Ted Miguel and Michael Kremer cast a jaundiced eye on the idea of "financial sustainability" in a development context, as they write:
Posted by DeLong at March 26, 2004 04:46 PM | TrackBack | | Other weblogs commenting on this postThe Illusion of Sustainability: While sustainability is certainly a desirable goal, it may be difficult to achieve. Teaching people to fish rather than providing fish is great if it works, but this method works only if the donor knows more about fishing in the local area than the people who live there, and only if the donor can transfer this knowledge. Yet it is difficult for outsiders to understand how institutions, politics and societies function, let alone how to influence them in a way that does not create unforeseen consequences. Even if a hypothetical planner could target foreign assistance so as to change communities and institutions for the better, the principal-agent problems involved in foreign assistance make it hard to do this in practice. It is difficult enough to monitor aid workers handing out fish, since they are not subject to market pressures, nor held democratically accountable to the people who they are charged with serving. However, at least one can determine whether fish have reached the intended recipients, and presume that if so, the recipients are better off. In contrast, it is much more difficult to determine whether training sessions for leaders of non-governmental organizations (NGOs) working with the local fishermen have in fact made anyone better off. Foreign aid workers may provide encouraging anecdotes, but given their incentive to select among anecdotes, it is difficult to know whether donors would have been better off simply handing out fish.
In this paper we try to bring systematic empirical evidence to bear on the impact of organizing foreign assistance around this idea of sustainability. We present evidence on the issue within the context of a public health project designed to reduce intestinal worm infections among Kenyan school children. Intestinal worms infect one in four people worldwide. Worm infections can be fought in several different ways. One approach emphasizes periodic medical treatment with low-cost drugs. However, people soon become reinfected, so treatment must continue twice per year indefinitely. Utzinger et al. (2003) argue in the Lancet that rather than focusing narrowly on drugs, a broader approach with greater emphasis on health education, latrine construction, and water provision would be more sustainable. Other potential ways to make anti-worm programs sustainable include requiring cost-sharing payments from those taking drugs and encouraging local "ownership" of deworming projects.
This paper uses a random assignment methodology to obtain empirical evidence on a number of approaches for fighting worms. In prior work, Miguel and Kremer (2004) found that providing deworming drugs reduced school absenteeism by approximately one-quarter, or seven percentage points, and led to significant gains in several measures of health status, including worm infection, child growth stunting, anemia, and self-reported health (although there were no significant academic or cognitive test score gains). Moreover, providing free deworming drugs significantly reduced worm infection and increased school participation among untreated children in the treatment schools, and among children in neighboring primary schools. Traditional public finance analysis would support providing deworming medicine, since three quarters of the benefit is in the form of externalities (Miguel and Kremer 2004) and since deworming costs only $3.50 per extra year of school participation generated, making it one of the most cost-effective ways we know of to boost school participation.
However, it seems worth exploring alternatives to subsidizing treatment over the long-run. The introduction of a small fee led to a sharp 80 percent reduction in treatment rates relative to free treatment. Intensive school health education had no impact on child worm prevention behaviors, and thus child health is likely to be worsened to the extent funds are diverted from medical treatment into health education in this setting. A verbal commitment "mobilization" intervention -- which asked people to commit in advance to adopt the deworming drugs, taking advantage of a finding from social psychology that individuals strive for consistency in their statements and their actions -- had no impact on treatment rates. A non-experimental analysis suggests that household latrine construction and local borehole well density are both far less cost-effective than deworming drugs in reducing the rate of worm infection.
Well, if the task were as impossible as the Anti-Worm guys might have us believe, Norman Borlaug's high yield agricultural revolution never could have succeeded.
Posted by: Anarchus on March 26, 2004 05:45 PMI hope these guys are not getting a grant from the pharmaceutical industry...
Posted by: non economist on March 26, 2004 08:44 PMThis isn't a good example, Brad. A fish is a far cry from a pharmaceutical drug. Locales can be convinced into fishing for themselves relatively easily. Building and sustaining a social infrastructure to produce modern drugs is probably something their society can't support. In that case, when "fishing" is not possible then it really is more humane and feasible to just hand them out.
Posted by: Oldman on March 27, 2004 04:35 AMIt is a good example. It says get things in the right order. Simply pay the interest on not dealing with problems which, emprically, should wait for later. Get the kids in school, free of debilitating disease and the society used to being healthy and educated, and they will then be better and better able to prioritize for themselves what needs to be done, and do it.
That is always the key to sustainability - creating a local polity capable of dealing with the challenges it faces. When aiding development, triaging of problems is essential to produce sustainability. The authors have it right: don't beat at the branches, strike at the root.
Posted by: Stirling Newberry on March 27, 2004 04:50 AMOldman: I don't think I see your point -- does this example have anything to do with fish? I think the lesson is something vaguely like a theory of 2nd best. Particularly, that evaluating social welfare for an outsider (even by a "do-gooder"), at least as measured by a variable such as worm infection is no easier than dictating social preferences by someone's choice. The following conclusion is interesting, since it illustrates the "non-well posedness" of social welfare problems: "The introduction of a small fee led to a sharp 80 percent reduction in treatment rates relative to free treatment" This should be a cautionary tale for those who have illusions about the possible benevolent outcomes of intervention in affecting social welfare abroad.
Posted by: CSTAR on March 27, 2004 06:35 AMThis stuff needs to be married to Lazardfeld's work on new seed adoption, from the 1930's. Of course just telling people to build latrines doesn't work. Telling people how to do any good thing doesn't work, and this has been known in depth since the beginning of the New Deal's Agricultural Extension Service, which inter alia underwrote Lazardfeld's research.
What works in directed innovation is the underwriting of "early adopters," the personality types who like to try out new stuff. (This, incidentally, is one thing Borlaug knew very well, because, thanks to the Extension Service, it's well understood in the agricultural community.)
It may be an open question whether there is such a thing as open adopter villages or open adopter cultures, e.g. tribes -- but I'd be willing to bet the answer's yes. Take, for instance, the way the Dinka under British rule would sneak kids into schools on the Nuer list once their own quotas were filled.
What you do is find the early adopter villages and set them up with the latrines and the antiseptic flip-flops or whatever, and let things go from there.
This might, of course, be considered cultural genocide. Right. We're trying to stamp out ignorance, stupidity, and sullen depressed self-destruction as cultural entities on this planet.
Glad to see someone remembers the New Deal Agriculture.
The chain is Adopters -> Enthusiasts -> Influentials.
Posted by: Stirling Newberry on March 27, 2004 12:42 PMHistorically, in western society, the "early adopters" have become wealthy peasants who relentlessly squeeze the poorer peasants, a problem "solved" by emigration of newly impoverished peasants. The strength of this experience is illustrated by the late-20th century depopulation of American rural areas.
As pleasant (and self-congratulatory) as it may be to talk about teaching people to fish, or adopters influencing 'influentials', there is no long-term evidence that these vapid concepts have improved most people's lives.
"Give a man a fish and you feed him for a day; teach a man to fish and you can destroy an entire eco-system."
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Summam scrutemur - Let's look at the bottom line
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