power parity poverty line remains a relevant, albeit insufficient, measure for quantifying global poverty.

 

End of the Golden Weather?

The last decade may have been the best ever for human development. But that doesn’t mean the next will inevitably be better still. There are lots of reasons why current trends may reverse (The Crazy Party winning the next election in the US, resurgent conflict, a new cold war…) but the most likely one is simply that we may well be running into the environmental constraints imposed by our planet.

In the Guardian:

Soaring prices of sugar, grain and oilseed drove world food prices to a record in December, surpassing the levels of 2008 when the cost of food sparked riots around the world, and prompting warnings of prices being in “danger territory”.

An index compiled monthly by the United Nations surpassed its previous monthly high – June 2008 – in December to reach the highest level since records began in 1990. Published by the Rome-based Food and Agriculture Organisation (FAO), the index tracks the prices of a basket of cereals, oilseeds, dairy, meat and sugar, and has risen for six consecutive months.

Over the last few decades economic development has served as a remarkable tail wind — making poverty reduction and human development that much easier. GDP growth doesn’t invariably lead to poverty reduction or improved human development outcomes but in most circumstances it certainly helps. The trouble is that as countries’ gross domestic products have been growing so have their ecological footprints. We’ve become slightly more efficient at turning resources into welfare but not so much so that we’ve managed to decouple economic development from environmental degradation.

And now, the (factory farmed, petroleum intensive) chickens may be coming home to roost.

How much of a challenge might this pose? Paul Krugman is relatively sanguine about the medium term difficulties:

So what are the implications of the recent rise in commodity prices? It is, as I said, a sign that we’re living in a finite world, one in which resource constraints are becoming increasingly binding. This won’t bring an end to economic growth, let alone a descent into Mad Max-style collapse. It will require that we gradually change the way we live, adapting our economy and our lifestyles to the reality of more expensive resources.

Perennial pessimist that I am, I’m not so sure. With appropriate legislation and and incentive generating taxation in place we could almost certainly marry rising wealth with a finite planet (at least for quite some time yet). But what are the odds we’ll actually get there? As opposed to lapsing into chaos and conflict instead? Looking at the trouble we’re having to do something relatively easy, like impose a global price on carbon, and given that global cooperation really is needed to tackle modern environmental issues, I’m not at all confident we’ll get there. Or that the worst consequences of our inaction won’t be felt by the globe’s poorest in coming years.

I may be wrong — I hope I’m wrong — but at present I find it incredibly hard to be bullish about the prospects for development in coming years…

Baring one’s bottom (billion)

I haven’t listened to it yet (I’m saving it for Tuesday’s trip home, or driving over the Wairarapa somewhere) but Owen Barder’s got a new Development Drums up (the series consistently keeps churning the best available development podcasts – it’s a must follow). This time they’ve got Andy Sumner on discussing his New Bottom Billion thesis (this paper). Which reminds me, also worth listening to is the IDS podcast of the debate between Sumner and Paul Collier.

Collier doesn’t exactly come across as gracious, and the debate is made more complicated than it needs to be by discussions of discounting (which, when we’re talking about inter-generational issues, are something best left to political philosophers not economists), nevertheless  the argument is informative.

Sumner argues that the majority of the world’s extremely poor don’t actually live in the world’s least developed (and slowest developing) countries, rather they’re to be found in parts of the world such as China and India. Which is hardly surprising given their size. From this he concludes that development thought and work shouldn’t just focus on the LDCs, and that we need to remember that poverty is also a distributional issue as well as a developmental one.

For Collier this is poppycock. He argues we needn’t concern ourselves with the poor in states such as India and China because the rapid growth of these countries means that extreme poverty will be eliminated within a generation or two by force of their development trajectories alone.  To Collier the focus needs to be firmly on countries where development has stalled, or gone backwards, for significant periods of time. This is where the real development need is. Because if something doesn’t change in these countries, extreme poverty will continue for the foreseeable future.

If one was so inclined, one could, I think, quibble with Collier on three points. First, his argument is predicated on China and India’s (and Indonesia, and etc’s ) development trajectories of today continuing into the future. This seems likely but not guaranteed. Second, it aggregates to the state level, which may be mistaken: I think it’s plausible to argue that somewhere like Bihar, while being set amongst growing India, has most of the problems to be found in Collier’s Bottom Billion states. Third, it’s possibly too pessimistic about the countries of the Bottom Billion (see for example: Africa’s Turn?)

Still, I think case is fairly persuasive. Although, importantly, if we limit our thinking for the time being to aid, it doesn’t necessarily follow from Collier’s argument that aid should flow to the Bottom Billion countries instead of, for example, places like India. This would only be the case if we were certain that aid could actually help spark development. And this is still far from clear. A far safer conclusion about aid is that, given well, it can improve people’s welfare — provide them with health care, and education and the like. Even if it can’t transform countries or dramatically alter their growth trajectories this is still a worthwhile outcome. And if this is the case, then really where you focus aid doesn’t depend on Bottom Billion arguments at all. Instead it depends on need (where people are, today, most poor) and efficacy (where it’s likely to work). This might be in Bihar or Bogota or Burkina Faso, or where ever. The point is Bottom Billion Debates won’t help us figure out where. Which isn’t to dismiss them — they are important for issues other than aid. But in aid’s case we’re far better not to let ourselves be guided by global arguments du jour but rather by careful assessment of context and the possible.

Links – nerd war!

Friday links and we start with a nerd war – at Duncan Green’s blog Martin Ravallion and Sabina Alkire debate the merits of the new multi-dimensional poverty index. The digested debate: Ravallion’s key point is that the index, like the Human Development and Human Poverty Index before it, is conceptually flawed because it tries to ‘manually’ aggregate different features of poverty into a single number and, in doing so, hinges on value-judgments about how to weight respective elements of human development. Alkire’s key points: World Bank poverty measures miss much of what matters in life – state provision of public goods and services for example. And, when disaggregated, her index provides key information about the constituent components of poverty, potentially allowing targeted programmes. They’re both right. And lucky for us it’s not an either/or – we can draw on both measures of poverty. Which I will in the future – the MPI is a good new initiative.

Sticking with nerd-wars (by the way, I’m not using nerd pejoratively here – I’m one of them) enjoy this – an excellent debate between a Utilitarian and a proponent of Natural Law philosophy (hint you can download an MP3 podcast of the talk from the MP3 button under the TV ‘screen’). I can see the appeal of Natural Law – particularly in the belief that various aspects of human flourishing (love, friendship, health) should be valued for what they are, rather than for what they contribute to aggregate happiness or welfare (the Utilitarian position); but if you really accept that these things are incommensurate (as the Natural Law proponent does), and if you really believe their value is not instrumental to something else, how do you mediate in situations where trade-offs need to be made. I remain a Utilitarian (albeit a conflicted one).

Which may explain why, when I do let my hair down, I tend to dance like this guy (h/t Duncan Green). But hey, as the video shows, that doesn’t mean us nerd-dancers can’t be leaders. Although apparently it all hinges on the first follower…

On to aid, the Economist and ODI both have interesting features on Brazil’s nascent aid programme. As with all donors, there’s an element of international diplomacy which at least part motivates their giving, so any Brazilians out there might want to read Laura Freschi’s excellent post at Aidwatch summing up recent studies on whether giving aid helps win hearts and minds in aid recipient countries. It’s worth noting that the studies Freschi reports on are mostly special cases (US aid to Pakistan for example, and aid in Afghanistan – in both cases positive impacts may well be offset by negative perceptions of military actions, I think).

Meanwhile, on the home front George Monbiot riles against the lunacy of those who oppose speed cameras. Hear, hear.

And finally, Paul Krugman offers a handy explanation of the perils of deflation.

Nicholas Kristof will always be with us

In the NY Times Nicholas Kristof points out the obvious (that poor people make bad decisions like everyone else), appears to confuse cause and effect, and skirts close to the cretinous (implying that bad decisions explain global poverty). In doing so he arouses the ire of at least two blogs and elicits a thoughtful contribution from William Easterly.

I’m too hungover to think clearly at present (poker with the lads last night)* but I just want to point out that this story is as gendered as everything else in development.

Kristof:

Because there’s mounting evidence that mothers are more likely than fathers to spend money educating their kids, one solution is to give women more control over purse strings and more legal title to assets. Some aid groups and U.N. agencies are working on that.

*This is a lie. My health prevents me from drinking. But I certainly did plenty of it in the past without suffering poverty as a result. The reason for that? I’m well educated, live in a developed country and come from a relatively well-off family.