Give Directly: Evidence and Poverty Alleviation

I first heard about GiveDirectly, a charity that simply gives money to people in extremely poor villages in Africa, on an episode of This American Life several months back. GiveDirectly has challenged other charities to show that their donors that are getting their bang for their buck. 

Here is a description of that story, cleverly titled “Money for Nothing and Your Cows for Free”:

Planet Money reporters David Kestenbaum and Jacob Goldstein went to Kenya to see the work of a charity called GiveDirectly in action. Instead of funding schools or wells or livestock, GiveDirectly has decided to just give money directly to the poor people who need it, and let them decide how to spend it. David and Jacob explain whether this method of charity works, and why some people think it’s a terrible idea. (28 minutes)  

 

More recently, the Freakonomics Radio Podcast discussed some of the data coming in on GiveDirectly as well as poverty alleviation more broadly.  

Here is a description of the Freakonomics show, entitled “Fighting Poverty With Actual Evidence”:

But one case study can’t definitively answer the larger question: what’s the best way to help poor people stop being poor? That’s the question we address in this new podcast. If features a discussion that Stephen Dubner recently moderated in New York City with Richard Thalerand Dean Karlan. Thaler is an economist at the University of Chicago, and a co-author of Nudge: Improving Decisions About Health, Wealth, and Happiness. (Both the British and U.S. governments now have “nudge” units, focused on using behavioral economics for policy improvements.) Karlan is a professor of economics at Yale and founder of the nonprofit Innovations for Poverty Action (IPA), which hosted the New York event. IPA, which Karlan founded, is trying to figure out how to best alleviate poverty. The answer, as you might expect, isn’t so simple. 

 

In some situations, giving money directly to poor people works well; in others, less so. IPA studied the efficacy of a cash-transfer experiment in Kenya run by the nonprofit GiveDirectly. For background, you might want to see how The Economist described the experiment, and also what NPR’s Planet Money had to say.