More Than Good Intentions Read online

  Table of Contents

  Title Page

  Copyright Page

  Dedication

  Chapter 1 - INTRODUCTION

  Chapter 2 - TO WORK AGAINST POVERTY

  Chapter 3 - TO BUY

  Chapter 4 - TO BORROW

  Chapter 5 - TO PURSUE HAPPINESS

  Chapter 6 - TO COOPERATE IN GROUPS

  Chapter 7 - TO SAVE

  Chapter 8 - TO FARM

  Chapter 9 - TO LEARN

  Chapter 10 - TO STAY HEALTHY

  Chapter 11 - TO MATE

  Chapter 12 - TO GIVE

  NOTES

  Acknowledgements

  INDEX

  PRAISE FOR

  More Than Good Intentions

  “Stimulating, breezy, intellectual; this book has it all. Once I picked up this masterpiece, I found myself opening up a birthday present every time I turned the page. A must read for anyone serious about the most important problems facing humanity today.”

  —John A. List, Homer J. Livingstone Professor of Economics,

  University of Chicago

  “This book wraps a world-changing idea in an immensely readable narrative. If we are going to overcome global poverty, we need more than good intentions, and Dean Karlan and Jacob Appel show us exactly what we need and how to get there.”

  —Peter Singer, Ira W. Decamp Professor of Bioethics

  in the University Center for Human Values, Princeton University

  “An accessible account of ‘the new development economics’ based on field experiments and randomized control trials. . . . Valuable, insightful. . . . Anyone interested in a readable discussion of this truly new approach to poverty should pick up this book.”

  —Tyler Cowen, professor of economics, George Mason University;

  author of The Age of the Infovore and coauthor of the blog

  marginalrevolution.com

  “The most urgent challenge in the world is economic development, and Karlan is right at its cutting edge. . . . An important book—and a captivating one.”

  —Tim Harford, author of The Undercover Economist and

  the Dear Economist column at Financial Times

  “The types of research that Dean Karlan and his colleagues at Innovations for Poverty Action conduct are critical for helping foundations like the Ford Foundation.”

  —Frank DeGiovanni, director of economic development,

  Ford Foundation; former chair of the executive committee,

  Consultative Group to Assist the Poor

  “Karlan is one of the world’s leading experts on microfinance in developing countries, and he’s done pioneering research around the globe. His work smashes old boundaries within economics to answer some of the most pressing issues facing poor countries today. Most of what we know today about how to make microfinance work for the poor flows from Dean’s research.”

  —Edward Miguel, professor of economics,

  University of California, Berkeley

  “More Than Good Intentions offers a new way forward in the battle against poverty. It’s a data-driven path, but one populated with real-life stories and full of the human spirit. Karlan and Appel call us to be rigorous in our decisions—and we need to listen to them, for the stakes couldn’t be higher.”

  —Jacob Harold, program officer, philanthropy,

  The William and Flora Hewlett Foundation

  “This wonderful book, by one of the leading combatants, brings us directly to front lines of the battle for a more reasoned approach to fighting poverty.”

  —Abhijit Banerjee, the Ford Foundation

  International Professor of Economics at MIT

  “This book invites you to a conversation. The topic could not be more compelling: global poverty. Your partner could not be more fascinating: one of the leading scholars in the world working on it. The result is everything you would hope for.”

  —Sendhil Mullainathan, professor of economics, Harvard University

  “Be prepared to have your preconceptions about international development sharply challenged, as Karlan and Appel break down what really works to alleviate poverty.”

  —Justin Oliver, executive director, Center for Microfinance,

  Chennai, India

  “Karlan offers that all-too-rare combination of academic research excellence and its application to international development practice. Karlan is creating a breakthrough.”

  —Chris Dunford, president of Freedom from Hunger

  “Karlan and Appel write that their goal is ‘to speak directly to readers, to lead them into some corners of the world they might not otherwise encounter, and bring them face-to-face with the people who populate those places.’ They have succeeded admirably, as both advocates and analysts.”

  —Kirkus

  “Engaging prose…vivid reportage…an enlightening and optimistic take on smartening up development aid.”

  —Publishers Weekly

  DUTTON

  Published by Penguin Group (U.S.A.) Inc.

  375 Hudson Street, New York, New York 10014, U.S.A.

  Penguin Group (Canada), 90 Eglinton Avenue East, Suite 700, Toronto, Ontario M4P 2Y3, Canada (a division of Pearson Penguin Canada Inc.); Penguin Books Ltd, 80 Strand, London WC2R 0RL, England; Penguin Ireland, 25 St Stephen’s Green, Dublin 2, Ireland (a division of Penguin Books Ltd); Penguin Group (Australia), 250 Camberwell Road, Camberwell, Victoria 3124, Australia (a division of Pearson Australia Group Pty Ltd); Penguin Books India Pvt Ltd, 11 Community Centre, Panchsheel Park, New Delhi–110 017, India; Penguin Group (NZ), 67 Apollo Drive, Rosedale, North Shore 0632, New Zealand (a division of Pearson New Zealand Ltd); Penguin Books (South Africa) (Pty) Ltd, 24 Sturdee Avenue, Rosebank, Johannesburg 2196, South Africa

  Penguin Books Ltd, Registered Offices: 80 Strand, London WC2R 0RL, England

  Published by Dutton, a member of Penguin Group (U.S.A.) Inc.

  First printing, April 2011

  Copyright © 2011 by Dean Karlan and Jacob Appel

  All rights reserved

  REGISTERED TRADEMARK—MARCA REGISTRADA

  LIBRARY OF CONGRESS CATALOGING-IN-PUBLICATION DATA

  has been applied for

  eISBN : 978-1-101-47638-3

  Without limiting the rights under copyright reserved above, no part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording, or otherwise), without the prior written permission of both the copyright owner and the above publisher of this book.

  The scanning, uploading, and distribution of this book via the Internet or via any other means without the permission of the publisher is illegal and punishable by law. Please purchase only authorized electronic editions, and do not participate in or encourage electronic piracy of copyrighted materials. Your support of the author’s rights is appreciated.

  While the author has made every effort to provide accurate telephone numbers and Internet addresses at the time of publication, neither the publisher nor the author assumes any responsibility for errors, or for changes that occur after publication. Further, the publisher does not have any control over and does not assume any responsibility for author or third-party Web sites or their content.

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  Version_2

  Dean: To Cindy, for all of your love and support.

  And to Maya, Max, and Gabi, in random order.

  Jake: To Poppop and Grandpa

  AUTHORS’ NOTE

  How Jake and I Met, and the Voice in This Book

  How Jake and I Met

  In late 2006, I got an automated e-mail alert from Google informing me that “Innovations for Povert
y Action,” the name of the nonprofit organization I founded, had appeared on a Web page. I clicked the link and found myself reading a blog entry by Jacob Appel, then a recent hire who was working on one of our projects in Ghana. The next thing I knew, an hour had passed and I had read through the entire thing—which is extraordinary for someone with the attention span of a cornflake.

  I knew Jake—I had interviewed him a few months before and had been working with him on two different projects—but I didn’t know he was a writer. I’d hired him on the strength of his math background, and in his interview he struck me as a fellow numbers geek. But through his blog I learned that Jake is a sponge. He is the type of guy who doesn’t just go to the market and buy his groceries. He talks to the taxi driver on the way to the market and learns about his life. At the market he asks about business, how it is going, why the entrepreneur is doing what she is doing. He soaks up the world around him, and squeezes it out in gripping stories about daily life. And he writes wonderfully, in contrast to the boring, technical writing called for in academia. A team was born.

  This book was a project I had had in mind for a long time. I really wanted to create a bridge between the wonky, specialized world of economic development and the wider world of people who care about and engage with the issues of poverty, but not necessarily as a full-time job. Much of the research my colleagues and I do ends up languishing in technical journals and is discussed mainly at conferences of academics, development professionals, and large foundations. To the extent that the public is aware of it at all, most have the impression that it’s dense, dull, and dry stuff.

  In truth, it’s anything but. As anyone who has spent time doing research in the field will attest, it is engaging, thought-provoking, and inspiring work. Reading Jake’s blog, I knew that he could communicate that, both through his accounts of interactions with everyday people and through writing about the research itself. So, as his project in Ghana was winding down, I approached him about working together on a book. It was a pretty attractive offer, all things considered. I was fairly jealous: travel the globe, visit projects, read current research, and write. Happily, he accepted. I did get to travel some with him too. Although the discovery of Scrabble on the iPod touch did not help our productivity when visiting sites or on our writing retreats together, it undoubtedly added to the fun. Eighteen months and many thousands of miles later, here we are.

  The Voice in This Book

  Above all, the goal was to make this book accessible and engaging, for it to speak directly to readers, to lead them into some corners of the world they might not otherwise encounter, and to bring them face-to-face with the people who populate those places. The last thing I wanted was for readers to get hung up on the authors, confused about whose voice they were hearing.

  So, although this has been a thoroughly collaborative project, Jake and I have tried to keep things simple by writing in my voice throughout. The I in this book is me, Dean. But the writing is both of ours. And if there is a sentence on these pages that really pops, it is a good bet that Jake wrote it.

  If I (or, rather, we) did a good job, then this is the only time you should have to think about who’s who.

  Thank you for reading.

  Dean Karlan (I) and Jacob Appel (Jake)

  1

  INTRODUCTION

  The Monks and the Fish

  Morning in the harbor at Marina del Rey in Los Angeles is steely bright, and it smells of brine and of fish, and it is filled with the sound of pelicans. They congregate by the hundreds on the end of the jetty, strutting and chattering and throwing their heads back to slug down great bulging beakfuls of breakfast. Completely absorbed in the guzzling of their food, they seem not to notice the dinghies puttering by.

  Jake was in one of those dinghies with his girlfriend Chelsea and her father, returning from a short ride out on the gentle rolling swell of the Pacific. They passed the gray-brown pelicans on the gray-brown rocks and continued into the marina. Coming down the causeway, they passed the gas pumps, the big prow of the Catalina ferry, and the Buddhist monks.

  Yes, the Buddhist monks: those unassuming men and women, some dressed in saffron robes and others in street clothes, standing on the dock around a folding card table on which was erected a little altar with a statue of a sitting Buddha and an oil lamp. On the ground in front of the table was a plastic tub as big as a steamer trunk. From the boat, low in the water, Jake couldn’t see what was inside. They were saying prayers over it.

  Chelsea’s father put the boat into idle and turned in a halfcircle to stay even with the monks. They came to the end of their prayer and bowed deeply, and the two closest to the bin took it by the handles and dragged it forward to the edge of the dock. Then they tipped it.

  Out came a great torrent of water and minnows, which landed in the causeway with a silvery clatter. The minnows disappeared instantly, darting away in every direction, and the ripples from the splash were drawn down the causeway to the ocean by the outgoing tide. The monks bowed again, deeply, and began to pack up their things.

  What Jake had seen, Chelsea told him afterward, was a regular ritual. Those particular Buddhist monks set a tubful of fish free every couple of weeks. It was their small way of setting right something they believed was wrong. They didn’t think those fish ought to be killed, so they bought their freedom. They would approach some fishermen, purchase their day’s catch, say a prayer, and release the fish into the causeway to return to the ocean.

  It was a moving gesture. Jake can attest to that. Whatever can be said against it—that it is merely symbolic, that those minnows might just be caught again later, that it does nothing to change the fact that fishing still goes on every day, that it is at best just a drop in a bucket (or a bucket in the sea)—it doesn’t change the facts. The monks believed in something and they acted out of kindness and compassion.

  When Jake and I talked about it together, though, there was one question we couldn’t get around: The monks had clearly aimed to do a good thing—but could they have done better?

  If their goal was to save a day’s catch of fish from certain death, why not pay the fishermen ahead of time and just tell them to stay home? That would save the fish the trauma of being caught and dragged out of the water in the first place. It would save the fishermen the effort of waking up at dawn to complete the Sisyphean task of catching fish only to see them thrown back. It would save the gas they used to run the boat. And it would save the bait they used too.

  The monks clearly had good intentions, but they may not have found the best way to act on them. Granted, some might argue that this is a relatively minor tragedy, that freeing baitfish is not a dire global concern. But the lesson still stands: We need more than good intentions in order to solve problems. Nowhere is this more relevant than in the fight against world poverty—a truly dire and global concern, in the service of which good intentions are usually the first (and all too often the only) resource to be mustered.

  A Two-Pronged Attack for Fighting Poverty (and Saving Fish)

  It is the best part of us that endeavors to be like the monks, to act out of compassion and do something positive for others. The vast majority of the work being done around the world to fight poverty fits this description, and anything that springs from such a genuinely altruistic impulse should be encouraged.

  But there is a lesson in the monks and their tubful of minnows. Sometimes, even when we have all the good intentions in the world, we don’t find the most effective or most efficient way to act on them. This is true whether we want to save fish, make microloans, distribute antimalarial bed-nets, or deliver deworming pills. What we really need to know is: How can we act with more than good intentions? How can we find the best solutions?

  The only real consensus view on the issue is about the gravity of the problem. Three billion people, about half the world, live on $2.50 per day. (To be clear, that’s $2.50 adjusted for the cost of living—so think of it as living on the amount of actual goods that
you could buy for $2.50 per day in the United States.) In the public dialogue about aid and development—that vast complex of people, organizations, and programs that seeks to alleviate poverty around the world—there are two main competing explanations for why poverty persists on such a massive scale. One camp maintains that we simply haven’t spent enough on aid programs and need to massively ramp up our level of engagement. They point out that the world’s wealthiest nations dedicate on average less than 1 percent of their money to poverty reduction. In their view, we haven’t even given our existing programs a fair chance. The first thing we have to do is give more. A lot more.

  The other camp tells a starkly different story: Aid as it exists today doesn’t work, and simply throwing money at the problem is futile. They point out that $2.3 trillion has been spent by the world’s wealthiest nations on poverty reduction over the past fifty years and ask: What have we accomplished with all that money? With poverty and privations still afflicting half the globe, can we really claim to be on the right track? No, they say; we need a fresh start. The aid and development community as it exists today is flabby, uncoordinated, and accountable to nobody in particular. It’s bound to fail. They argue that we need to pull away resources from overgrown, cumbersome international organizations like the United Nations, wipe the slate clean, and focus instead on small, agile, homegrown programs.