By Obaid Khan, Humanitas Global
In the second half of the series, we turn our attention towards harmonization of the evidence generated from RCTs and anecdotal narratives to inform development policy and practice.
Adopting intellectual humility with respect to the external validity of interventions is imperative. For example, conditional cash transfers worked well for Progresa in Mexico for improving education outcomes, but the model had to be adapted to the Colombian context for similar effectiveness. In Udaipur, monitoring participation worked to improve attendance of teachers, but not for the health staff. The key takeaway is to utilize evidence from different settings that leads to adoption of adaptive and flexible approaches to inform development policy and practice in varying contexts.
Developmental efforts must be directed towards a synthesis of evidence and anecdotal narratives to ascertain how and why poor people, in different settings, make the decisions that they make. Economists, policy makers and practitioners can follow in the footsteps of Amartya Sen in ‘humanizing’ the field of development economics and keeping fair distance from abstract theoretical models that are out of touch with reality and human behavior.
RCTs, even at a small scale, can help guide evidence and context-based interventions and avoid the temptation of following a particular ideology. For example, a RCT for malarial bed-nets in western Kenya showed that purchase and usage of bed-nets varied considerably based on price but showed free provision of bed-nets was most effective in increasing uptake and usage. This behavioral response warrants a more pro-active longitudinal study that documents how the price elasticity of demand would change when the associated benefits of nets are realized. This can be particularly crucial to provide sustainable solutions in resource-constrained settings. In Kenya, ‘nudging’ was used as a commitment device for prompting farmers to make prepaid payments at the time of harvest, after receiving vouchers for fertilizer before planting. Timing the required payment after harvest, when farmers had money was the active ingredient to counter the problem of failed payments or a lack of money in the future. It must be noted that micro-level interventions can only take us so far, in terms of far-reaching impact. However, the subsequent evidence generated can help governments scale-up these interventions.
A substantial gap in discourse and practice still remains about answering the critical questions regarding government, institutions and local realities. In countries with weak institutions, there are many actors with conflicting interests who are vying for economic and political power. In such countries, the incumbent governments are more prone to corruption than implementing and scaling up evidence-based interventions. Moreover, local culture, religious and political realities are important in shaping the behaviors of population. Humans respond to economic incentives, but are also driven by their cultural, religious and political affiliations. These dimensions of institutional and behavioral realities are often not adequately addressed by academics or policy makers. Anecdotal narratives can help enrich the discourse in unlocking the paths of reasoning that culminate into individual and collective decisions.
Using RCTs and behavioral economics to determine what works in which situations is a feasible way forward in combating poverty. Despite frequent use of a one-size fits all approach to reducing poverty, a context-based approach is more effective and has the potential for large-scale poverty reduction. There is a need to amalgamate experiential learning to contextualize the quantitative findings, often used alone as evidence for interventions. Individual narratives should be viewed as complements to the broader policy directives that stem from the evidence.
