The Hindu Business Line : Scientific approach to fighting poverty

It’s not just that we do not know enough about the outcomes of anti-poverty schemes. It’s also that lack of knowledge could make us pick or choose the wrong schemes.

— PROF. ESTHER DUFLO, ABDUL LATIF JAMEEL PROFESSOR OF POVERTY ALLEVIATION, MIT, US

B. Baskar

Prof Esther Duflo, Abdul Latif Jameel Professor of Poverty Alleviation and Development Economics at the Massachusetts Institute of Technology, US, is one of the leading development economists in the world today.

She co-founded the Poverty Action Lab at the MIT in 2003, which pioneered the concept of randomised evaluation of development projects. She has done research in health, education, gender and politics, and provision of credit to the poor. Apart from having published in the leading journals of economics, Prof Duflo also writes a column in the French daily Liberation.

Prof Duflo, in Chennai recently to conduct a training programme on the evaluation of development projects at the Institute for Financial Management and Research (IFMR), took some time off to speak to Business Line.

Excerpts from the interview:

Could you tell us about the Poverty Action Lab you co-founded at MIT a few years ago? About its aims, objectives and how different its work is from earlier efforts at development research?

The objective of the Lab is to fight poverty, and, in particular, to ensure that policy decisions are based on scientific evidence. We do that by conducting one specific kind of project evaluation called randomised evaluation, which is similar to clinical trials in pharmacology, and try to ensure that policy decisions are based on the results of such evidence.

We have three types of activities. One is to conduct such projects in collaboration with various partners. The second is training — we train people on how to conduct this kind of evaluation of development projects. The third is dissemination of our findings to policy makers.

So the difference between this approach and earlier efforts is the emphasis on rigorous evidence, in particular randomised evaluation.

In how many countries do you have these projects running?

We have projects in many countries. I should add the Lab is now called The Abdul Latif Jameel Poverty Action Lab (J-PAL) after a generous donation we received in 2005. It is a network of researchers; we have around 35 researchers in India, Europe and the US. The Lab has projects running in 22 countries and India, of course, is one of them. India is a big country for us, and we have projects in Kenya, Morocco, Indonesia, the US, France and many others.

When it comes to anti-poverty schemes, in a very broad sense why do you think that the intentions and the money spent do not often match the outcomes? Why is the delivery often so poor?

I would say there are two different issues here. One is that it is not so much that there are no outcomes, it is more that we don’t know whether or not these outcomes are there or not. This is because things are being tried and rolled out everywhere before knowing whether this is the best way to spend the money.

For instance, we hit upon this scheme of school meals and before we can really assess its impact, the scheme gets implemented everywhere. And once it is implemented on a wide scale, too much is at stake to really take the time out to see whether it is making the difference that it was expected to make.

I am not criticising school meal scheme; I am just giving you an example of a scheme that was scaled up soon after the concept was adopted.

Or let’s take NREGS; once the concept was adopted it was immediately put in place in the 100 poorest districts without understanding whether it would really make an impact on the lives of the people in those districts. That doesn’t mean that this programme does not have an impact, it’s just that we don’t know enough about it. So this could lead to a great deal of scepticism about the efficacy of this scheme.

There is also the danger of the next Government scrapping the scheme, saying that it does not work, when the scheme might just have worked.

So the point I am making is that it is not as if there are no outcomes of the various anti-poverty schemes; it’s just that we do not know enough about the outcomes.

The second point is our lack of knowledge could also make us pick or choose the wrong schemes. Schemes could be chosen based not on whether they work well on the ground but because it was someone’s idea of the day. So, some times programmes and schemes are implemented without the requisite thinking/understanding about whether they would work.

I’ll give you the example of the National Rural Health Mission. When the UPA Govt came to power in 2004, it decided to spend more money on this scheme which was welcome because at that time only 0.9 per cent of GDP was being spent on public health, which was clearly not enough.

But the way the money was spent left much to be desired. Money was spent on the existing system with little attempt to reform it: Repainting Public Healthcare Centres, adding more nurses, and, with the Accredited Social Health Activist (ASHA), basically adding a new layer of bureaucracy. This is despite the fact that the system as it is works very poorly. The nurse absenteeism is at least 40 per cent.

A lot of health centres have no drugs. People are not immunised even though immunisations are free. So, you would think that if you are going to triple the health budget, which is a good idea, you would want spend some time in finding out how that money is going to be spent. But the money is spent in a hurry, so we end up having more of the same.

No time is taken before implementation to try and assess what has worked and what has not worked in the health system. So, this does end up affecting the effectiveness of the programme.

On a personal note, you have been named as among the top 100 thinkers in the world today. The Daily Telegraph and The Independent called you France’s most important intellectual. How do you, on a personal level react, to all that praise?

Well, there was some hype when I was invited to deliver a series of lectures in France (she was invited to deliver a lecture series at the prestigious College De France earlier this year), but it is mainly because I was younger, and a woman, in an institution where most professors are on the older side, and male. So it’s nothing to take too seriously. About being France’s most important intellectual, I don’t think I belong to that league.

You've done some research on the impact on affirmative action on development and reducing inequality. Could you share your views on this with us? How effective are caste-based/gender-based affirmative action programmes in bringing about development and reducing inequality?

I am not a specialist on caste-based reservations in jobs or in universities, I haven't studied them in detail. But there is a study by Mullainathan et al on the impact of caste-based reservations in engineering colleges. And it showed that reservations do help in bridging some inequality gaps. The scheduled caste (SC) student who gets into an engineering college through reservations is much poorer than the non-SC person who does not get in. Sometimes it is said that it is really the cream of the SC population who are displacing other backward classes (OBC) students of poorer backgrounds, but that doesn't seem to be the case. So, at the very basic level, reservations seem to play a role in bridging some fundamental inequalities in the society. But we still need to know more about the future outcomes of reservations.

I have done some research on the impact of gender-based reservations in local panchayats. We started this project in one village each in West Bengal and in Rajasthan in 2002. We conducted detailed surveys where women were village Pradhans and found that when women are in positions of power they tend to take up and solve issues which matter to women. For instance, in both villages, women seem to be more concerned with drinking water supply and roads; as a result there were more investments in these two areas.

So our results suggested that reservations do impact policy choices. Women when elected as leaders under reservation policy do invest more in public good that are of greater concern to women. Moreover, after a village is reserved for one cycle, people have a better opinion of women and are much more likely to vote for women after the village is not reserved any more; so this is a way for women to find their way into the system.

Do you think that India's rather hesitant and cautious approach towards financial sector reform helped it withstand the ravages of the financial meltdown witnessed in other parts of the world in the last two years?

I won't say India's approach towards reform has been hesitant. The reforms initiated in 1991 were quite radical in its scope and breadth. But I can't say much about financial sector reform in India, as I haven't studied that in detail. But in the US, there was too much deregulation and they got hit very badly. In India, the sector was more regulated; so they were not as badly affected. So, yes, in that sense you could make that connection.

But I would say that now that the reform measures have been in place at the macro-level, it is time to focus more on the social sector. That is more crucial now as you cannot have runaway growth in some sections of the society and stagnation in other parts. This will only increase inequality, which is already very high, eventually creating severe political tension. So for the sake of social and political cohesion, and for a broad adhesion of all to the growth process, India must focus more on the social side of things. It should get its best and most brilliant minds together in putting in place policies which help the poor and help reduce inequality. Sectors such as rural health and primary education should get more support.

More Stories on : Interview | Economy | Economics

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Renewed thrust on alternative energy

Farmers and fertilisers

Clearing the air on 2G Spectrum

Credit Policy: Right stance, practical nuances

A superb juggler’s act

Scientific approach to fighting poverty

Agriculture and economy

Delhi Metro mishaps