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Benjamin Hilton

Heart vs mind: a review of emergency aid

For more information on this topic, see our 

Whenever a disaster happens, whether it’s an earthquake, a tsunami, or some new human conflict, we all feel that urge to reach into our pockets and give a little to help. We know that, in an emergency, there is a huge amount of suffering, whether that is through deaths, injuries or loss of property and livelihoods. And we think that, when someone has nothing, every little will help. And so we donate, knowing that when the worst comes, victims of a disaster will need all the help they can get. But is emergency aid really that effective? Should we instead hold ourselves back, and give to one of the recommended charities instead?

In 2006, the Disease Control Priorities Project released a damning report of humanitarian interventions in natural disasters, saying that “the highly emotional and sensationalized climate of disaster response has long prevented the adoption of a cost-effectiveness approach in decision making.”[1] The need for rapid response times and improvisation means that it is difficult to ensure cost-effectiveness. Even worse, the international community spends millions on short-term responses to disasters, but there is often not enough funding to ensure even the mid-term survival of victims. And the prevalence of coordination and congestion problems, as well as situations that are outside charities’ control, means that the success of response operations are often limited by factors other than funding, so that there is often very little room for more funding for emergency responses.

On 12th January 2010, a magnitude 7.0 earthquake shook Haiti. The epicentre of the earthquake was just 17km from Haiti’s capital and largest city, Port-au-Prince, with a population of approximately 2 million. A huge number of buildings collapsed, including hospitals and other critical infrastructure. The drinking water and sewer systems were almost completely destroyed.[3]

After the earthquake, there were an estimated 250,000 injured victims suffering a wide range of injuries. In the first few hours, first-aid and triage stations were vital. Within a few days, operations such as wound debridement and amputations were needed. And in the following weeks, surgical needs actually increased as more patients (often with infected wounds) sought medical care. In the weeks to months after the earthquake, non-trauma surgical needs such as maternity services increasingly needed to be provided by NGOs as the pre-earthquake health system collapsed.

The earthquake in Haiti produced a huge humanitarian response. However, the NGOs involved experienced a huge range of different problems that reduced the effectiveness of their operations. Notably, there were supply delays, a lack of appropriately experienced health professionals, and challenges in coordinating between government, military and non-governmental organisations.

Very few of the over 600 health agencies who responded to the Haiti earthquake had the relevant experience or competence to provide appropriate surgical care, and they often lacked the capacity to build emergency surgical infrastructure. A lack of coordination led to too many agencies trying to provide the same care in the same area, while other sections of Port-au-Prince (Haiti’s capital and largest and worst affected city) were left with no access to emergency care. After a few weeks, many military and humanitarian groups left, leaving behind thousands of post-operative patients. The lack of referral systems or any good communication between NGOs caused problems when patients stopped going to hospitals from groups that had left and moved to other NGOs’ hospitals.

Experienced agencies often have a shortlist of hotspot regions (such as central Africa for conflicts or central America for natural disasters). They then preposition materials at major airfields so that their proximity ensures a rapid response. However, prepositioning requires substantial maintenance costs and a high risk of waste as medical and food supplies expire. What’s more, proximity does not necessarily reduce response times. In the case of Haiti, airport congestion led to large delays getting through the medical equipment that was urgently needed to treat the quarter of a million injured victims of the earthquake. The US military-controlled Port-au-Prince airport gave dignitaries and high-profile media priority, while planes carrying humanitarian supplies were diverted to Santo Domingo (the capital of the neighbouring Dominican Republic), and transported the 200 miles to Port-au-Prince by land.

Finally, specialists (surgeons, anaesthesiologists, traumatologists, emergency medicine doctors) who are experienced in treating war-wounded as well as working in resource-limited settings are very rare. Inexperience in emergency settings can be a hindrance rather than a help. The American College of Surgeons listed hundreds of surgeons to go to Haiti, but agencies did not accept their help due to their inexperience.

These problems are indicative of issues encountered in the majority of emergency aid efforts. For example, poor coordination was criticised in response to the Rwandan genocide[4] and the 2004 Indian Ocean tsunami[5]. In the case of emergency aid it is also quite likely that uncontrollable (from an NGO’s perspective) events will occur that significantly hinder the response - in the case of Haiti it was the airport congestion, but in other cases it could be military blockades or overcrowding. Financial aid would not help in these situations, reducing the room for more funding for aid organisations.

Search and rescue teams are needed in the first 48 hours following a disaster involving the collapse of buildings. Very few developing countries have the expertise to conduct search and rescue missions in collapsed multi-storey buildings, so they are often sent at high cost from industrial nations. However, if not executed immediately, the value of search and rescue drastically decreases, as people who are trapped die quickly without treatment. As it also takes a long time for teams from other nations to reach the disaster zone, the large amount of money this requires is very inefficiently spent. Investing in local search and rescue teams is most likely to be an effective use of resources.

Field hospitals are a common but very expensive way of treating casualties. They often arrive too late to treat the emergency casualties before they die or are treated by local hospitals. Field hospitals that stay longer than the first two to three weeks can be effective, although there is little data to suggest how effective compared with how local services would have taken immediate action. In the 2003 Bam earthquake, around $10.5 million was spent on about 10 mobile hospitals, but the cost of rebuilding the entire health infrastructure in the area was only $10.75 million!

Preventing and controlling the spread of disease can be effective if effective methods (such as the use of insecticide-treated malaria nets or encouraging hand-washing with soap) are used. Another way of increasing the cost-effectiveness is by strengthening already-existing programs rather than starting new ones.

Creating shelters is an important method of ensuring survival. However, tent cities, being easy to set up, are the most common method of doing this. Tent cities are difficult to sustain and nearly impossible to end. They rarely have effective sanitation and living conditions are poor. Distributing construction material or cash subsidies is more cost-effective, as they have greater positive effects in the long-term.

Cash assistance is a plausibly effective method to aid with long-term recovery of a disaster. It cannot really be used to meet immediate life saving needs. in most disaster-affected countries, those with the largest income will more easily gain access to the services and goods they need, whether that be shelter, medical, food, or anything else. This suggests that income availability is often a limiting factor in long-term recovery, and that therefore cash assistance could speed up this recovery.

Donating in-kind, for example by sending clothing or tinned food, whether to NGOs or from NGOs to countries, is of limited use, and, according to the Disease Control Priorities report, “often cause serious logistic, economic, and political problems in the recipient country”. They can divert humanitarian funds from more effective uses to warehousing supplies and building facilities for the safe disposal of pharmaceutical donations.

In 2004, the Indian Ocean earthquake and tsunami sparked a huge number of donations, with 81% of UK adults donating to the campaign, and a total of £392 million being donated.[7] 25% of personal overseas charitable donations in 2004/2005 were to the tsunami appeal, and 20% of those were diverted from other causes.[8] If we assume that these donations would have also been on overseas aid, 5% of the total personal donations budget on overseas aid from the UK was diverted away from other causes to the already over-funded tsunami appeal. In 2010, 48% of UK adults donated to the Haiti earthquake appeal, with a total of £107 million donated:[9] 5% of overseas aid donations the Haiti appeal. Almost all major organisations, including the Red Cross, Médecins Sans Frontières, Oxfam, Save the Children and UNICEF raised significantly more than they spent in the first year after the earthquake, indicating the vast overspend and a lack of room for more funding in the Haiti appeal.[10]

With smaller events, the numbers are less staggering, though still surprising. With the 2008 Burma Cyclone, 23% of UK adults donated a total of £19.5m, and in the 2009 Asia-Pacific disasters, 23% of UK adults donated a total of £9.3m. In 2011, for the East Africa drought appeal, 18% of UK adults donated a total of £72m. It is clear that donations to crises are disproportionately large, lending credence to the idea that there is little room for more funding in emergency aid appeals.

I still want to donate! Where should my money go?

The effectiveness of emergency aid varies massively depending on the disaster. However, out of the 5 charities involved in emergency aid that we evaluated, there are clearly some more effective places to donate: if they are active in the area, Médecins Sans Frontières (Doctors Without Borders), and if they are not, to the local Red Cross or Red Crescent society of the area where the event has taken place or the International Federation of Red Cross and Red Crescent societies. The charities on which we have focused has been guided in part by GiveWell’s prior work in this area.[11]

Médecins Sans Frontières were the most impressive emergency aid charity evaluated. They recognise that emergency aid operations are overfunded, closing appeals early[12] or even not raising any money at all for some operations.[13] To minimise response times (one of DCP2’s biggest criticisms of emergency aid), MSF has staff in 60 countries at all times.[14] They do not end an operation after only a few weeks, but only when: the situation has stabilised (e.g. in a conflict zone), or has deteriorated so much that it is now unsafe for its staff; other organisations have the capacity and motivation to restore a medical system that meets people’s needs; or the most urgent needs of victims of a disaster have been met and relief operations are no longer needed.[15] They carry out impressive evaluations of their actions. For example, one paper analysed the cost-effectiveness of two MSF surgical trauma centres: Teme Hospital, Nigeria at $172/DALY averted and La Trinité Hospital, Haiti, at $223/DALY averted.[16] They also wrote the paper on which the above case study on Haiti was based, actively critiquing their own work.

The International Red Cross and Red Crescent Movement consists of 189 National Red Cross and Red Crescent Societies run by 13 million volunteers and coordinated by the International Federation of Red Cross and Red Crescent Societies (IFRC).[17] The IFRC’s Disaster Relief Emergency Fund (DREF) is used to ensure that there is immediate financial support available for National Societies for emergency response to events.[18] The IFRC’s response to events seems very dependent on the national society: their proximity can mean excellent response times and organised relief, but they vary, and there can also be a lack of coordination or even very slow response times in some cases. Overall, the movement’s system of response and comprehensive evaluations are impressive, as is their leading role in the international humanitarian responses to disasters, although we would recommend MSF over the Red Cross/Crescent movement for larger disasters.

The cost-effectiveness of emergency aid in is difficult to assess: the wide range of different situations makes the effectiveness of the interventions vary massively depending on the event, and the lack of research in the area does not help the situation. But some generalisations can be drawn from the evidence we have. Emergency aid is likely to be rushed and improvised, and organisations often arrive too late to help with the short-term problems and leave too early to help with mid- to long-term problems. Lack of coordination between organisations, as well as other problems such as congestion, overcrowding and blockades are prevalent in emergency responses. These problems cannot easily be overcome with more funding, and emergency responses often receive far more than is spent, meaning that there is little room for more funding. If you still want to give, give cash not other objects, and give to charities that act more effectively with their money such as the ones mentioned here.

Disease Control Priorities in Developing Countries, Second Edition (DCP2), The World Bank, Chapter 61

, Natural Disaster Mitigation and Relief, Claude de Ville de Goyet, Ricardo Zapata Marti and Claudio Osorio, 2006,

This section is a summary of the first two pages of "

Improving Effective Surgical Delivery in Humanitarian Disasters: Lessons from Haiti

" by Kathryn Chu, Christopher Stokes, Miguel Trelles, and Nathan Ford. PLOS Medicine, April 2011,

Public health risk assessment and interventions: Earthquake, Haiti, January 2010, World Health Organization

Address by Mr. Cornelio Sommaruga, President of the ICRC, at the United Nations General Assembly 49th session, 23 November 1994

Coordination of international humanitarian assistance in tsunami-affected countries, Tsunami Evaluation Coalition, Jon Bennett, WIlliam Bertrand, Clare Harkin, Stanley Smarasinghe, Hemantha Wickramatillake July 2006

CAF Disaster Monitor, A survey of the UK general public’s donations to overseas disaster appeals, Summary of trends, Liz Lipscomb, December 2011

UK Giving 2004/05, Results of the 2004/5 survey of individual charitable giving in the UK, Cathy Pharoah, Catherine Walker, Charities Aid Foundation; Karl Wilding, Susan Wainwright, National Council for Voluntary Organisations

Ratings of Disaster relief charities one year after the Haiti earthquake | Givewell, February 2011

Disaster relief charities | GiveWell, 2011

Japan: A note on Funding and Donations | Doctors Without Borders, March 14 2011

Closing a programme | Médecins Sans Frontières (MSF) International

Comparative Cost-Effectiveness Analysis of Two MSF Surgical Trauma Centers, Word Journal of Surgery, Richard A. Gosselin., Andreu Maldonado, Greg Elder, 2009

Olga Kuznetsova

The evidence for deworming

Parasitic worm infections are endemic in large parts of the world. Eradication of these worms (deworming) has long been considered a simple and cheap intervention that brings substantial health and education benefits to millions of children worldwide. Many organisations such as the Bill and Melinda Gates Foundation, the World Health Organisation (WHO), and Deworm The World support deworming programs. However in recent years, more data have emerged that cast doubts on the effectiveness of such programmes. Most of these studies have already been discussed by Giving What We Can in 2012, with a focus primarily on the cost-effectiveness of treating worm infections [1]. Here, I will mention the most recent findings, and why we believe that deworming is still a worthwhile cause to support.

Soil-transmitted worm infections are prevalent in the world’s poorest communities and cause symptoms such as anaemia, diarrhoea, abdominal pain, and weakness. The three main types of intestinal worms are roundworms, whipworms (as pictured below) and hookworms, and their eggs pass into the soil through human faeces in regions with poor sanitation. Infection is transmitted when the eggs are ingested via contaminated vegetables or utensils, and hatch in the intestine [2]. According to the WHO, worm infection in children can cause organ damage that exacerbates with age, as well as less direct effects such as reduced productivity, fatigue, and as a result, lower school attendance. It might also worsen other conditions such as tuberculosis and HIV/AIDS [3].

Although deaths from worm infections are rare, worm treatment has long been regarded a cheap and effective health intervention in the developing world. The earliest example of successful deworming was carried out in the early 20th century in the southern states of the USA. After observing that 40% of children suffered from hookworm infections, John D. Rockefeller’s Sanitary Commission sponsored an eradication campaign, which included treatment with thymol and education about good hygiene. The benefits extended beyond health, with improvements seen in school attendance, enrolment, and literacy [4]. Similar observations were made more recently in Kenya, where mass deworming of schoolchildren led to reduced absence from class [5]. Looking at even more long-term benefits, two unpublished studies reported the results of a Primary School Deworming Program in Kenya, which started in 1998. Besides an improvement in height and weight, children treated for worms worked more hours in adulthood due to improved health and earned 20% more than those not treated [6]. However, the fact that the studies have not yet been published has raised concerns about publication bias [7], while the positive studies were treated with significant reservations by the charity evaluator GiveWell, who argue that the results are not necessarily representative of other regions with a lower worm burden [8].

As always, when there are doubts about the efficacy of a treatment, a meta-analysis of published studies can reveal the true effect. The most recent version of the Cochrane review (2012) assessed 42 randomised controlled trials of deworming. In several studies, children were pre-screened for worm infection before treatment, and showed some increase in weight and haemoglobin levels. However, in the trials where the entire community was treated without pre-screening, there was little or no effect on health parameters, growth, cognitive ability, or school attendance. The exception were two trials showing a large positive increase in weight, however both were conducted over 15 years ago in an area with a high worm burden and may not reflect the situation elsewhere [9].

Overall, the Cochrane review has sparked criticism, notably from Innovations for Poverty Action (IPA). In their blog, IPA argues that the review left out three studies showing a positive effect of deworming (one - the early 20th century study and two unpublished). In addition, if deworming following pre-screening improved certain health parameters, the same effects should be seen in infected individuals during mass deworming projects, even if the data from the whole population do not show statistically-significant benefits. On the other hand, GiveWell, while agreeing that the evidence for the benefits of deworming is low, mentioned that the Cochrane review did not include studies on combination treatment for soil-transmitted worms and schistosomiasis (infections of the urinary tract and intestines by the Schistosoma worm). They maintain that combination treatment leads to improvements in health and development, and, like Giving What We Can, continue to recommend the Schistosomiasis Control Initiative (SCI) as a highly effective charity [8, 10, 11].

The largest trial to date, conducted in North India, was published in 2013 eight years after it was completed. It studied one million children who were treated with deworming drugs twice a year over a five-year period. A trial this size was an opportunity to test whether treating worm infections would reduce child mortality (in parallel, the authors examined the effects of Vitamin A supplements on mortality). The results were clear and disappointing: long-term deworming had no significant impact on mortality, weight, height, or haemoglobin levels [12]. However, the validity of the methods and results has been controversial. GiveWell raised the question of why a trial this size was not published for eight years since its completion date, suggesting publication bias [10]. Furthermore, a response published in the Lancet journal claimed that coverage of Vitamin A programme was far lower than the 96% reported in the trial, with less than 10% of children reporting to have received a vitamin tablet within the last 6 months of the study. There were also claims of poor monitoring, reporting bias, and little training and incentive given to the Indian workers who administered the drugs [13]. All these issues raise significant doubts as to whether the Vitamin A (and by extension, deworming) study has been properly planned and executed, and the results are not given much weight in the scientific community.

To conclude, although some recent studies have shown no improvements to health and education after deworming, the data are not always reliable and the studies not always well-executed. The mixed results of the studies in the Cochrane review highlight how trial design and monitoring can affect the conclusion, even when the same drugs are used to treat the disease. Furthermore, the current interventions are very cost-effective even considering the recent adjustment of DCP2’s estimate (see the 2012 GWWC post). Overall, it appears that there can be short-term and long-term health benefits to deworming, especially when schistosomiasis is treated together with soil-transmitted worm infections. As a result, both GiveWell and Giving What We Can continue to recommend deworming and schistosomiasis treatment programs such as SCI and Deworm The World Initiative.

Neglected Tropical Diseases – Are they Cost-Effective to Treat?

Preventive chemotherapy in human helminthiasis

Bleakley H. Disease and Development: Evidence from Hookworm Eradication in the American South. The Quarterly Journal of Economics. 2007;122(1):73-117

Miguel E and Kremer M. Worms: Identifying Impacts on Education and Health in the Presence of Treatment Externalities. Econometrica. 2004;72(1):159-217

Worms at Work: Long-Run Impacts of Child Health Gains.

Hawkes N. Deworming Debunked. BMJ. 2013;345, e8558. doi:10.1136/bmj.e8558

Combination Deworming (Mass Drug Administration Targeting Both Schistosomiasis and Soil-transmitted Helminths).

Taylor-Robinson DC, Maayan N, Soares-Weiser K et al. Deworming Drugs for Soil-Transmitted Intestinal Worms in Children: Effects on Nutritional Indicators, Haemoglobin and School Performance. Cochrane Database Syst Rev. 2012; doi:10.1002/14651858.CD000371.pub5

New Cochrane Review of the Effectiveness of Deworming.

Cochrane’s Incomplete and Misleading Summary of the Evidence of Deworming.

Awasthi S, Peto R, Read S et al. Population Deworming Every 6 Months with Albendazole in 1 Million Pre-school Children in North India: DEVTA, a Cluster-Randomised Trial. The Lancet. 2013;381:1478-1486

Sommer A, West Jr K et al. Vitamin A Supplementation in Indian Children. The Lancet. 2013;382(9892):591

David Goll

Agricultural research and development

: We think our top charities do fantastic work, but we are always interested in other methods for helping the world’s poor. The Copenhagen Consensus and other authors have highlighted the potential of agricultural R&D as a high-leverage opportunity. This was enough to get us interested in understanding the area better, so we asked David Goll, a Giving What We Can member and a professional economist, to investigate how it compares to our existing recommendations.

Owen Cotton-Barratt, Director of Research for Giving What We Can

Around one in every eight people suffers from chronic hunger, according to the Food and Agricultural Organisation’s most recent estimates (FAO, 2013). Two billion suffer from micronutrient deficiencies. One quarter of children are stunted. Increasing agricultural yields and therefore availability of food will be essential in tackling these problems, which are likely to get worse as population and income growth place ever greater pressure on supply. To some extent, yield growth can be achieved through improved use of existing technologies. Access to and use of irrigation, fertilizer and agricultural machinery remains limited in some developing countries. However, targeted research and development will also be required to generate new technologies (seeds, animal vaccines and so on) that allow burgeoning food demand to be met.

Agricultural research and development encompasses an extremely broad range of activities and potential innovations. A 2008 paper issued by Consultative Group on International Agricultural Research (von Braun et al., 2008), an international organization that funds and coordinates agricultural research, identifies 14 ‘best bets’. These include developing hybrid and inbred seeds with improved yield potential, better resistance to wheat rust, increased drought tolerance and added nutritional value, but also encompasses the development new animal vaccines, better fertilizer use and improved processing and management techniques for fisheries.

Notable successes in seed development seem to have generated immense social benefit. The high-yielding varieties that spread through the ‘Green Revolution’ are often credited with driving a doubling of rice and wheat yields in Asia from the late 60s to the 90s, saving hundreds of millions of people people from famine (see, for instance, Economist, 2014). Given the prevalence of hunger and the high proportion of the extremely poor that work as farmers, agricultural research and development seems to offer a potential opportunity for effective altruism.

Existing benefit-cost estimates are promising, though not spectacular. The Copenhagen Consensus project ranked R&D to increase yield enhancements as the sixth most valuable social investment available, behind deworming and micronutrient interventions but ahead of popular programmes such as conditional cash transfers for education (Copenhagen Consensus, 2012).

The calculations that fed into this decision were based on two main categories of benefit. First, higher yield seeds allow production of larger quantities of agricultural output at a lower cost, bolstering the income of farmers. Around 70 per cent of the African labour-force work in agriculture, many in smallholdings that generate little income above subsistence (IFPRI, 2012). Boosting gains from agriculture could clearly provide large benefits for many of the worst off. Second, decreased costs of production lead to lower prices for food, allowing consumers to purchase more or freeing up their income to be spent elsewhere.

Projecting out to 2050, these two types of benefit alone are expected to outweigh the costs of increased R&D by 16 to 1 (Hoddinott et al., 2012). By comparison, the benefit-cost ratios estimated within the same project for salt iodization (a form of micronutrient supplement) range between 15 to 1 and 520 to 1, with the latest estimates finding a benefit-cost ratio of 81 to 1 (Hoddinott et al., 2012), and most of the estimates reported to the Copenhagen Consensus panel for the benefit-cost ratio of conditional cash transfers for education fall between 10 to 1 and 2 to 1 (Orazem, 2012). Using a very crude method, we can also convert the benefit-cost ratios into approximate QALY terms. Using a QALY value of three times annual income and taking the income of the beneficiaries to be $4.50 a day (around average income per capita in Sub-Saharan Africa), agricultural R&D is estimated to generate a benefit equivalent to one QALY for every $304.

Other types of benefit were not tabulated in the Copenhagen Consensus study, but should also be high. Strains that are resistant to drought, for instance, could greatly reduce year-to-year variation in crop yields. More resilient seeds could mitigate the negative effects of climate change on agriculture. Lower food prices may lead to better child nutrition, with life-long improved health and productivity. Finally, higher yields may decrease the potential for conflict due to the pressure on limited land, food and water resources resulting from climate change and population growth. Each of these benefits alone may justify the costs of research and development but, with our limited knowledge, they are not easily quantified.

The high benefit-cost ratio found by the Copenhagen Consensus team is broadly consistent with other literature. Meta-analysis of 292 academic studies on this topic has found that the median rate of return of agricultural R&D is around 44% (Alston et al., 2000). A rate of return, in this sense, indicates the discount rate at which the costs of an investment are equal to the benefits – rather like the interest rate on a bank account. More recent studies, focusing on research in Sub-Saharan Africa, have found aggregate returns of 55% (Alene, 2008).

Unfortunately, the rate of return on investment is not directly comparable to a benefit-cost ratio; the methodology applied often deviates from the welfare based approach applied by the Copenhagen Consensus team and the two numbers cannot be accurately converted into similar terms. Nonetheless, a crude conversion method can be applied to reach a ballpark estimate of the benefit-cost ratio implied by these studies. Assuming a marginal increase in spending on research is borne upfront and that research generates a constant stream of equal benefits each year from then on, the benefit-cost ratio for an investment with a 44% rate of return at a 5% discount rate is 9 to 1.

There are, however, at least two reasons to treat these high benefit-cost estimates with skepticism.

First, estimating the effect of research and development is difficult. One problem is attribution. Growth in yields can be observed as can spending on research and development, but it is much more difficult to observe which spending on research led to which increase in yields. If yields grew last year in Ethiopia, was this the result of research that occurred two years ago or ten years ago? Were the improved yields driven by spending on research within Ethiopia, or was it a spillover from research conducted elsewhere in the region or, even, research conducted on another continent? Estimating the effect of R&D spend requires researchers to adopt a specific temporal and spatial model dictating which expenditures can effect which yields in which countries. Teasing out causality can therefore be tricky, and some studies have suggested that inappropriate attribution may have led to systematic bias in the available estimates (e.g. Alston et al., 2009).

Another problem is cherry picking. Estimates garnered from meta-analysis are likely to be upwardly biased because studies are much more likely to be conducted on R&D programmes that are perceived to be successful. Failed programmes, on the other hand, are likely to be ignored and, as a result, the research may paint an overly optimistic picture of the potential impact of R&D.

Second, for new technologies to have an impact on the poor, they need to be widely adopted. This step should not be taken for granted. Adoption rates for improved varieties of crops remain low throughout Africa; farmer-saved seeds, which are unlikely to be improved, account for around 80 per cent of planted seeds in Africa compared to a global average of 35 per cent (AGRA, 2013). To some extent, this is because previous research has been poorly targeted at regional needs. The high-yield varieties developed during the Green Revolution require irrigation or very high levels of rainfall. New seed development was focused on wheat and rice, rather than alternative crops such as sorghum, cassava and millet. High yielding varieties required extensive fertilizer use. All of these features rendered them unsuitable for the African context, and explain why it was not easy to replicate the Asian success story elsewhere (Elliot, 2010).

However, there are more structural features of many developing countries that will limit adoption. Lack of available markets for surplus production can mean that smallholders can see limited benefit from larger harvests, especially when new seeds are costly and require additional labour and expensive fertilizer. Weak property rights undermine incentives to invest, given that farmers may be unable to hold on to their surplus crop or sell it at a fair price. Unavailability of credit means that, even when it makes good economic sense for farmers to invest in improved seeds, they may not be able to raise the initial capital required. The benefit-cost estimates discussed above, based on a synthesis of evidence from a diverse set of contexts, may underestimate the difficulties with adoption in more challenging countries.

Even in Asia during the Green Revolution, high-yield varieties were adopted first and foremost by large agricultural interests rather than smallholders (Wiggins et al., 2013). If this was the case for newly developed seeds, the impact on the poorest would be more limited than suggested in the Copenhagen Consensus study. They could still benefit from lower food prices and increased employment in the agricultural sector, but in extreme scenarios smallholders may even lose out due to low cost competition from larger farms that adopt new seeds.

In combination, the difficulties with estimating the effects of R&D and the potential barriers to adoption suggest that the estimated benefit-cost ratios reported earlier are likely to be upwardly biased. The benefit-cost ratios estimated are also lower than those associated with Giving What We Can’s currently recommended charities. For instance, the $304 per QALY estimate based on the Copenhagen Consensus benefit-cost ratio, which appears to be at the higher end of the literature, compares unfavourably to GiveWell’s baseline estimate of $45 to $115 per DALY for insecticide treated bednets (GiveWell, 2013). The benefit-cost ratios also appear to be lower than those associated with micronutrient supplements, as discussed earlier. While there are significant benefits that remain unquantified within agricultural R&D, the same is also true for interventions based on bednet distribution, deworming and micronutrient supplements. As a result, while this area could yield individual high impact opportunities, the literature as it stands does not seem to support the claim that agricultural R&D is likely to be more effective than the best other interventions.

Food and Agricultural Organisation,’The State of Food and Agriculture 2013’ (2013)

von Braun, J., Fan, S., Meinzen-Dick, R., Rosegrant, M. and Nin Pratt, A., ‘What to Expect from Scaling Up CGIAR Investments and ‘Best Bet’ Programs’ (2008)

Copenhagen Consensus, ‘Expert Panel Findings’ (2012)

Hoddinott, J., Rosegrant, M. and Torero, M. ‘Investments to reduce hunger and undernutrition’ (2012)

Orazem, P. ‘The Case for Improving School Quality and Student Health as a Development Strategy’ (2012)

Alliance for Green Revolution in Africa, ‘Africa Agriculture Status Report 2013: Focus on Staple Crops’, (2013)

International Food Policy Research Institute, ‘2012 Global Food Policy Report’, (2012)

Elliot, K., ‘Pulling Agricultural Innovation and the Market Together’, (2010)

Wiggins, S., Farrington, J., Henley, G., Grist, N. and Locke, A. ‘Agricultural development policy: a contemporary agenda’ (2013)

Givewell, ‘Mass distribution of long-lasting insecticide-treated nets (LLINs)’, 2013, 

http://www.givewell.org/international/technical/programs/insecticide-treated-nets

The Economist, ‘A bigger rice bowl’, May 10th 2014

Josh Goldenberg

Long run effects of microcredit: a first glimpse

Microfinance is the provision of financial services to those in poverty. This has generally taken three forms. First, there is microcredit – the provision of loans - which is the dominant and best-known form of microfinance. There is also microsavings, the provision of savings accounts, and microinsurance, the provision of insurance.

While there appears to be some reason to think microsavings and microinsurance are more effective at relieving poverty than microcredit, this post will focus on microcredit due to its greater popularity and the appearance of a recent World Bank working paper that promises to shed light on its long-term benefits.

Microcredit has received considerable public attention, much more so than many other development interventions. Despite this, there has been relatively little high-quality research on the intervention. In particular there is a lack of randomised control trials (RCTs) compared to many medical interventions; research has relied on methods which give a less accurate idea of how much good microcredit does.

From the current research, we believe that the effects of microcredit are 

. Until now, however, available studies have been done over a period of a couple of years. This has left open the possibility that, while microcredit has an unclear effect over a couple of years, there may be longer-term benefits that make microcredit a more effective intervention.

, released in March this year by Shahidur Khandker and Hussain Samad, begins to try to answer this question. Conducted over a period of 20 years in Bangladesh, the research investigates the effect of both past and current microcredit borrowing on outcomes like poverty and income. On top of being done over a considerably longer time period, the current study is also quite large, investigating over 3,000 households. The Economist has 

greeted its results with considerable enthusiasm

, writing: “Bangladesh’s government should look at the study—and stop interfering with Grameen’s efforts to cut poverty.”

The data was gathered in 3 rounds – one in 1991/2, one in 1998/9, one in 2010/11 – by the World Bank and partners BIDS (Bangladesh Institute of Development Studies) and InM (Institute of Microfinance). Households were surveyed to see which microfinance programs they were a part of, for their background (how many people in the household, gender balance, etc.) and for outcomes (household income, labour supply, school enrolment, poverty, etc.).

Then a regression analysis was performed – examining the correlation between microfinance program participation and outcomes like extreme poverty. To isolate causation in a study of this kind, one tries to account for all potential confounding factors and determine the strength of the remaining correlation.

In this study, past credit was considered separately to current credit, so as to isolate the correlation of e.g. past credit and net worth, as opposed to just credit and net worth. This allows us to then see how much of the effect on net worth is down to participants’ having loaned in the past, and how much is down to them having loans out now. If we then observe that the effect of past credit is much higher than current credit, we have evidence that microfinance’s effects take a long time, so the other studies in the area – which are done over a year or two – might be too pessimistic due to their inability to account for the true benefits of microfinance.

One potential confounding factor is attrition: 7.4% of households surveyed in 1991/2 couldn’t be traced in 1998/9, and 10% of households surveyed in 1998/9 couldn’t be traced in 2010/11. This is an issue if attrition is not random: for example, if the households that can’t be traced are ones whose homes were repossessed since they failed to pay off a loan. The authors accounted for this by using ‘inverse probability weights’: roughly, if two households are similar and are surveyed in the first round, and one drops out, then the one that’s left in is weighed twice as much in the second round.The study’s authors also tried to account for household split-off, where some members of a household split off to make their own (e.g. when household members grow up and marry). They only included the households which were surveyed in all 3 rounds, so that the new households that arise from a split-off are ignored.

This seems somewhat problematic, and indeed is different to the method done when only the first two rounds were considered (Khandker 2005), where the two households were aggregated (having checked this wouldn’t bias the outcome). For example, household income per capita will appear to go up in these households simply because some people have left the household, rather than because income has actually gone up. Equally, household net worth may go down because the household members who split off may take some of the worth to start the new household. If either of these happen more commonly to those who take part in microfinance programs then it will look like microfinance increases household income per capita or decreases net worth, even though that is not down to the microfinance program (or at least should not be attributed to it). The reverse could also be observed if these happen less commonly for those who take part in microfinance programs.

, is that those who take part in microfinance programs may be more entrepreneurial or better able to use resources, and so would do better than any control group even without microfinance. One way to get around this is to randomise the trial, so that there is no way for people who are disproportionately entrepreneurial to be more or less likely to receive microfinance. However, that is not done here and means the results of the paper must be interpreted with some caution.

Firstly, the authors found that increasing loans to women reduced extreme poverty, and increased assets and school enrolment of both boys and girls, though it did not increase income or expenditure. This is not uncommon; past research of microcredit has given a mix of papers showing a positive effect and papers showing no effect. This research, while showing a positive effect, is relatively in line with the consensus, as the statistically significant effects are small: for example, an increase of loans to women by 10% increased non-land assets by a mere 0.25% (though still large enough to be statistically significant).

What is more interesting in this paper is how much of the change in outcomes is down to current borrowing, and how much is down to past borrowing. In particular, several outcomes were (statistically significantly) bettered by past loans. An increase of 10% in past loans to women increased per capita income by 0.16%, whereas a 10% increase in current loans to women increased per capita income by only 0.04% - too small to be statistically significant. Similarly, extreme poverty was reduced by both past and current loans, suggesting that microcredit brings some people out of extreme poverty in the short-run, and brings further people out of poverty in the long-run.

However, the research suggests microcredit does not have a positive effect on all outcomes over the long-run. A 10% increase in past loans to women decreases non-land assets by 0.12%, and school enrolment by 4-5%. In these outcomes, current loans have a bigger effect than past loans. A 10% increase in both past and current loans will still increase non-land assets and school enrolment. However, borrowing may not increase non-land assets considerably over the long-term and holdings could revert to pre-loan levels if one doesn’t continue to take out further loans.

The new paper gives us a first insight into the long-term effects of microcredit. It suggests that there is some reason to be optimistic about the long-term effects of microcredit on poverty and household income, but equally some reason to think that short-run increases in school enrolment or assets may be short-lived. This assumes that the paper is methodologically sound. Given the small effects, and concerns over the non-randomized methodology noted earlier, perhaps the best thing to conclude from the paper is that there is weak evidence that microcredit has some benefits and some costs over the long-term, but certainly not enough to be convinced of the effectiveness of microfinance to the extent The Economist is. David Roodman goes so far as to say that he is “surprised by how weak [the article] is”.

Still, this is just one paper, and there is plenty of scope for more research to change the picture, and it is encouraging to see more research in this area. Research would at this point likely be better done on microsavings and microinsurance. There is greater scope to expanding savings and insurance coverage and higher potential effectiveness. It remains unlikely, however, that microcredit will be recommended by us in the near future, due to research showing either small or no effects, unlike our current recommended charities. David Roodman in Due Diligence agrees, writing: “less money for microcredit and more for bed nets would be a double win.”

Andreas Mogensen

Good Done Right: A conference on effective altruism

This July saw the first academic conference on effective altruism. The three-day event took place at All Souls College, one of the constituent colleges of the University of Oxford. The conference featured a diverse range of speakers addressing issues related to effective altruism in a shared setting. It was a fantastic opportunity to share insights and ideas from some of the best minds working on these issues.

I’m very pleased to announce that audio recordings from most of the talks are now available on 

, alongside speakers’ slides (where applicable). I’m very grateful to all of the participants for their fantastic presentations, and to All Souls College and the Centre for Effective Altruism for supporting the conference.

Blog

Heart vs mind: a review of emergency aid

The evidence for deworming

Agricultural research and development

Long run effects of microcredit: a first glimpse

Good Done Right: A conference on effective altruism

Why I joined Giving What We Can as a student

Why I spent a month's wages on charity, not an engagement ring

How to double your donation to AMF

Child marriage: Why does it happen and what can we do?

Difficult decisions: How I'm using my life to help others