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An Anti-Poverty Program That Really Works

A new study finds that aid and training do the trick.
A shepherd in Ethiopia. (Photo: Rod Waddington/Flickr)

A shepherd in Ethiopia. (Photo: Rod Waddington/Flickr)

There's an old proverb about teaching a man to fish. It's a nice notion, but maybe the true answer to poverty requires a little bit of everything: Teaching people how to fish, giving them fishing nets, and giving them the fish too.

That's the answer from a newly published study on the efficacy of a program called Graduation, aimed at lifting the world's poorest families out of poverty. Graduation is expensive, costing between $3,000 to $6,000 per household, depending on the country. But in five out of the six countries the researchers studied, Graduation provided a slight positive return on investment because households in those countries ended up consuming more—thus paying more money into their local economies—than it cost to aid them. When offered the opportunity, all families except about half of those in India chose to join Graduation, even though it requires check-ins with program officials for two years. The fact that the program worked in so many different nations is promising, as it could be a model for others.

The study, run by an international team of economists, included 10,495 households in Ethiopia, Ghana, Honduras, India, Pakistan, and Peru. Almost half of the families in the study lived on less than $1.25 a day.

Maybe the true answer to poverty requires a little bit of everything: Teaching people how to fish, giving them fishing nets, and giving them the fish too.

The specifics of Graduation varied by country, but the basic premise was the same. All the Graduation programs gave families some kind of "productive asset," such as sheep, goats, seed corn, bees, or small shops. They all provided training on how to build a business using the assets, and gave food or cash aid to the families for up to a year, in part to discourage them from eating or selling their "productive asset." The programs also gave families access to a savings account, and some programs required that families contributed to the account regularly.

One year after the program ended, researchers found that Graduation families bought more, owned more, spent more time working, were more politically active, and missed fewer meals than similar families who hadn't enrolled in the program. The changes were all statistically significant, but, the researchers note, not very large.

The exception was Honduras, where families didn't consume more one year after the end of Graduation (though they did immediately after the program ended). The driving factor there was likely that most Hondurans chose chickens as their productive asset, and most of the chickens died of illness a year after Graduation finished, the researchers write in their paper, published today in the journal Science.

Now, research must be conducted on how long these effects last. It's encouraging that they've endured for a year, but researchers will surely want to keep tracking Graduation families over longer periods of time. Meanwhile, agencies aren't waiting for more research. Officials are expanding Graduation programs in India and Pakistan, and Ethiopia plans to integrate Graduation into its national public safety net.

Quick Studies is an award-winning series that sheds light on new research and discoveries that change the way we look at the world.