The “Give Directly” Hypothesis

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A man checks his phone to confirm that the charity GiveDirectly has transferred a cash grant to his account. (Nichole Sobecki for NPR)

In 2013 Daniel Handel, an economist with USAID—the U.S. government’s main agency for foreign assistance—had just moved to Rwanda when he heard about a charity that was testing a bold idea:

Instead of giving people in poor countries, say, livestock or job training to help improve their standard of living, why not just give them cash and let them decide how best to spend it?

Handel had been mulling this exact question. Aid programs were spending enormous sums per person to boost poor people’s income less than the cost of the program. At this rate, Handel thought, why not just hand over the money to people directly? This program called GiveDirectly was doing just that.

So Handel went to his bosses at USAID’s Rwanda office and proposed an experiment:

Take one of USAID’s typical programs and test it against cash aid. For the comparison, he selected a program to improve child and maternal health in Rwanda by teaching families about nutrition and hygiene.

A pool of families from nearly 250 villages was selected based on typical criteria and randomly assigned to one of four groups.

  • Those in the first were the “control” and received no help.
  • Those in the second group were visited by the nutrition and hygiene education teams.
  • Families in the third group were given small cash grants by GiveDirectly equivalent to the per-person cost of the nutrition and hygiene program, an average of $114.
  • In the final group, families got a much larger cash grant of around $500 – a figure chosen because this was the amount that GiveDirectly estimated was more likely to make an impact.

Following the experiment, the government released the results of the first study in the series.

The experiment found that the program met none of its main objectives. Teaching Rwandans about nutrition did not improve their nutrition or health. Neither did giving Rwandans the cash equivalent of the cost of the education program — about $114.

“Our hearts sank.”

The program’s focus on trying to change behaviors is one of the world’s major strategies for ending malnutrition. And, at least in this example, it had failed to achieve any of its primary goals.

A year on, the children who had been targeted by the nutrition and hygiene program were no more likely to eat a better or more diverse diet, and no less likely to be malnourished or anemic than children who had gotten no help at all. But providing a much larger cash grant of about $500 did make some difference.

Supporters of such “cash-benchmarking” exercises are heralding this particular one as a milestone. For years, anti-poverty advocates and researchers have complained that the U.S. government doesn’t do enough to make sure its aid programs actually work. “But when you talk about giving money to people straight up, with no conditions, people at USAID look at you kind of like you’re a crazy person. There’s ‘an inherent sense’ that they can’t be trusted to spend it wisely.” said Daniel Handel’s associate James Carbonell.

  • In this case, people who were given the cost-equivalent grants used much of the money to pay down their debts.
  • It remains unclear what, if any, material changes USAID is planning to its nutrition efforts based on the study’s findings.
  • At the time of this writing (FEB 2019), USAID remains reluctant to discuss the experiment and did not grant the authors of the NPR story permission to speak directly to Daniel Handel about the results.

Discussion

  1. Did the authors of the study Fail?
  2. Would proving that cash-equivalent grants were as beneficial as the education program have qualified as Success?
  3. Or did the authors succeed by proving that simply handing recipients money without any stipulation was the wrong way to achieve a particular goal?
  4. Could the authors conclude that poor people really DON’T know “what to do with the money”?

Credits

Heavily edited from an original story by NPR.
Copyright 2018 NPR. To see more, visit http://www.npr.org/.

Link to the original:
https://whyy.org/npr_story_post/which-foreign-aid-programs-work-the-u-s-runs-a-test-but-wont-talk-about-it/

Further Reading

The Planet Money story: https://www.npr.org/templates/transcript/transcript.php?storyId=214210692

From Nonprofit Chronicles: https://nonprofitchronicles.com/2018/09/11/why-is-the-us-giving-cash-to-poor-people-in-africa-no-strings-attached-for-good-reason/


Brief Exercise

  1. In the Reply field below, briefly answer any or all of the Discussion Questioons, then discuss how you would respond to finding that your “My Hypothesis” proposal cannot be supported by the initial evidence.
    • (Assume in your Reply that you did not wait until the last week of the semester that the evidence did not support your Hypothesis. 🙂

About davidbdale

Inventor of and sole practitioner of 299-word Very Short Novels. www.davidbdale.wordpress.com
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30 Responses to The “Give Directly” Hypothesis

  1. thecommoncase says:

    1.) No. They found out more information about the problem even though it did not go the way he wanted to do.
    2.) It would not be qualified as a success because the education problem was never that successful in the first place.
    3.) The authors did succeed in ruling out a technique that does not work.
    4.) No, because they did use that money responsibly by paying off debts, which will benefit them in the long run. $114 or $500 can only go so far to feed a family, and what will they do when that money runs out?

    Like

    • davidbdale says:

      I like your theme. The experiment is a success if the experimenters learn something from it. That is the idea of using a risky hypothesis to launch your research. Instead of repeating the conclusions of others, you can go in search of something new and surprising.

      Like

  2. rosekyd says:

    1.The experiments mentioned in this article failed miserably
    2. The cash grants would have qualified as a success if the classes actually worked teaching them how to spend their money and save it as well.
    3. Of course handing the poor money with no education on how to use it wasn’t a good idea because their just going to go spend it on whatever they think they need at the current time with no other thought about the long term benefit
    4. Without the proper education the authors could conclude that poor people don’t know how to use money.

    Like

  3. rowanrat says:

    1.) The authors failed to improve health and food conditions through the use of cash. Some people were able to pay off debts with that money, but nutrition did not improve as a result.
    2.) Being that the programs did not succeed in improving conditions, neither the grants nor programs have succeeded.
    3.) The programs are to teach these people about malnutrition and how to stay healthy. While cash is important, the people should also be given the chance to learn how to be healthy. Just giving cash might not lead to the best results.
    4.) I don’t believe they can since they included that some used it to pay off their debts. No matter what, relevant or not, it was still used for a purpose and not on luxury.

    Like

    • davidbdale says:

      I agree with everything you say, but I still have a question. Did the experiment deliver any new knowledge? Asked another way, does the fact that the experiment did not prove the Hypothesis mean the experiment was a failure?

      Like

    1. The authors did fail because they didn’t produce any conclusive results.
    2. This would not have been a success because that wouldn’t end up making any difference. They would need to prove that it’s better than the prior method.

    3. They succeeded in proving that giving people money with no stipulations is not the way to actually improve their lives.

    4. They can’t conclude this as fact, but the evidence shows that giving them money is just as effective as trying to teach them about how to use their money. It clearly doesn’t work.

    If I found out that my hypothesis wasn’t immediately supported by my initial evidence, I would do one of two things. First, I would test my hypothesis again to see if the results differ. If that doesn’t work, I would have to change my hypothesis or find a new way to ask the same question.

    Like

    • davidbdale says:

      I like both of your approaches toward your own Hypothesis, Pop.
      I do have a question about your numbered answers:
      Can you reconcile Answer 1 and Answer 3? Or does proving that giving money alone does not improve child nutrition qualify as success?

      Like

  4. christianity19 says:

    Did the authors of the study Fail?

    No, the authors study did not fail because the question and the outcome was correct.

    Would proving that cash-equivalent grants were as beneficial as the education program have qualified as Success?

    No, because the experiment found that the program met none of its main objectives. Teaching Rwandans about nutrition did not improve their nutrition or health. Neither did giving Rwandans the cash equivalent of the cost of the education program — about $114.

    Or did the authors succeed by proving that simply handing recipients money without any stipulation was the wrong way to achieve a particular goal?

    Yes, because the authors did handle the recipients money that well and didn’t achieve the particular goal.

    Could the authors conclude that poor people really DON’T know “what to do with the money”?

    Yes, because poor people don’t really know what to do with the money because don’t use it on the right things.

    Like

    • davidbdale says:

      I don’t understand your answer to this question, C.
      [Or did the authors succeed by proving that simply handing recipients money without any stipulation was the wrong way to achieve a particular goal?]
      —Yes, because the authors did handle the recipients money that well and didn’t achieve the particular goal.

      And this one could be looked at another way.
      [Could the authors conclude that poor people really DON’T know “what to do with the money”?]
      —Yes, because poor people don’t really know what to do with the money because don’t use it on the right things.

      Maybe for families suffering large debts, the “right thing” is to pay off the creditors.

      Like

  5. honeysucklelilac says:
    1. The authors of the study were unable to prove their hypothesis, that is different than failing. They discovered that their original solution wasn’t going to work.
    2. Those who were a part of the education program weren’t any more likely to eat any healthier than those who were just given cash. It would have been a success if those given cash were more likely to eat healthier regardless if the grants were more beneficial than the education programs.
    3. The authors did succeed by proving that handing out cash grants without stipulation was the wrong way to achieve their goal.
    4. The authors can’t conclude that poor people don’t know what to do with money because those given the money used it in whatever way they thought was the most beneficial to them. Most of the poor people used it to pay down their debts, which to them might have been what the best use of the money was.
      If I had found out that my hypothesis cannot be supported by initial evidence, I would not change my hypothesis but instead think of a different conclusion to base my thesis off of. My thesis is the conclusion I draw based off of my initial hypothesis, after I have my research based on my hypothesis, it is no longer important.

    Like

  6. justheretopass says:

    1) No the authors didn’t fail. They just wanted to see what the people of the village would do if they had money.
    2) The cash grants were as beneficial as the education program because it allowed people to pay off their debts and take care of important things to them.
    3) No the author didn’t succeed by handing money without any stipulation was wrong. The people of the village took care of what was important to them.
    4) No the author can not conclude that poor people don’t know what to do with money. They know what to do with money they just unfortunately don’t have the money.

    Like

  7. compiistudent says:
    1. The authors of the study failed because the people in need didn’t see a use for better hygiene or nutrition, and didn’t know how to use a new influx of cash to help themselves out properly.
    2. No because there’s no guarentee that they would have used the money in produtive ways
    3. Yes, because those people had never had that much money in their lives, so when you just hand it to them with no questions asked, more likely than not, they won’t spend it productively
    4. Yes, essentially no idea how to spend it usefully

    Like

    • davidbdale says:

      On the basis of your conclusions, it appears the experiment was quite successful. It proved that handing money to the target recipients would not achieve the desired result. No need to try that again.

      Like

  8. johnwick66 says:

    1.Did the authors of the study Fail?
    Not exactly because the idea of the research was to see if the money could make an impact on the families it was given to. So to see that it didn’t necessarily work isn’t a failure but rather a step forward in their progress.

    2.Would proving that cash-equivalent grants were as beneficial as the education program have qualified as Success?
    To an extent yes, their idea was to see if the money could be as beneficial as the programs so to have them show signs of benefiting from this is very much a success.

    3.Or did the authors succeed by proving that simply handing recipients money without any stipulation was the wrong way to achieve a particular goal?
    Also to an extent yes, the point the author was going for was to see if it could work or not, not that it would. So with either result it could easily be used as an “success” for the author.

    4.Could the authors conclude that poor people really DON’T know “what to do with the money”?
    Perhaps he could with the groups that received the $114 since that was shown to have the some fail rate as the programs, however it was said that the families with $500 showed some success with there money, mainly using it to pay off debts. So the author could use it to say that poor people don’t know what to do with a little bit of money.

    Like

  9. carsonwentz1186 says:

    1.) I would not say so simply because the question they had asked in the hypothesis was “why not let them decide how best to spend it?” and the results showed that they spent the money given as a way to pay off debt which is how they decided to use the given money.
    2.) It would have qualified as success because the main objective of this experiment was to find out if giving Rwandans the money directly was the best way to efficiently operate the program.
    3.) In a way the did because the overall goal of this experiment was to more efficiently end malnutrition and the Rwandans ended up using the money on other things such as paying off their debts.
    4.) I don’t think they can as the people who were given money used it in ways that most benefitted them and they knew what they wanted to do with the money.

    Liked by 1 person

    • davidbdale says:

      I’m glad you recognize learning something new and important about the question at hand to be a success. It may be ALL we accomplish after a semester of research on a counterintuitive question. But it will be useful if we prove SOMETHING.

      Like

  10. icedcoffeeislife says:
    1. The study did not fail. The author found more information on the problem that was forming in the USAID. The study just did not go the way that the author thought it would.
    2. It would not be able to qualify because the educational problem was not going to succeed in the first place.
    3. The author did succeed by showing that handing out money with proper instruction was not the right way to handle the problem.
    4. No, because it was not the people’s fault that was getting the money. They were not told how they should use it. Thye used the money to help pay off the debts and feed their kids.

    Like

  11. mrmba1 says:

    Their study was to try to find out whether or not providing direct cash rather than teaching them through a program would help them feed their children better, and the researchers- specifically Daniel Handel- believed this would be the case. Although they somewhat succeeded in finding an answer (it seems like the study wasn’t completed, but the results so far prove their hypothesis wrong), it simply was not the answer they were hoping for.

    If my hypothesis was proven false, I would react more or less the same as if it was true. I’d be slightly more surprised, but either way I’d come out of the experience with more knowledge than I had going in, so I’d be happy with the results. It would be more disappointing to go through the process without a finding a conclusive answer than it would be to find new information that challenged my previous beliefs.

    Like

  12. christianity19 says:

    If my hypothesis doesn’t support the hypothesis then I’ll restate it or change it into a different way that I’ll like to say it.

    Like

  13. person345 says:
    1. The authors of the study did fail because the group of people that were given help by USAID faired no different than the group that did not receive help at all. Most people used the grants to pay off their debts. The standard of living was not improved.
    2. Cash grants and government education programs are not successful. Both would yield the same result.
    3. The authors succeeded in proving that granting money without any agreement would be useless. People wouldn’t try to improve their standard of living.
    4. The authors can’t conclude that poor people don’t know what to do with their money. To prove this, they would need to conduct more experiments and studies. One source of evidence isn’t enough to prove anything.

    If I found out that my hypothesis cannot be supported with the initial evidence, I would find more evidence or I would just pick another topic that can be supported with evidence.

    Like

    • davidbdale says:

      I’m with you most of the way here, Person. In particular, I admire your 3 and 4.

      But regarding your own Hypothesis, I hope you won’t abandon a Hypothesis if it doesn’t pan out the way you expected. You’ll be fox hunting or going down a rabbit hole, but be on the lookout for other prizes. You’ll learn something surprising. Share THAT with your readers.

      Like

  14. Metro111c says:

    The authors study did not fail it just proved that the best way to help the poor was the $500 loan. Even tho it doesn’t make a dramatic difference in the persons standard of living, it has a better benefit for them in the short term. Although I don’t believe either idea is better than the other actually I wish those people could get the cash loan and the educational program. Proving that cash grants were as helpful as the educational program would not be beneficial because the study was to see which works best so we could put all are efforts into that idea. The author could not conclude that poor people don’t know what to use their money for because they don’t know what they spent it on.

    I would respond to that by showing the long term evidence of my hypothesis and why it is a success.

    Like

  15. imgoingswimming says:

    1)The authors’ study did not fail as they were just testing the question they had. They found that they should not give these people the cash equivalent to the classes.

    2)If they proved that the money equivalent was as important then it would still not be useful because the classes were not successful at all at helping people.

    3)The authors succeeded because they found handing these people the money directly did not help them achieve their goal of educating these people about nutrition.

    4) Yes I would say this because they used their money on things that were much less important than proper nutrition.

    Like

    • davidbdale says:

      Logical work, Swimming.
      I do want to suggest that to the grant recipients, retiring debt might seem much more important than changing their children’s diets. (This is the group that got no nutrition education, right?)

      Like

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