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. His initiative has since grown to encompass six experiments in four countries. He is currently overseeing these tests from a new position, senior adviser on aid effectiveness at a USAID research unit in Washington, D.C.
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 teams from the nutrition and hygiene program.
- Families in the third group were given small cash grants by GiveDirectly equivalent to the per-person cost of the nutrition and hygiene program, which ultimately averaged out at $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.
On Thursday, the government released the results of the first study in the series: An evaluation of a program to improve child and maternal health in Rwanda by teaching families about nutrition and hygiene.
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.
Discussion
- Did the authors of the study Fail?
- Would proving that cash-equivalent grants were as beneficial as the education program have qualified as Success?
- Or did the authors succeed by proving that simply handing recipients money without any stipulation was the wrong way to achieve a particular goal?
- Could the authors conclude that poor people really DON’T know “what to do with the money”?
Reply
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Heavily edited from an original story by NPR.
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Link to the original:
Which foreign aid programs work? The U.S. runs a test — but won’t talk about it
Counterintuitive Fall 2024 
The authors did not necessarily fail, they just did not receive the outcome they expected and still resulted in an outcome.
If the outcomes were to prove the authors right, many would consider it a success because their hypothesis would be proved.
The authors were successful, because their experiment was able to successfully interpreting how recipients handle their money, though it wasn’t expected, the outcome was still a new way that was proven.
Based off of this experiment alone, it could conclude that poor people do not know how to use their money, but there are also many other ways to additionally back up this statement to solidify it.
The authors of the study did not fail as there hypothesis was answered even though he was proved wrong. Proving cash-equivalent grants would not qualify as success compared to education program as the people spent the money on the incorrect things. Such as spend it on their own personal debt. The authors succeeded as they proved that simply handing recipients money without any stipulation was the wrong way to achieve a particular goal? The author could not make the assumption that “Poor people do not know what to do with money” as it depends on the discography of the participants of his give directly hypothesis.
1) Did the authors of the study Fail?
– No, the authors of the study did not fail if their goal was to investigate whether the nutrition and hygiene program was effective. While the program did not achieve its main objectives, the study provided valuable insights into its ineffectiveness, which can be seen as a successful outcome in terms of understanding what doesn’t work.
2) Would proving that cash-equivalent grants were as beneficial as the education program have qualified as Success?
– Yes, proving that cash-equivalent grants were as beneficial as the education program would have qualified as a success, as it would have demonstrated an alternative, potentially more cost-effective approach. However, even though the study didn’t prove this point, it still contributed to understanding the relative effectiveness of these interventions.
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?
– The authors succeeded in providing evidence that for the specific goal of improving nutrition and hygiene in this context, simply handing recipients money without any stipulation may have been a more effective approach than the structured education program. This doesn’t necessarily mean it’s the wrong way to achieve all goals but offers insights into the potential effectiveness of cash transfers in this specific context.
4) Could the authors conclude that poor people really DON’T know “what to do with the money”?
– The study’s results do not support the conclusion that poor people don’t know what to do with the money. Instead, they suggest that providing cash grants, especially larger and unrestricted ones, can have a positive impact. The study demonstrates that the hypothesis about the effectiveness of cash grants was not proven wrong but rather provided insights into how they can be effective in achieving certain goals.
The study didnt turn out as expected with the health tips or $114 but it did help out in different ways in their everyday way of living.
The authors succeeded. It wasn’t the outcome they hoped they would get but they did prove something. Proving that cash equivalent grants were as beneficial as the education would have qualified as a success. The authors did not prove that simply handing money without any stipulation was the wrong way to achieve a particular goal. The authors could conclude that poor people truly don’t now what to do with the money. I feel as though there are too many things they could use the money on so they don’t know how to prioritize the most important things if that make sense.
Did the authors of the study Fail? –
No, though they didn’t prove what they initially set out to, they proved something else throughout their study, therefore , making it successful.
Would proving that cash-equivalent grants were as beneficial as the education program have qualified as Success? –
Yes, if it were able to prove that they were equally benefitial, then it would have been something new discovered and therefore a success.
Or did the authors succeed by proving that simply handing recipients money without any stipulation was the wrong way to achieve a particular goal?-
No, just because the experiment failed doesn’t mean that there is a only one way to solve the problems and whether it fails or not doesn’t mean that it was not benefitial to solving the problem.
Could the authors conclude that poor people really DON’T know “what to do with the money”? – No, because they used their money in the way that they though would best benefit themselves and their families.
I don’t think that the authors necessarily failed. The results of the experiment weren’t what they hoped for, but they still got some type of data that either proves or disproves something. If they had proved that cash grants were as successful as training programs they provided, it would’ve been nice but it wouldn’t effect the success or failure of the experiment because at the end of the day, they did draw some type of conclusion. They could conclude with their results that poor people don’t know how to spend money or use money properly, but then again that would be subjective because not every poor person has bad financial habits.
The authors did not fail, they succeeded. Any kind of information proved by the experiment would be success because they shouldn’t be doing it for the ego they are doing it to help people. The people know what they need to do with the money but they have been in poverty for so long that they have other more pressing needs. So when given larger sums of money they have enough money to fix their house, pay debts and then feed themselves.
I don’t think the authors of the experiment failed just different results. When they gave one of the groups 500 dollars it was proven some poor people can be financially responsible. The program didn’t fail data was collected. Learned by the experiment poor people want money more than food. Being poor for so long food is not a priority more than getting off the street. Overall the authors did not fail just to gain knowledge about how to better help people in poverty.
The authors didn’t fail the program but they did succeed. As the experiment had proven that they shouldn’t be doing it just prove if their study was right or not. But the people in the program proved to them that the more money they get the more improvement they will see. (10/02)
1) The authors of the study did not fail. While the results were disappointing, their question of what the most effective way to help was was answered, and they can now make more informed decisions on what to do (or what not to do) in the future.
2) Yes. Their questions would have been answered and could give them a new perspective on how they should be running their program.
3) Proving something wrong would have no effect on if the experiment was a success, even if whatever you proved wrong supported your hypothesis. Proving something wrong would only get them closer to their goal.
4) They could not. Considering that the lives of those who received $500 were improved, you could not conclude that Rwandan’s do not know how to spend money.
1. The authors hypothesis and experiment failed. That does not mean the whole project was a failure. The places where they failed, created a new and different hypothesis.
2. I would say yes. If the organization helped people there in any way, that’s a success.
3. I do not agree with number three’s statement.
4. No, because when given $500 the people and children were better off. I think the amount of $144 was not a big enough amount to make substantial impact.
1-The author’s study did not fail, but was proved wrong.
2-Proving cash-equivalent grants are as beneficial as education programs would qualify as a success by demonstrating a different affordable approach for those who didn’t receive benefits.
3-The authors did succeed by proving the effectiveness of cash transfers, by simply handing recipients money.
4-The authors cannot conclude that poor people don’t know what to do with money, rather they can conclude the positive impacts and effectiveness of cash grants with poor people.
1) Did the authors of the study Fail?
The author’s study did not fail but the program did.
2) Would proving that cash-equivalent grants were as beneficial as the education program have qualified as Success?
Yes, the cash-equivalent grants were as beneficial as the education program if not more than the program. Although they were not beneficial as as each other, it still is important and relevant to the study.
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?
No, because even though the experiment failed does not mean that this was the only way to fix the problem.
4) Could the authors conclude that poor people really DON’T know “what to do with the money”?
The author is unable to conclude that poor people don’t really know what to do with their money because they are able to choose what they do with the money. The families were able to choose what they thought was the best thing to spend their money on.
The authors of the study did not fail since they still were able to help the people in the long run and eventually got them the amount of money they needed. They were able to prove that although an educational program is helpful, cash is also helpful since not every family needs an education on certain issues to fix their problems. While they did not achieve a particular goal, they were able to learn that it is helpful to give money considering not everyone has the same situation. They authors cannot conclude that poor people do not know what to do with the money, considering each person will spend the money as they see fit.
The authors of the study did not fail, they proved that neither giving nutritional training or the cash equivalent improved the health of Rwandans. It wasn’t until a larger cash grant was given until the nutritional health improve. Proving cash grants were just as effective as the training would be a success because you found another way to support the Rwandans and arguably a faster way. The authors could not conclude that the poor people do not know what to do with the money because they don’t know how far in the “hole” they are and how much money they would require to get out of it.
The authors did not fail in the study because they received results. They did fail in prior years with helping the people restore nutrition because providing training caused no change in their health.
Providing cash-equivalent grants was not beneficial to improve their nutrition because they would use it on other things like debt, so also no success.
The authors did succeed by handing the recipients $500 because they didn’t have to choose whether to fix other problems or their nutrition.
I don’t think that the authors could conclude that poor people don’t know what to do with money because they just rank their problems by most importance to them. If they thought fixing their nutrition was more important than paying their debt, they would use the money on food and not the debt.
I do not believe that the authors of the study necessarily failed we have been taught that as long as your experiment gets results it is a successful experiment. However the optimism about giving the people funds no questions asked did not go the way they expected. They succeeded by proving that you can’t just hand people money and expect them to do what we think is appropriate. Given that you never really know someones situation until you’re in their shoes I don’t think the authors can just flat out say that poor people don’t know what to do with their money.
Did the authors of the study Fail? yes and no. $114 failed to help the children, but a greater sum of $500 did make a difference.
Would proving that cash-equivalent grants were as beneficial as the education program have qualified as Success? sure
Or did the authors succeed by proving that simply handing recipients money without any stipulation was the wrong way to achieve a particular goal? they succeeded in the way that they found something out.
Could the authors conclude that poor people really DON’T know “what to do with the money”? the authors could make any conclusion they wanted. but it wouldn’t be accurate. it did seem to prove that $114 is not enough to positively impact Rwandan children.
1) Did the authors of the study Fail?
No, they tested a hypothesis and got a result.
2) Would proving that cash-equivalent grants were as beneficial as the education program have qualified as Success?
Yes, because we are trying to find something new as to prove 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? No, they did not fail just because it didn’t work, this still gave them results
4) Could the authors conclude that poor people really DON’T know “what to do with the money”? No, as it did not help them the first time, this does not mean it may not help later on as they learn what to do.