WS MoreOrLess: Money for nothing?

Summary

More or Less: "Money for Nothing?"

BBC World Service | June 21, 2014
Host: Ruth Alexander

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Overview

In this episode of More or Less, Ruth Alexander explores whether giving direct, unconditional cash aid to the poorest in rural Kenya is effective. The episode dissects the Give Directly project, which transfers cash straight to villagers—no strings attached—and the randomized controlled trial (RCT) used to assess its impact. Alongside recipients' stories, the programme delves into the promises, drawbacks, and ethical concerns of cash transfers and how their evaluation compares to traditional aid methods.

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Key Discussion Points & Insights

The Origins and Method of "Give Directly"

• MIT students' idea: Instead of assuming outside organizations know best, why not just give cash? Technology, like mobile banking, now makes this feasible.
• Give Directly's model:
  • Transfers of up to $1,000 (£130 in some cases) direct to poor families in rural Kenya, via mobile phones.
  • No conditions—recipients decide how to spend the money. [01:11]
  • Paul Niehaus: "This blew my mind, but you can now go to a website and upload a spreadsheet with a list of phone numbers and amounts and hit send. And what that means practically is that recipients will get a text message telling them your money has arrived..." (Paul Niehaus, 01:43)

Real-life Impact: Recipient Experiences

• Moses Laguna:

  • Received about £130 (20,000 shillings).
  • Used the money to pay a dowry, care for children, buy food, and purchase goats.
    • "I was extremely happy. They gave me 20,000 shillings. My problem was on food, so I bought some food and three goats. Here is a goat that you can see for yourself. One has just given birth." (Moses Laguna, 02:57)

• Michael Medego:

  • Used part of his $1,000 to pay his son's college fees and improve his home.
    • "The house. You will build a house and you may take several years before erecting another one. So my first priority was to put up a house, then the rest will come later. And we pray and work hard and God bless us." (Michael Medego, 03:32)

Measuring the Effectiveness: The Randomised Controlled Trial (RCT)

• RCT Design:

  • Some villagers received money; a control group received nothing.
  • Researchers returned a year later, spending about six hours interviewing each recipient about their assets, income, and expenditure. (Paul Niehaus, 05:12)

• Results:

  • Recipients reported 60% more assets, invested in livestock and home improvements.

  • For those investing in animals, incomes rose.

    • "The reported results show that those who got the cash were indeed better off at the end of a year than those who got. They held almost 60% more assets after spending the money on livestock and home improvements." (Ruth Alexander, 05:22)

• Paul Niehaus's take:

  • "The returns are strong enough that we should start thinking about cash transfers as at least a benchmark or a lower bound on the impact that we want to get out of our development work." (Paul Niehaus, 05:58)

Limitations and Ethical Dilemmas

• Potential for Resentment:

  • Unequal distribution led to tension within villages.
    • "Some villagers, some community members were not so happy with her because they are now seeing like they have now moved to another living standard. And even some were saying that the project or the money is evil and the organization or those people who send them transfer will come back and take their blood." (Agnes Nayangoya, 06:39)

• Ethical Justification by Niehaus:

  • Argues lottery is fair and necessary for learning effectiveness, given that not everyone can be helped.
    • "It's fair in the sense that everybody up front has the same chance of getting it and you get this added benefit of learning whether the thing you're doing actually works." (Paul Niehaus, 07:00)

Broader Currents: RCTs in Development

• James Copestake (University of Bath):

  • Warns against the "magic bullet" view of RCTs.
    • "One of the limitations is that people managing aid programmes go out and look for the activities which they can test in this way. In other words, the tail of evaluation starts wagging the dog of doing good development." (James Copestoke, 08:36)

• Dean Karlan (Yale, project research director):

  • Highlights that RCTs help isolate whether the program—rather than external factors—caused improvements.
    • "Can we really attribute the change in what happened to the program? Or could it be some outside factor? ... Running randomized trials is exactly designed to try to tackle that issue." (Dean Karlan, 07:53)

Cultural Context: Critique of Traditional Aid

• Ruth Alexander points out the growing skepticism—both locally and globally—about traditional aid projects, reflected in Kenyan media that lampoons ineffective NGOs. [04:13]

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Notable Quotes & Memorable Moments

• Paul Niehaus on cash transfers and transparency:
  • "Recipients will get a text message telling them your money has arrived and then they'll go to the nearest agent ... to cash out and get their hands on the paper money." (01:43)
• Moses Laguna, on what the money meant:
  • "I was extremely happy. ... I bought some food and three goats. Here is a goat that you can see for yourself. One has just given birth." (02:57)
• Paul Niehaus on fairness of randomisation:
  • "It's fair in the sense that everybody up front has the same chance of getting it and you get this added benefit of learning whether the thing you're doing actually works." (07:00)
• James Copestake on RCT limitations:
  • "You may find positive results, but it doesn't necessarily mean that that particular activity was the right one to choose." (08:36)

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Segment Timestamps

• [01:11] Introduction to Give Directly's methods and objectives (Paul Niehaus)
• [02:27] Recipients' stories: Moses Laguna and Michael Medego
• [03:47] Questioning effectiveness and evaluation methods
• [05:12] How the RCT was conducted
• [05:22] Surveyed outcomes from the trial
• [06:39] Villager resentment and ethical concerns
• [07:21] Discussion about ethical guidelines in randomized trials
• [07:53] Dean Karlan on challenges in traditional aid evaluation
• [08:36] James Copestake on RCT limitations

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Conclusion

This episode critically examines whether simply giving cash to the poor is a better way to do international aid, and how randomised trials can both enlighten and complicate the path to effective development. While the results are promising, the episode encourages ongoing scrutiny—both of methodology and ethics—ensuring cash transfer programs truly empower recipients and improve lives.

Transcript

[A]

This is the short edition of More or Less first broadcast on the BBC World Service.

[B]

Thank you for downloading from the BBC. For details of our complete range of podcasts and our terms of use, go to bbcworldservice.com podcasts.

[A]

Hello and welcome to More or Less on the BBC World Service. I'm Ruth Alexander. A few years ago, a group of postgraduate students at MIT in the United States were chatting about what might be the best way to give aid in Africa. With so many well meaning charities from the US and Europe arriving with their various ideas of how to help people out of poverty, how do you choose which is the best way? What if they recent? Instead of presuming aid workers know best, why not just give cash to the extreme poor and allow them to make their own decisions about how to spend

[C]

was both potentially desirable and also feasible. Now to get money directly into the hands of really poor people in a way that was never before possible.

[A]

This is Paul Niehaus. He and his fellow students set up a charity called Give Directly where they arrange to give up to $1,000 to poor families in rural Kenya. This wasn't the first time that organisations had given cash direct to poor people, but in previous programs usually there were strings attached, but for Paul and his colleagues, their condition was that there were no conditions. Spend it how you like. They used a mobile phone banking service to pay out the money.

[C]

This blew my mind, but you can now go to a website and upload a spreadsheet with a list of phone numbers and amounts and hit send. And what that means practically is that recipients will get a text message telling them your money has arrived and then they'll go to the nearest agent, who's typically a shopkeeper in their village or in the nearest town, to cash out and get their hands on the paper money.

[A]

They chose a group of villages in the far west of Kenya. Many of the people living here grow crops and look after animals. There are clusters of grass, thatched and tin roofed houses surrounded by fields where cows and goats graze. We sent a producer based in Kenya to record the experiences of some of the people who received money from the charity.

[D]

There was a group from Give Direct who came here doing research and asking me many questions like what have I spent in a month? And by luck they chose me and gave me a promise that they will give me some money.

[A]

Moses Laguna was one of those who got the money a about £130, which is a lot of cash in rural Kenya. It enabled him to pay a dowry, to get married and to look after his two children.

[D]

I was extremely happy. They gave me 20,000 shillings. My problem was on food, so I bought some food and three goats. Here is a goat that you can see for yourself. One has just given birth.

[A]

Another beneficiary was Michael Medego. His elder son is studying carpentry at a technical college. But when the researchers gave him $1,000, he was able to use some of that to pay the college fees. Michael, like many of the villagers given money by the researchers, spent a substantial amount on his home.

[D]

The house. You will build a house and you may take several years before erecting another one. So my first priority was to put up a house, then the rest will come later. And we pray and work hard and God bless us.

[A]

This is all very well and good, but how do we know that this was an effective way to give aid?

[E]

I've been appointed by head office as your new country director for Kenya. I'm Scott Bartley.

[A]

This is a scene from Samaritans, a new TV comedy that's recently started in Kenya.

[E]

Now, as your director, I'm here to make that difference, that change for Africa.

[A]

The show makes fun of a fictional NGO that has no clue what its purpose is. The fact that a TV channel in Kenya is making fun of pointless charities underlines the idea that aid workers can pile in while having little real knowledge of whether they're making a difference. This is another way in which the MIT students made their project different. They set up a randomised control trial, an rct, as they're known. They're basically the gold standard way of measuring the effectiveness of a treatment in medical trials. But in this case, they gave one group of people not medicine, but money. The other group, a control group, received nothing. Such control trials are rapidly catching on in development aid, although they're still by no means the standard approach. A year later, researchers returned to the villagers to examine what impact the money had made. They spent about six hours with each villager asking them questions about the past year.

[C]

You're asking about income, expenditures, assets. How much fish did the household eat last week? How much meat, what mix of grains? These kinds of questions.

[A]

That's Paul Niehaus again. So what can the trial tell us? Well, the reported results show that those who got the cash were indeed better off at the end of a year than those who got. They held almost 60% more assets after spending the money on livestock and home improvements. And for those that invested in animals, their income increased. All positive things, but there are some important questions. This experiment's results don't answer. Will this cash injection have had any long term impact? And could you have got even better results by giving aid in other ways? PAUL NIEHAUS well, the first thing I'd

[C]

say is I would never look at one project in isolation. One experiment. My read is the returns are strong enough that we should start thinking about cash transfers as at least a benchmark or a lower bound on the impact that we want to get out of our development work.

[A]

But isn't that also an ethical concern? What about the unlucky villagers who got nothing in a medical trial? People take a treatment in isolation. In the case of the Kenyan village, the fact that some people were given money and some people weren't is on display for all to see. It did create tension in the villagers. Agnes Nayangoya is one of the villagers who received the money and felt the resentment of others.

[F]

Okay, some villagers, some community members were not so happy with her because they are now seeing like they have now moved to another living standard. And even some were saying that the project or the money is evil and the organization or those people who send them transfer will come back and take their blood.

[C]

There is no organization in development anywhere that reaches all the people it would like to. And given that you're not going to be able to reach all the people you would like to, you might as well choose the ones who do with a lottery. It's fair in the sense that everybody up front has the same chance of getting it and you get this added benefit of learning whether the thing you're doing actually works. So I think it's both more ethical and more informative to do it that way.

[A]

PAUL Niehaus in medicine, there's an evolving body of ethical guidance about randomised trials. Is it okay for a control group to get nothing or should they get treatment after a delay? The ethical guidelines for aid randomised controlled trials are going to have to be sorted out because randomised trials are definitely in fashion. We've also been speaking to Dean Carlin, who's a professor at Yale University in the US and who heads the group which did the research in these Kenyan villages. He says traditional aid projects have been difficult to assess in the past.

[G]

Can we really attribute the change in what happened to the program? Or could it be some outside factor? Just, you know, good rainfall, good macroeconomic conditions, or even just the high levels of entrepreneurial spirits of some people who participate in a program. They're on a better trajectory and so they do better. These are the types of challenges that have plagued social science for a long time and running randomized trials is exactly designed to try to tackle that issue.

[H]

There is this risk that they're seen as a magic bullet approach, but there

[A]

are a number of limitations of randomised controlled trials. According to James Koepsteg, professor of international development at the University of Bath in

[H]

the uk, one of the limitations is that people managing aid programmes go out and look for the activities which they can test in this way. In other words, the tail of evaluation starts wagging the dog of doing good development. You may find positive results, but it doesn't necessarily mean that that particular activity will was the right one to choose.

[A]

James Copestoke if there are any numbers you'd like us to investigate or explain, do please email us. Our address is more or lessbc.co.uk and you can also sign up for a free download of this programme at our website bbcworldservice.com More or less There are

[B]

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