Tackling Extreme Poverty through Programmes Targeting the World's Ultra-Poor

LSE Public Lectures and Events – Dec 9, 2015

Overview

This episode explores the “graduation model” for tackling extreme poverty, with a special focus on BRAC’s Targeting the Ultra Poor (TUP) programme in Bangladesh and its international replications. Esteemed academics, policymakers, and BRAC leaders present the origins, scaling, impact, and evaluation of this innovative approach, examining why the ultra-poor require programmes beyond classic microfinance and the global implications for poverty eradication under the SDGs.

Key segment speakers include Mushtaq Chowdhury (Vice Chair, BRAC), Anna Minj (Director, BRAC TUP), researchers Oriana Bandiera and Esther Duflo, and The Rt Hon Desmond Swain (UK DFID Minister).

1. Introduction & Background

[00:00–05:44] Robin Burgess (Host, LSE IGC & Prof. of Economics)

• Set-Up: Sir Fazle Hasan Abed (BRAC’s founder) was scheduled to keynote but was unwell; his role filled by Mushtaq Chowdhury (BRAC Vice Chair) and Mohammad Moussa (Exec. Dir., BRAC).
• Episode Structure: Keynote by Chowdhury (BRAC’s graduation approach), reflections by Moussa, policy view from Desmond Swain (DFID), ground-level insight from Anna Minj, followed by impact evaluations from Oriana Bandiera (LSE) and Esther Duflo (MIT/J-PAL).
• Graduation Model Context: Burgess frames the graduation programme as a social innovation developed through an extensive LSE-BRAC collaboration, now influencing global strategies on extreme poverty.

Notable Quote:
“When I went out to Bangladesh, I was shown this program in pilot stage... it was interesting that already then you could see something had happened to them in terms of work, assets, and confidence.” – Robin Burgess [04:59]

2. The Evolution of BRAC & the Ultra Poor Programme

[05:44–23:22] Mushtaq Chowdhury (Vice Chair, BRAC)

• Bangladesh’s Development Achievements:
  • Population 160M, yet strong progress on MDGs (education, health, poverty reduced from 60% in the ’80s to about 24%).
  • NGOs, particularly BRAC, credited as catalysts due to their scale and holistic mandates.
• BRAC’s Origins & Philosophy:
  • Founded in 1972 post-independence for relief, quickly evolved to development work and large-scale delivery (microcredit, health, education).
  • Emphasized scale, replicability, and evidence-driven innovation: “It is probably in the DNA of BRAC leaders that if something is effective in a small village, it is our responsibility to take it to as many people as possible.” [17:22]
  • Example: Nationwide campaign to teach women oral rehydration therapy; learned about the importance of belief among trainers and involving men in health adoption.
• Learning from Failure – Microfinance & The Ultra Poor:
  • Initial microcredit failed to reach the poorest due to both supply (reluctant lenders) and demand (opportunity cost for the poor to participate).
  • Key Realization: The ultra-poor need more than credit: different, more holistic interventions are needed to include them.

Notable Quote:
“If I can achieve at least 10% of what Sir Fazle Hasan Abed achieved, I’ll feel I am successful in life. His shoes are at least ten times bigger than mine.” – Mushtaq Chowdhury [05:59]

3. What Makes BRAC Different?

[23:23–34:23] Mushtaq Chowdhury

• Belief in People’s Power: The ultra-poor are seen as agents of their own change.
• Holistic Approach: Poverty isn’t just lack of income—it encompasses education, health, social exclusion, and lack of empowerment.
• Scale, Quality, Innovation:
  • Largest private education network worldwide (40,000 schools, 1M children), extensive health and microfinance programs.
  • Internal audit and ombuds processes reinforce transparency—over 300 internal auditors and an independent ombuds.
  • Sustainability: 70% of BRAC’s $1B budget is self-generated via social enterprises (e.g., dairy, artificial insemination, vet training).
• Global Reach: Solutions refined in Bangladesh are being adapted for other countries (BRAC works in 11 countries).
• Donor Partnerships: Emphasis on innovative funding models (e.g., UK DFID and Australian partnership for flexible core support).

4. The Policy and SDG Perspective

[34:30-41:38] Rt Hon Desmond Swain (Minister of State, DFID)

• Personal Anecdote: Visits BRAC youth club in Bangladesh—witnesses profound empowerment among adolescent girls.
  • “One of these girls got up...and said: ‘Now look here, we’ve been looking forward to this... we’re bloody well going to carry on with this or we’ll be very pissed off indeed. So shove it.’” [36:44]
• Partnership Endorsement:
  • UK-Australia-BRAC partnership has invested £223M since 2011, described as “one of the best investments we have made in order to lift a million people out of poverty.” [38:56]
  • Asserts BRAC’s graduation model as viable for meeting the 2030 goal of ending absolute poverty.

5. How the Graduation Model Works

[41:38–54:47] Anna Minj (Director, BRAC TUP)

Why Is the Programme Needed?

• Ultra-poor remain excluded even in Bangladesh—too destitute for microfinance; many government safety net programs are only “protective, not transformational.”
• “17% are living below the poverty line... chronic hunger, malnutrition, inadequate shelter...” [41:55]

Essential Programme Features:

1. Targeting: Participatory rural appraisal, social mapping, and strict household criteria identify the ultra-poor (e.g., <10 decimals land, no productive assets, reliance on begging/day labor).
2. Asset Transfer & Stipend: Each participant receives a productive asset (goat, poultry, materials for trade/production), plus a stipend for short-term needs (“breathing space”).
3. Training: Classroom and home-based hands-on sessions—business skills, confidence, health, and social inclusion.
4. Tailored Health Support: Access to health workers, doctors, and medicine; aims to prevent medical costs from derailing progress.
5. Community Mobilization: Village Poverty Reduction Committees (VPRCs) support inclusion and protect beneficiaries; focus on social ties and justice.
6. Coaching/“Handholding”: Frequent visits and support sessions to build skills, confidence, and aspirations.

Key Success Factors:

• Combination of assets + skills + coaching.
• Holistic inclusion (social, health, economic).
• Constant model adaptation; ongoing scale-up in Bangladesh and internationally (Uganda, Tanzania, Sierra Leone, Liberia).

Notable Plan:
Further scale-up to reach an additional 500,000+ households by 2020.

Short Explainer Video at [51:55–54:46]:
Profiles “Sabina,” a typical program participant, showing how asset grants, training, healthcare, and social support transform her life and future prospects.

6. Evaluation: Long-term Economic Impact

[55:04–68:32] Oriana Bandiera (LSE, Prof. of Economics)

• Labour Market Realities:
  Ultra-poor women are mostly casual agricultural laborers or housemaids (low wages, irregular hours, underemployment), unlike wealthier villagers who rear livestock or own land.
  • “The poor do jobs which are paid less. These casual jobs are only available rarely—on average, just 4 months of the year.” [56:45]
• Breaking the “Poverty Trap”:
  • Graduation program gives assets worth up to two years’ wages, plus training; careful RCT shows beneficiaries overwhelmingly keep and use these assets.
  • Results include:
    • Shift from casual wage labor to livestock and enterprise (more stable, better paying).
    • Long-term gains: After 4 and 7 years, significant increases in income, asset ownership (especially land), and savings.
    • Sustained impact: Effects persist and even grow after 7 years—proof that “graduation” is durable, not a temporary boost.
  • Cost analysis: At $300 (USD PPP $1,300) per household, rate of return >20%; benefits far outweigh costs.

Notable Quote:
“It was a massive transformation. BRAC succeeded in breaking the poverty trap. This was a great success indeed.” – Oriana Bandiera [65:56]

7. International & Comparative Evaluation

[68:49–84:31] Esther Duflo (MIT/J-PAL, Nobel Laureate)

Key Questions Explored:

1. Is BRAC’s impact unique to Bangladesh—or does the model work elsewhere?
2. Is the full, intensive package (assets, stipends, coaching, health, etc) necessary—or can it be simplified?
3. Are the impacts long lasting?

Findings:

• Replication: Multi-country RCTs (6 countries across 3 continents) show similar positive outcomes on assets, income, food security, financial and mental health—even in programs run by governments or smaller local NGOs.
  • “We are way past the proof of concept stage... This is a formula.” – Esther Duflo [73:58]
• Package vs. Simpler Approaches:
  • Lesser results from “just a goat” (asset-only handouts) versus the full package; asset alone is insufficient for meaningful or lasting change.
  • Long-term impacts: Effects continue to rise over time (e.g., India 7-year results even larger than at 1–2 years).
• Policy Implications: Graduation models are scalable, publicly “bankable,” and worth the (still modest) investment.

Closing Reflections:

• There may still be “ultra-ultra” poor for whom effects are smaller—future research can target design tweaks for this group.

8. Panel Q&A: Replication, Urban Poverty, and Sustainability

[85:10–91:24] Audience, Duflo, Minj, Bandiera

Key Questions:

• Why were results stronger in India but lower in Honduras? — Duflo speculates asset type (chickens in Honduras died) and context (poorer countries, lower costs, bigger impact).
• Can this model work for urban poverty? — Duflo: “Definitely an open area for research; likely need to adapt assets (capital not cows) but the approach could be trialed.”
• Can smaller organizations make it financially sustainable? — Duflo: Sustainability should be understood socially, not just financially: “We are willing to pay to get rid of [extreme poverty].”
• How does BRAC’s model address climate resilience and migration? — Minj: Climate-resilient livelihoods and disaster-preparedness are built in; BRAC delivers community-wide adaptation lessons.

9. Memorable Quotes & Moments

• Mushtaq Chowdhury:
  “If you give the knowledge to the people, they will automatically start using it. So there was a huge knowledge and practice gap.” [16:23]

• Desmond Swain:
  “We are now engaged in this great joint endeavor to deliver the global goal of abolishing absolute poverty by 2030, leaving no one behind... I believe in BRAC we have found a model by which it can be achieved.” [39:50]

• Anna Minj:
  “Quite coaching and hand holding is very important... unpack their social problems. The program... works through holistic approach to address health care and social inclusion.” [48:55]

• Oriana Bandiera:
  “The ultra poor at baseline couldn’t even afford a goat, now are able to save until they buy land.” [63:03]

• Esther Duflo:
  “It is not BRAC’s magic touch—what it does, it does well, and in several countries with several types of people. We can be reasonably confident this can be replicated.” [73:38]

10. Timestamps for Key Segments

• 00:00–05:44: Episode Set-Up – Robin Burgess
• 05:44–23:22: BRAC: Origins & Philosophy – Mushtaq Chowdhury
• 23:23–34:23: BRAC in Practice & Scaling – Mushtaq Chowdhury
• 34:30–41:38: Ministerial Perspective – Desmond Swain
• 41:38–54:47: The Graduation Model: How it Works – Anna Minj & BRAC Video
• 55:04–68:32: Economic Evaluation – Oriana Bandiera
• 68:49–84:31: Global Replication – Esther Duflo
• 85:10–91:24: Audience Q&A – Panel

Conclusion

The graduation model, as implemented by BRAC, demonstrates an evidence-based, scalable, and holistic approach for moving the ultra-poor out of extreme poverty—not just in Bangladesh but around the world. Its comprehensive combination of asset transfer, hands-on training, stipends, health, and community inclusion is critical to success, as confirmed in both large-sample RCTs and replication studies. With costs more than justified by subsequent gains, the model offers a compelling policy roadmap toward the SDG target of “ending poverty in all its forms.”