Innovations for Poverty Action

2013 Annual Report

Dear Friends,

In 2013 IPA celebrated ten years of producing high-quality evidence about what works, and what does not work, to improve the lives of the poor. It was a year of celebration for our accomplishments. More so, it was a time to prepare our organization for the next phase as we continue to pursue our vision of a world with More Evidence and Less Poverty.

To date, we have designed and evaluated more than 200 potential solutions to poverty problems using the most rigorous evaluation methods available. We have over 235 more evaluations in progress, and we have mobilized decisionmakers to use the evidence to improve opportunities for the poor. Our evidence has already influenced policy and practice through multiple channels:

IPA partners change their approach based on study results. Results from an IPA fingerprinting study in Malawi have led to the creation of countrywide credit bureaus which will create a fingerprinting database to reduce bank default risk.

IPA influences global debates. IPA findings showing that cash transfers to the poor need not be conditional in order to make a difference are stimulating discussion about one of the central aspects of most national transfer programs.

IPA helps create a culture of evidence-based decisionmaking. IPA and our partners at the Jameel Latif Poverty Action Lab at MIT supported the launch of the Quipu Commission in Peru to convene government ministries and researchers to identify key issues that can drive better policies.

NGOs, governments, and corporations use IPA’s evidence to guide program design. The mobile telecom company Millicom/TIGO is working with IPA on a mobile savings product in response to our work on commitment savings.

In the next five years, we will build on what we have achieved and leverage what makes us unique to address the next challenges of fighting poverty.

We will focus our future growth on a global portfolio of country programs located in places where we have developed relationships and offices staffed by experienced personnel.

We will expand our research network internationally and locally and strengthen our research quality through expanded oversight and advanced data collection and data reporting tools.

We will mobilize decisionmakers to implement better, evidence-based, programs and policies by creating long-term local partnerships and working with decisionmakers to identify key questions in focus sectors. Where we have evidence of programs that work, we will demonstrate how those ideas operate in different contexts and at scale.

What we have achieved already and where we hope to go is only possible through the ongoing support of our funders, donors, and partner organizations. Thank you for all you have done for us. We hope you will join us in this next phase of our journey.

Sincerely,

Annie Duflo
Executive Director

Dean Karlan
President & Founder
Professor of Economics, Yale University

Our Work

235
active projects
200
completed projects
250
leading academics
400
partner organizations

Test & Act

We’re testing 235 ideas, here’s how

An IPA study starts with an important problem that affects the lives of the poor and does not yet have an effective solution. Starting with that problem, we collaborate with partners in government, the private sector, and the nonprofit world to identify or develop a potential solution. We then evaluate the solution by carefully testing it with real people in real-life situations and assess its impact through randomized evaluations.

Once we have evidence of impact, we move on to promote the use of the evidence-based programs or policies, often by refining the solution together with decisionmakers and asking more questions of how things work best at scale for the least amount of money—leading to improved opportunities for millions living in poverty.

Can fingerprinting reduce risky borrowing?
Here we illustrate our process with an example project we did in Malawi to test the effects of fingerprinting on default rates of risky borrowers.

More Evidence

Does Knowledge Change Who Comes to Power?

sierra-leone-elections

In Sierra Leone, only 28 percent of voters can name the parliamentary candidates in their district, and only 17 percent know those candidates’ positions on key issues. This lack of knowledge about politics led IPA and partner Search for Common Ground (SFCG) to ask whether providing information about candidates would lead to more informed voting. We identified 28 jurisdictions with closely-contested 2012 parliamentary elections, and randomly selected half of them to receive candidate debate screenings from SFCG. Overall, 114 polling centers in 14 jurisdictions showed filmed debates to constituents.

Survey data collected at both participating and non-participating polling centers show that screening filmed debates roughly doubles the percentage of voters who can articulate what a particular candidate’s platform issue is; voters in districts that had screenings were also 80 percent more likely to know a candidate’s position on free healthcare, an important issue of the election. Interestingly, candidates spent more money and time campaigning in screening villages. These results show that filmed debates make a difference in how voters cast their ballots, and they are an effective tool for transferring political information.

In the 40 additional polling centers assigned to receive individually delivered information, participants were allocated to one of the following groups:

Encouraging the Poor to Migrate

Farm families in northern Bangladesh rarely earn enough from selling crops to support themselves for the whole year. Many continue to reside in rural areas during the “hungry season” between planting and harvest, even though income earning opportunities are available in nearby towns. To understand why and to encourage seasonal migration, IPA ran an evaluation to test different approaches. Participants were randomly selected to either receive information about the benefits of migration or to receive information and $11.50 in cash—roughly the cost of travel and a couple days of food.

The results show that offering cash encouraged a quarter of all households to send a seasonal migrant. Those families experienced less hunger at a cost far less than what the government pays per family in food subsidies. Even more promising is the longer-term impact: the farmers received the incentive only once, and have continued to migrate for three more years without the extra nudge. Information alone did little to change migration patterns, suggesting that monetary risk is the real constraint to migration.

Learning Math with Songs & Games

Over half of Paraguayan third-graders lack the math skills they need to pass grade-level tests. Girls, poor children, rural communities, and Guaraní speakers are particularly affected. Educators believe the problem starts in preschool where kids are not learning the “pre-math” concepts that prepare them for more complex work. To address this problem, the Paraguayan government decided to adapt the Big Math for Little Kids math curriculum developed by a team of US education scholars. The program employs songs and games to teach math concepts, and delivers lessons via CD to work around gaps in teacher knowledge.

IPA evaluated the impact of the program over five months in 265 schools in the Cordillera region in Paraguay—half of the schools were randomly selected to run the program. Results show children in Big Math schools improved their math skills over the five months of the program as much as other accepted education programs do, in less time. Encouragingly, schools that were worse off to begin with saw greater average improvements from the program, though boys overall improved more than girls. IPA is now running a second year of the evaluation to learn more about how it works and how we can use what we learn to design education programs that help everyone.

Give Cash, Reduce Poverty

Will giving money directly to the poor reduce poverty? That question was the catalyst behind the evaluation of a cash transfer program run by GiveDirectly, a nonprofit that gives unconditional cash transfers to poor households. Unconditional transfers come with no strings attached—recipients can spend the money as they like. In contrast, most transfer programs are limited to in-kind goods, as with food stamps, or they are only given if recipients fulfill certain requirements, like sending children to school. Researchers wanted to know if poor families actually need these conditions to encourage positive choices and worked with GiveDirectly to measure the impact of unconditional transfers on a randomly-selected group of poor families in Kenya.

The segmented group was further segmented to test the impacts of different amounts of money, and whether one lump sum vs. multiple smaller payments made a difference to outcomes.Results show that recipient families saw a 58 percent increase in assets compared to the control. Livestock farmers saw 48 percent higher profits, and small business owners saw a 38 percent increase in profits. Transfer recipients were also less likely to go hungry, and they reported less stress and greater overall happiness. The amount of money and its timing affected what people spent the money on, but simply receiving cash led to positive outcomes either way.

Better Programs & Policies

Collaborating with Policymakers in Peru

IPA has learned that working with governments and policymakers from the start, to both ensure our work focuses on the problems they most want to solve and to share the evidence we already have, is the fastest way to Better Programs & Policies. IPA formed the Quipu Commission in Peru in 2012 for this purpose. In cooperation with the Abdul Latif Jameel Poverty Action Lab (J-PAL), Peru’s Ministry of Economics and Finance (MEF), and the Ministry of Development and Social Inclusion (MIDIS), the Quipu Commission convenes government representatives and development researchers. The commission has held two annual meetings, resulting in sixteen program proposals, seven of which have progressed past the proposal stage.

Below, we offer an example of a project that was developed through the Quipu Commission, and has since been funded for implementation through IPA’s Global Financial Inclusion Initiative.

Expanding the Impacts of Conditional Cash Transfers

Problem
Sixty-seven percent of the Peruvian government’s conditional cash transfer beneficiaries receive their payment through a savings account set up at the state Banco de la Nación, but most of them withdraw the money all at once. Given that the average recipient in the country must travel five hours and spend 10 percent of the payment to get to the nearest bank branch or ATM, researchers speculate that the high costs of access, in combination with a lack of trust in the banking system and confidence in their ability to interact with new technologies, may be a barrier to savings.

Solution
Researchers designed a branchless banking program that aimed to give cash transfer recipients easy, convenient access to their funds, and information on the benefits of saving. Banco de la Nación, together with JUNTOS, the cash transfer program, the Instituto de Estudios Peruanos, and IPA, is implementing the program by establishing banking “agents” in districts where JUNTOS recipients live, but which have no bank branches. The agents are located in local municipal buildings and in shops; personnel are trained by the bank to accept deposits, dispense payments, and make transfers. The program includes a “trust intervention” workshop that teaches beneficiaries about the reliability of the bank and provides interactive activities for them to be empowered and become familiar with the use of new technologies.

Evaluate
To test the program, researchers selected 59 districts where JUNTOS beneficiaries live, but where there are no bank locations or ATMs. Thirty of them were randomly selected as “treatment” locations where Banco de la Nación is establishing agents. A sub-set of those 30 districts will also receive some financial education on the benefits of saving and another will be exposed to messages designed to build trust in the formal financial system. The final 29 districts will act as the comparison group, with no agents, education, or advocacy messages.

Impact
Peruvian policymakers and IPA share the goal of helping the poor save more. To achieve that, we are all seeking evidence on the feasibility of using branchless banking agents to deliver cash transfers nationally, as well as into the effect that financial education has on savings behavior.

Locking Away Savings with Mobile Phones

It is no secret that mobile financial products are generating a huge amount of interest. IPA’s leading research on commitment savings has also increased awareness among practitioners of the ways that product design affects customer take-up and usage. These factors together compelled an executive from Rwandan mobile telecommunications provider TIGO to approach one of our researchers at IPA’s Evidence on Innovations in Savings and Payments conference in Uganda in June 2013 to propose a collaboration. TIGO had a mobile commitment savings program called Cash Bloqué and wanted help from IPA to design a marketing campaign and measure how different marketing approaches affect take-up. Cash Bloqué allows users to lock away a portion of their money and send it to themselves at some designated time in the future.

TIGO is now launching Cash Bloqué in Rwanda by randomizing the marketing message sent to customers. IPA is testing not only the marketing effects, but also the impact of the program on user savings and consumption. Though we do not yet know how well Cash Bloqué encourages savings among low-income households, its origins show how communicating our findings and convening people with like interests allows us to create the relationships necessary to test promising innovations.

How Can Farmers Be More Profitable?

In 2013, we launched a new evaluation to test whether pairing rainfall-index insurance with agricultural inputs, such as enhanced seeds or agricultural extension training, increases profits for smallholder farmers in Northern Ghana. Named DIRTS (Disseminating Innovative Resources and Technologies to Smallholders), the project is a continuation of the work that IPA began in 2009 when we set out to understand why smallholder farmers in Ghana underinvest in their land. Was it because they didn’t have the capital to buy fertilizer or enhanced seeds, or because they were afraid of losing their investment in the event of bad weather?

It turns out that rainfall-index insurance increased the amount that farmers invested in their crops because they were in fact afraid of losing their investment due to bad weather. However, it did not bring higher profits and their returns per unit invested remained the same. The DIRTS initiative seeks to understand why farmers are not able to make their businesses more profitable. With this work, we hope to identify effective programs and approaches that not only encourage farmers to make positive investments, but also ensure those investments translate into higher incomes, better nutrition, more savings, and other measures of improved wellbeing.

Media Highlights

IPA has succeeded in bringing complex issues in aid and development to the forefront of global development media coverage.

The Guardian

Our People

Board of Directors

Dean Karlan
President and Founder of IPA
Professor of Economics at Yale University

Gregory M. Fischer
Co-Program Director in Finance,
International Growth Centre and Lecturer in Economics at London School of Economics

Joseph (Jerry) McConnell
Retired Partner of Goldman Sachs
Investor and Vice-Chairman, Hudson Green Energy

Paras Mehta
Principal of Black Canyon Capital

Jodi Nelson
Director of Strategy, Measurement & Evaluation
at the Bill & Melinda Gates Foundation

James J. Prescott
Assistant Professor of Law at
University of Michigan Law School

Russell Siegelman
Lecturer, Stanford Graduate School of Business
Partner Emeritus at Kleiner Perkins Caufield & Byers

Stephen Toben
President of the Flora Family Foundation

Kentaro Toyama
Professional Researcher at University of California,
Berkeley’s School of Information

Senior Management Team

Annie Duflo
Executive Director

Vivian Brady-Jones
Chief Financial Officer

Sarah de Tournemire
Senior Director of Communications & Development

Cepeda Johnson
Senior Director of Global Human Resources

Jessica Kiessel
Chief Program Officer

Thoai Ngo
Senior Director of Research Methods & Knowledge Management

Ife Osaga-Ondondo
General Counsel

Programs

Prathap Kasina
Associate Program Director, Asia

Doug Parkerson
Programs Director, East Africa & Latin America

Pace Phillips
Associate Program Director, West Africa

Sector & Thematic

Aishwarya Ratan
Global Financial Inclusion Director

Lucia Sanchez
Small & Medium Enterprises Director

Faith McCollister
Post Conflict Recovery Director

Julia Brown
US Household Finance Manager

Nathanael Goldberg
Social Protection Director

Country Programs

Shoraez Shahjahan
Bangladesh Country Director

Sebastián Chaskel
Colombia Country Representative

Nicoló Tomaselli
Francophone West Africa Country Representative

Loïc Watine
Ghana Country Director

Suleiman Asman
Kenya Country Director

Thomas Chataghalala Munthali
Malawi Country Director

Adam Kemmis Betty
Peru Country Director

Nassereena Sampaco-Baddiri
Philippines Country Director

Kris Cox
Rwanda Country Director

Andrew Tedesco
Sierra Leone Country Director

Daniele Ressler
Uganda Deputy Country Director

Rachna Chowdhuri
Zambia Country Director

Finances

Funders

Advocates Coalition for Development and Environment (ACODE)
Aspen Network of Development Entrepreneurs (ANDE)/The Aspen Institute
Asian Development Bank (ADB)
Bavaria Foundation
Bill & Melinda Gates Foundation
Central European University
Centre for Economic Policy Research (CEPR)
Children’s Investment Fund Foundation (CIFF)
Church Without Walls
Citi Foundation
Community Foundation for the Greater Capital Region
CREDO
D.W. Gore Family Foundation
Danem Foundation
Douglas B. Marshall, Jr. Family Foundation
FHI 360
Ford Foundation
Government of Sierra Leone
Grameen Foundation
GRM International
Harvard University

Henry E. Niles Foundation
Horace W. Goldsmith Foundation
Institute for the Study of Labor (IZA)
Instituto Ambiental Brasil Sustentável (IABS)
Inter-American Development Bank (IADB)
International Food Policy Research Institute (IFPRI)
International Initiative for Impact Evaluation (3ie)
International Labour Organization
Jacobs Foundation
John Templeton Foundation
Legatum Global Development
Liberty Foundation (Stichting Liberty)
Massachusetts Institute of Technology
Swedish International Development Cooperation Agency (SIDA)
Michael and Susan Dell Foundation
Millennium Challenge Corporation (MCC)
Namati
National Bureau of Economic Research (NBER)
Nike Foundation
Organizacion de Estados Iberoamericanos
Oxfam America
The Robertson Foundation

Rockdale Foundation
Soluciones Empresariales contra la Pobreza (SEP)
Stanford University
The Center for Financial Services Innovation (CFSI)
The Consumer Financial Protection Bureau (CFPB)
The END Fund
The International Growth Centre (IGC)
The Mulago Foundation
The William and Flora Hewlett Foundation
Theodore Cross Family Charitable Foundation
Three Guineas Fund
Tides Foundation
Twaweza Initiative of Hivos Tanzania
U.K. Department for International Development (DFID)
UBS Optimus Foundation
United Nations Children’s Fund (UNICEF)
United States Agency for International Development (USAID)
Universitat Pompeu Fabra
University of California, Berkeley
University of Warwick
Windhorse Capital Management, LLC
World Bank
Yale University
Youth Business International

Donors

$100,000+
Anonymous
The Campbell Family Fund

$50,000–$99,999
The Hallett Family Charitable Fund
Russell & Elizabeth Siegelman
Sam Taylor

$25,000–$49,999
Anonymous
Benjamin S. Appen & Leslie Chang
Franco Baseggio & Rebecca Sokolovsky
Amit J. & Vicky L. Patel Foundation
The Roll Family Fund

$10,000–$24,999
Anonymous
Trey Beck
Lingfeng & Ronald Cheng
Cedomir Crnkovic & Valerie Rubsamen
Peter & Natalie Gruenstein
Latika & Rajiv Jain
Dean & Cindy Karlan
Vijay Karunamurthy
Thomas Keck
Alfred Lewis
Iain Proctor
Timothy Schroeder
Darshana Shanbhag & Dilip Wagle
Eric Joseph Uhrhane
Ka-Ping Yee

$5,000 – $9,999
Joe Arcidicono
Zafer Barutcuoglu
Anthony Burch
Rosalind Chow & Jeff Galak
Sally & Tom Corbett
The Elaine & Tim Fitzgibbons Charitable Fund
Jonathan Greenfield
Brian Hawkins
Grimm-Huang Charitable Fund
David House
Miles and G. Elizabeth Lasater Fund
The LeRoux Family Charitable Fund
Christopher Lesniewski-Laas & Jennifer Tu
Betty L. West Mending Fund of Tides Foundation
Stephen Newbold
Robert On

Peterson-Tsai Fund
David Rademeyer
Neela Saldanha
Mason Smith
Paul von Hippel
Robert Walker II
Thomas West

$2,500–$4,999
Amena Al Nowais
Saleema Amershi
Jeremy Aron-Dine
John Benninghoff
Ben Blumenfeld & Jocelyn Ross
Elisa & Vincent de Martel
Duane & Subarna Hamid Eisaman
Jan Elizabeth
Noam Fischhoff
Carl Glaeser
Michael Hamburg
Michael Handelman
James Hudspeth
Hundt Famly
Charitable Fund
David Joerg
Loren & Beata Giving Fund
Paras Mehta
Roshni Raghavan
Ramsey Family Fund
Sanjey Sivanesan
Kristopher Zyp

$1,000–$2,499
Anonymous (4)
Daniel Ahkiam
Yousif Ali
The Jennifer Gerarda Brown and Ian Ayres Family Charitable Fund
Joshua Ball
Margaret Barusch
Oren Bassik
Sarabjit Baveja
Naveen Bemby
Richard Berkowitz
Alexandra Berlina
Emily Bobrow
Gregory Brazeal
Ana Chen
Robert Choo
Gena & Laurent Claudel
Allan & Joyce

Cohen Family Fund
Jemaleddin Cole
John Coyne
Joel Cretan
Daniel Culley
Michael Day
Narendra &
Sudha Desai
Glenn DeWitt
Michael Dorigan
Steven Doubilet
Andrea Drimmer
Robert Duckles
Joseph Fata
Samuel Febbraio, Jr.
Douglas Gentile
Andrew Gilmour
Timothy Graf
Jerry Grandage
Jason Green-Lowe
Leslie Gross
Paul Gruenwald
Steven Hakusa
John Hardwig
Matthew Harmon
Thomas Harris
Richard Harry
Gil Hertshten
William Higgins
Kellie Hobbs
Patrick Holland
Elizabeth Holmes
Robert Homer
Allison Jones
Michael Kim
Erhard Kraemer
Stefan Krasowski
Brendan Lee
Kathleen Lisson
Angela Lusk
Heather & Michael C. Mayes
Kurt Meierdierks
Adele Mendelson
Thomas R. Michaud
Talia Milgrom-Elcott
Michael Morton
Mark Mummy
Brent Neiman
Jodi Nelson
Perl Nelson Family Fund

Bryan Norwood
Naomi O’Leary
Tammy Oler
Elizabeth Opila
Catherine F. Parker
Kevin Parks
William Pennie
The Pfleger Family Philanthrophic Fund
Boon Keong Poh
Robert Poor
Sanda Putnam
Sean Ramsay
Michael Rierson
Annukka Huttunen Rittenberg
James Rogers
Nicolas Rojas
Alex & Lauren Rolfe
Polly Rosenthal Gift Fund
Drew Rosielle
Emilie Roth
Sajama Sajama
Tamara Sanderson
Michael Schiavoni
Lauren Schmidt
Elizabeth K. Schodek
Noah Segal
Stephen Senna
Hamada Shather
Mark Sherstinsky
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Paul Stansifer
Regina & Thomas Stonebraker
Peter & Joanna Strauss Family Fund
Isabel Tecu
Stephen Toben
Jeffrey Tolliver
Kentaro Toyama & Jasmit Kaur
Justin Truman
Shashwat Udit
Ila Varma
Quynhnhu Vu
Tatjana Walter
Daniel Weltman
Peter & Ruth Ann Gourley
Mary Wootters
Eric Yeargan
Zaitlin-Nienberg Family Fund

Project Researchers

Can fingerprinting reduce risky borrowing?
“Borrower Responses to Fingerprinting for Loan Enforcement in Malawi” Xavier Gine, Jessica Goldberg, Dean Yang

Does Knowledge Change Who Comes to Power?
“Impact of Voter Knowledge Initiatives in Sierra Leone” Kelly Bidwell, Katherine Casey, Rachel Glennerster
Photo: Glenna Gordon

Encouraging the Poor to Migrate
“Under-investment in a Profitable Technology: The Case of Seasonal Migration in Bangladesh” Gharad Bryan, Shyamal Chowdhury, Mushfiq Mobarak

Learning Math with Songs & Games
“Big Math” Diether Beuerman, Paul Neira, Susan Parker
Photo: Juan Hernández-Agramonte Caballero

Give Cash, Reduce Poverty
“Unconditional Cash Transfers” Johannes Haushofer, Jeremy Shapiro

Expanding the Impact of Conditional Cash Transfers
“Financial Inclusion for the Rural Poor Using Agent Networks” Ursula Aldana, Alberto Chong, Sebastian Galiani, Paul Gertler
Photo: Sophie Ayling

Locking Away Savings with Mobile Phones
“Take-up and Utilization of Mobile Commitment Savings in Rwanda” Jenny Aker, Jessica Goldberg, Mercyline Kamande
Photo: Will Boase

How Can Farmers Be More Profitable?
“Disseminating Innovative Resources and Technologies to Smallholders” Mathias Fosu, Dean Karlan, Shashidhara Kolavalli, Chris Udry
Photo: Lindsey Shaughnessy