JUDY WOODRUFF: The foreign aid dispensed every
year by the U.S. amounts to about 1 percent
of the total federal budget, but that tiny
percentage is often a giant political target.
In recent weeks, some in the Trump White House
tried again to stop some foreign aid funding,
before the president stopped the effort.
The criticism?
It's a waste of money and doesn't work.
But, in Ethiopia, some economists recently
sought to test different anti-poverty programs.
And, as Fred de Sam Lazaro reports, finding
out what works makes it easier to find out
how to help.
Tedros Kesete and Taame Tesfaye have a daunting
job, tracking down hundreds of the poorest
people in Ethiopia.
They're looking for specific individuals who
took part in an anti-poverty program more
than five years ago, all this in an area with
few street addresses and even fewer street
signs.
TEDROS KESETE, Data Collector: When you walk
around two hours, and you didn't get the household,
the head, you feel so angry at that time.
FRED DE SAM LAZARO: Around the world, one
in 10 people gets by on less than $2 a day.
In Ethiopia, it's more than one in four.
And due to the changing climate's impact on
agriculture, subsistence is only getting harder
for most people.
Polls in the developed world show broad support
for anti-poverty aid.
But there's one major obstacle, according
to development expert Rachel Glennerster.
RACHEL GLENNERSTER, U.K. Department for International
Development: A big concern that people have
is, I would like to support the ultra-poor
if I knew that there was something that I
could do.
And I think most people's suspicion is, oh,
aid is wasted or aid is not effective.
FRED DE SAM LAZARO: For decades, there was
little evidence either way on the effectiveness
on anti-poverty programs.
Almost no one was studying the impact, especially
long-term impact, of the various approaches
to humanitarian aid.
Economist Dean Karlan got his start working
for a micro-credit program in Latin America.
DEAN KARLAN, Northwestern University:
I was really struck by how little they knew
about whether they were generating an impact.
Should they add training to what they were
doing?
Should they be lending at this interest rate
or that interest rate?
And there really was just nothing resembling
evidence and data that was being used to inform
these kinds of decisions.
FRED DE SAM LAZARO: So in 2002, Dean Karlan
founded Innovations for Poverty Action, a
nonprofit organization that applies rigorous
research methods to anti-poverty aid.
In Ethiopia, Tedros is part of the team helping
experts like Karlan understand which programs
actually help the poor.
Half of the villagers Tedros is tracking down
received an anti-poverty aid package seven
years ago.
The other half didn't.
You draw the analogy in your approach to what
happens in medical trials.
Explain that to me.
DEAN KARLAN: If you want to know whether a
certain pill works, you can't just have a
bunch of people who have a problem, give them
the pill, and see if they get better, because
there's lots of reasons why ailments go away
or get worse, and things like that.
And so you have to have a placebo group.
FRED DE SAM LAZARO: Five hundred villagers
were randomly assigned to the treatment group,
and another 500 to the control group.
Tedros and his colleagues assessed both groups'
well-being at the outset, then at one, three,
and now seven years later.
The question is, did those who received help
do better, and, if so, how much better and
for how long?
RACHEL GLENNERSTER: At the most fundamental
level, the ultra-poor program and the research
around it is asking, can you take people who
are in the very worst situations, and put
them on a different path in life?
FRED DE SAM LAZARO: This was a multipronged
intervention.
Each household received four different kinds
of help over two years.
They got to choose a productive asset, valued
at 360 U.S. dollars.
Most chose goats, for milk and for more goats.
Some chose oxen.
Still others chose bees.
They were encouraged to save money at a community
bank, with no withdrawals permitted until
their balance equaled the value of the assets
they'd been given.
They received staple foods, valued at $8 U.S.
per month, to help get through the lean season
and grow their new business.
In Ethiopia, the control group also received
this aid.
Finally, the treatment households received
weekly visits over two years, training them
to manage and market their asset and coaching
them on general life skills and confidence.
I asked Karlan if it was important to do all
these things at once.
DEAN KARLAN: The idea is maybe if you provide
some money to somebody to start a business,
but no training in how to run that business,
then it doesn't work so well.
And so the answer is, no, no, no, do both.
FRED DE SAM LAZARO: So a lot of factors cause
a person or a family to be in poverty, and,
likewise, to attack the poverty, you need
to have a multipronged approach.
DEAN KARLAN: That's right.
That's right.
FRED DE SAM LAZARO: Not everyone is eager
to help Tedros collect data on Karlan's experiment,
particularly the control group, which received
no assets.
TEDROS KESETE: You interviewed yearly, but
you didn't give anything until now.
They said like that.
But the goal is to collect pure, accurate
and clean data.
And I think I do it.
FRED DE SAM LAZARO: The data collected by
Tedros and dozens of his colleagues is transmitted
back to Innovations for Poverty Action, which
partners with Yale University and Northwestern
University.
That's where Dean Karlan's team of academic
economists takes the baton.
Their work must be equally painstaking.
This data analysis is complicated.
And you had some families in the control group,
or you had all the families in your control
group that didn't get any assets.
Many of them did very well.
What is that telling you?
DEAN KARLAN: We can take any story, one data
point, and then we can tell a story from it.
Find one household that was ultra-poor beforehand
and got this program and now is doing much
better.
Suppose, instead, you wanted to tell a story
about aid being horrible and aid being wasted.
Well, we can find a household that was doing
really, really badly beforehand, in extreme
poverty, got this program, didn't work.
FRED DE SAM LAZARO: So a lot of the marketing,
if you will, or the accountability has come
in the form of anecdotal information, as opposed
to methodical study.
DEAN KARLAN: So there's always going to be
data points you could pull to tell whatever
story you want.
And the answer comes from looking in aggregate
at the data and looking at the patterns.
FRED DE SAM LAZARO: And once Karlan's team
finished crunching the numbers, a clear pattern
emerged.
One year after the program concluded, there
were significant gains in all major measures,
revenues, savings, food consumption, and total
assets.
And policy-makers are listening.
Encouraged by the graduation programs results
to date, the Ethiopian government has already
scaled the project from 500 households to
8,000, according to Mulugeta Berhanu, a longtime
aid officer in Ethiopia.
MULUGETA BERHANU, Relief Society of Tigray:
They have the plan to increase this to 150,000
households in the coming five years.
So, research, they have really great impact
in convincing policy-makers.
FRED DE SAM LAZARO: It's not just Ethiopia.
The program's multipronged attack on extreme
poverty has been tested in a six-country study.
It proved beneficial and cost-effective in
Ghana, India, Pakistan, and Peru, but not
in Honduras, where disease wiped out the chickens
that most families chose us their asset.
RACHEL GLENNERSTER: The evidence is really
quite strong that this approach of combining
a package of different interventions to help
the ultra-poor is very successful.
It's been successful in a range of different
countries and over a long term.
It tells us that people who are really poor
can have a radical change in their life.
TEDROS KESETE: When you see, like, these things,
you feel happy.
You love what are working, and you feel glad
what you are doing.
FRED DE SAM LAZARO: I asked Dean Karlan if
his scientific methods can help bridge the
dramatic partisan divide over foreign aid.
DEAN KARLAN: Anybody who ever tells you that
all aid is wasted is wrong.
And anybody who tells you that all aid works
is wrong.
The answer is, well, let's find out.
When does it work?
When does it not?
What are the patterns?
Let's do the things when it works, and let's
stop the ones that don't.
FRED DE SAM LAZARO: For the "PBS NewsHour,"
this is Fred de Sam Lazaro.
JUDY WOODRUFF: Fred's reporting is in partnership
with the Under-Told Stories Project at University
of St. Thomas in Minnesota.
