Banerjee, A, Karlan, D, Osei, R, Thuysbaert, B and Udry, C. 2017. Graduation from ultra-poverty in Ghana, 3ie Grantee Final Report. New Delhi: International Initiative for Impact Evaluation (3ie)
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This is a multi-country study that examined a poverty-alleviation programme targeted at ultra-poor households, defined as having incomes below $1.25 per day. The programme provided a comprehensive livelihood ‘package’ of productive assets, livelihoods training, financial inclusion--along with consumption support during periods of food insecurity, and access to public health schemes. The study employed a community-level randomised design in which ultra-poor households in some communities received the livelihoods package (GUP) while others received either the assets only arm (AO) or savings account arm (SOUP) or nothing at all (control). Two years into the programme, GUP households reported sustained increase in total and food consumption, asset ownership, non-farm income and savings compared to the control households. Unpacking the drivers of these results, it appears that the SOUP arm increased financial inclusion one year after the programme. The study concludes that poverty-alleviation programs have to address several aspects of poverty to have an impact on economic well-being.
A significant body of impact evaluation literature exists on the effectiveness of credit, livelihoods training and in-kind transfers as measures of poverty alleviation. However, there is a lack of consensus among policymakers on which of these approaches work, in particular for the extremely poor. This study addresses this key question by analysing the impact of a holistic package of livelihoods program that combined financial inclusion, training and transfers on the ultra-poor in northern and eastern parts of the country. Fifty-three per cent of households in the study were living on US$1.25 a day or less when the study began, compared to 29 per cent in Ghana as a whole. The poor were identified in a participatory manner by the respective communities and the programme was implemented by an NGO with technical support from Innovations for Poverty Action.
What is the impact of the GUP intervention on social and economic outcomes?
The Graduation from Ultra Poverty (GUP) Pilot supports the poorest of the poor in Ghana, who often earn less than US$1 per day. The programme provides consumption support, livelihood training, transfer of a productive asset, health education and financial education. The programme lasts for 24 months and aims to enable the ultra-poor to escape extreme poverty and graduate into sustainable livelihoods and economic stability, with which they can become disciplined clients of microfinance institutions. This evaluation involves a mixed-methods approach, drawing on both qualitative and quantitative data collected through baseline and follow-up household and community surveys to evaluate the short- and long-term impacts of the programme and to assess its cost-effectiveness. The researchers will identify 300 of the poorest communities in the region to be included in the participatory wealth ranking (PWR) process. Field teams will carry out the PWR process and will verify this selection through Ghana’s Progress out of Poverty Index and household verification visits. Part of a larger evaluation with a total sampling frame of 4,000 households, the core GUP evaluation will include 1,300 ultra-poor households (8–40 households per village). In the main component, randomisation will occur in three parts. First, villages are randomly assigned to receive the GUP programme. Second, within the treatment villages, half of the households will be randomly assigned to receive the GUP programme, and half will be randomly assigned as the control group. Third, half of the households assigned to receive the GUP programme will also receive the savings component; the other half will not. Overall, 650 households will receive the full GUP programme, 325 of which will also get savings services, and 650 households will serve as a control group.
This was a cluster randomised evaluation in which 275 communities were assigned to one pure control and three treatment arms. Households in pure control communities received nothing. In the GUP treatment arm, households received a comprehensive package of services that included a productive asset transfer mostly an animal, a consumption stipend during lean seasons, weekly coaching on assets, finances and entrepreneurship. This package also included enrolment of households in a public insurance scheme and health and nutrition education. The SOUP arm involved only one service-opening savings account for households in treatment communities. The AO arm included only the transfer of a productive asset. The programme was provided to randomly selected households within each treatment community, and not all ultra-poor households.
Theory of change
Poverty is multi-faceted and the GUP model takes a holistic approach to poverty-alleviation. The components of the GUP program simultaneously target multiple factors that keep people poor. The SOUP and AO arm are designed to ‘unpack’ which of the components matter the most in the GUP approach.
Baseline data were available for 231 communities, including76 control, 78 GUP, 77 SOUP and none for AO as well as 3,850 households across all arms. Endline data, collected a year after the rollout of the intervention, were available for 275 communities, including an additional 44 for AO. The attrition rate from the baseline through the endline data collection was low.
This study used an Intention-to-treat analysis.
The study finds significant economic impacts of the GUP programme. The average total monthly consumption was 11 per cent higher among treatment households than households in the comparison group. They spent 12 percent more on food expenses than the comparison group. Households saw significant increases in asset holding and borrowed 58 percent more than those in the comparison group. Their savings were also three times more than households in the comparison group. These households further experienced significant gains in livestock revenue and non-farm income. No consistent impacts were seen for psycho-social well-being and political involvement. The study claims a large return on investment in their cost-benefit analysis. On comparing three treatment arms, GUP, SOUP and AO, the analysis suggests that impacts of the latter two were limited. Although SOUP leads to increased savings, it does not lead to sustained improvements in consumption. While the AO arm does not appear to have any systematic impact on economic well-being.
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