Podcast Summary: The CGD Podcast — "Forget the Fish, Forget the Fishing Rod. Give a Man Some Capital" with Chris Blattman (August 10, 2015)

Episode Overview

In this episode of The CGD Podcast, host Rajesh Merchandani discusses with Professor Chris Blattman (Columbia University and CGD non-resident fellow) how international development policy might be overlooking the most effective mechanism for reducing poverty and violence in fragile states: capital, not just jobs or skills training. Blattman draws on his field research and meta-analysis, especially in war-torn Liberia, to argue that direct capital transfers—cash or assets—can shift people away from criminal or violent activity more effectively than traditional job creation or vocational training.

Key Discussion Points and Insights

The Persistence of Poverty in Fragile States

• Poverty is concentrating in unstable countries:
  "[In the future,] poor people are going to be in places that are mostly not growing because they're politically unstable." — Blattman (01:09)
• Policymaker assumptions challenged: Many assume job creation curbs violence, but Blattman's research suggests this is an oversimplification.

The Link (or Lack Thereof) Between Poverty, Employment, and Violence

• Not just about jobs:
  Violence and extremist recruitment aren't mostly driven by lack of jobs or poverty. Extremist group recruits are often from better-off, relatively educated backgrounds (01:51).
• Different forms of violence:
  Economic incentives play a larger role in criminal or mercenary violence than in ideologically driven extremism. Jobs and income opportunities can deter economically motivated violence but are less influential with ideological violence (02:46).

Case Study: Liberia’s Ex-Combatants

• Liberia post-civil war "hot spots": Large groups of young men, many ex-combatants, occupied rural areas without police or government presence (04:18).
• Intervention tested: Young men in these areas received skills training and/or in-kind capital (seeds, tools). The program was randomized due to limited resources (05:50).
• Results:
  • Only those receiving both skills AND capital shifted from illegal activities (e.g., resource theft) to legitimate work (farming).
  • Capital access was crucial; skills alone were insufficient (07:30).
  • Participants who received capital were less likely to participate in cross-border mercenary activities (e.g., during the Cote d’Ivoire conflict).

Why Capital Matters Most

• Skills alone aren't enough:
  "Sometimes skills matter, but people mostly seem to be held back by capital." (08:35)
• Flexibility and agency:
  Blattman advocates giving people the capital to choose their own path, not assuming “fishing rods or lessons” are the solution (09:00).
• In-kind vs. cash: In-kind is often chosen due to donor concerns over misuse, but evidence shows little cash is wasted (10:25).
• Supporting evidence:
  20+ studies show negligible amounts of given cash are spent on alcohol, drugs, or other “bad” things. Even ex-combatants usually invest or save the money (10:30).

Rethinking Jobs, Skills, and Aid Programs

• "Work, not jobs":
  "Where we seem to be best able to create work on a large scale is by helping people improve the things they're already doing on the margin..." (11:10)
• Cost-effectiveness:
  Skills training programs are expensive and rarely justifiable by the impact, especially for men. "Training programs are hard to get right and capital centric programs are hard to get wrong." (14:52)
• Current aid bias: Massive funds go into skills training, with poor value for money: “...they helped governments... spend $9 billion on training programs... That’s a ridiculous sum of money.” (15:05)

Three-Point Plan for Policymakers

1. Create flexible work, not traditional jobs: Focus on improving and expanding what people are already doing rather than formal jobs (11:10).
2. Capital-centric programs: Prioritize giving capital (cash or in-kind assets) over skills training, as the latter alone often yields limited results (11:10).
3. Manage expectations:
   "Expect good things in terms of poverty alleviation and expect good but more modest things in terms of crime... Don't overestimate how much this will change social security." (12:41)

The Policy Shift to Cash & Capital Transfers

• Need for reallocation, not more funding: Shift existing aid budgets from training to capital-centric models (16:18).
• Broader acceptance: Many governments are experimenting, e.g., with conditional cash transfers and startup grants. Political labeling improves acceptance (17:31).
• Private sector’s role: While unlikely to provide direct cash transfers, current remittance flows already act as massive capital injections into developing economies (19:24).
• Migration as capital transfer:
  "Increasing the number of people coming from... sub-Saharan Africa to rich countries would generate those cash transfers..." (19:30)

Notable Quotes & Memorable Moments

• Challenging aid orthodoxy:
  "Don't give a man a fish, don't teach a man to fish. Give him a fish." (08:52)
• On skills programs' inefficiency:
  "Training programs are hard to get right and capital centric programs are hard to get wrong." (14:52)
• World Bank spending:
  “They helped governments... spend $9 billion on training programs... That’s a ridiculous sum of money.” (15:05)
• On evidence for cash transfers:
  “There’s something like 20 studies now... negligible amounts are spent on this bad stuff.” (10:30)
• On aid effectiveness:
  “Most aid organizations probably waste most funds [on] directly employment generation.” (15:53)

Timestamps for Key Segments

• 00:06–01:28: Introduction, focus on jobs and violence in fragile states
• 01:51–03:49: Why jobs don’t explain extremism; difference between ideological and economic violence
• 03:57–07:54: Liberia research case study: ex-combatants, skills vs. capital, RCT findings
• 07:55–10:25: Defining “capital”; evidence for effectiveness of cash/in-kind vs. skills
• 11:00–12:45: Three-point plan for reducing poverty and violence
• 13:00–14:57: Evidence on cost-effectiveness of skills training vs. capital programs
• 15:05–16:18: Policy implications, World Bank spending critique
• 17:00–18:24: Political and practical considerations for shifting to cash/capital transfers
• 18:59–20:41: Private sector role in development finance; remittances and migration as capital flows

Conclusion

Chris Blattman's research calls for a fundamental rethink of international aid strategies focused on employment and violence reduction in fragile states. Evidence points to direct, flexible capital transfers—tailored to individual needs—as the most cost-effective, impactful way to move people away from crime and poverty. With substantial resources still being funneled into less-effective training programs, aid organizations and policymakers are challenged to act on what the evidence now overwhelmingly supports.

For more about CGD’s work and further discussions, visit CGD’s website.