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David Mathers

World Water Day

Currently, a large proportion of the world’s population lacks access to clean and safe drinking water, and this is a major cause of infant mortality in the developing world. Diahorrea is the second largest cause of death worldwide, amongst children under the age of 5, killing around 760 000 a year, and most cases are caused by lack of access to clean drinking water, or lack of proper sanitation (toilets, etc.). (Interventions designed to improve access to clean water, proper sanitation and to improve hygiene are known collectively as WASH interventions.) Further, improved access to clean water and better sanitation and hygiene may help prevent many deaths from other diseases, such as acute respiratory infections, which kill well over a million children every year.

So it is clear that improving access to clean water and sanitation in the developing world has the potential to save very many lives.

So, the ability to provide access to clean water to those who currently lack such access (and to get people to make use of it) has the potential to save many lives. With this in mind, it is incredibly important to know how to design a charitable intervention which actually improves such access. This is much less easy than it sounds. For example, it is one thing to build a new well, but wells can often fall into disrepair relatively rapidly, and clean water can become re-contaminated in various ways after being removed from the well. We need to use evidence to inform our decisions of where to combat these important issues.

Recently there have been some promising preliminary results in randomized clinical trials run by ‘Innovation for Poverty Action’ and ‘Poverty Action Lab’, on the provision of dispensers for chlorine, which sterilisers water, in the developing world. These results have lead to the founding of ‘

’, which we have already looked at in some depth. This intervention seems to avoid many of the problems with other WASH interventions, for example, chlorine remains in the water for up to 24 hours, preventing recontamination in many cases. Our report on this new charity can be found 

Although donations to Dispensers for Safe Water are potentially very high impact, they are not among our highest recommended charities. However, this is one of the most promising charities we have seen in the area of WASH; one which may well prove highly effective (they claim a cost effectiveness ratio of 1 DALY averted per/$67.50 donated), if results from the early Randomised Controlled Trials prove replicable. If you’re looking to donate in recognition of World Water Day, Dispensers for Safe Water looks to be a great investment!

http://www.who.int/mediacentre/factsheets/fs330/en/

An academic reference for this claim is given 

Clasem TF, Roberts IG, Rabie T, Schmidt WP, Cairncross S. (2009) Interventions to improve water

https://www.givingwhatwecan.org/blog/2014-01-28/dispensers-for-safe-water

Carolina Flores

Medical Aid Films: targeting deaths at childbirth

 (MAF) is a young charity which wants to reduce childbirth-related mortality in the developing world by creating and distributing health education films. Taking in account the scale of the problem, interventions in this area have the potential to make a big difference. Is MAF a good opportunity for giving?

The Problem of Newborn and Maternal Mortality

MAF was born out of the experience of midwife Fiona Laird while working for Medecins sans Frontieres in a refugee camp in Darfur. Witnessing newborns and mothers die due to basic mistakes in hygiene, delivery, and care-as basic as cutting umbilical cords with dirty knives-she decided to set up training in the camp. This was tremendously well attended, showing that women were thirsty for education with the potential to save their lives.

The problem Fiona witnessed affects a large portion of the population of the developing world. It is estimated that, every year, over 350 thousand women die as a result of pregnancy and childbirth, and that almost three million newborns die a year - 44 per cent of all under-five deaths. This has been recognized to be a priority: two of the 

 are reducing child mortality and improving maternal health. However, progress has been somewhat disappointing. The aim to reduce child and maternal mortality by two thirds between 1990 and 2015 is still far from being met: as of 2012, these had only dropped 47 per cent, remaining very high in Sub-Saharan Africa and Southern Asia. A staggering 80 per cent of these deaths are considered to be easily preventable by basic medical care and education. It seems, then, that by improving childbirth provision and newborn care, it would be possible to have an extraordinary impact.

A big part of the problem is that in regions where there is a shortage of skilled medical workers, health education is usually unavailable. Medical Aid Films aims to address that lack. Their films teach practices which can increase maternal and newborn health, and being made in collaboration with local production companies, they are adapted for different cultures. Most importantly, a single film can be widely distributed and left in different health and community centres, where it can be watched and re-watched by both health care providers and local women. Other important advantages are that films can overcome lack of literacy and allow for clearer, and possibly easier-to-remember, explanations of the relevant practices.

Since Fiona's trip to Darfur in 2006, Medical Aid Films has produced films on 26 child and female health topics (and translated them into several different languages) and distributed more than 17 thousand copies of these to over 850 partners in 60 different countries. They have made changes to their methods according to the ongoing feedback they receive from the field. Small case studies seem to indicate that the approach has had positive effects.

The most detailed study of the effectiveness of their work conducted so far was an external evaluation by 

 on the Chitambo Film Education Project. This project ran for 12 months in rural Zambia, centred at the Chitambo hospital, which has a catchment area of over 100 000 people over a 90 km radius, and has only one doctor. Maternal and newborn mortality rates are high in the district and only three in ten women deliver their babies in the hospital.

MAF provided films on five different topics and support to staff. The films were screened on portable projectors bi-weekly at the antenatal care clinics at the hospital and during outreach sessions held once a month at 14 rural healthposts. Between March and August, over 2000 people attended screenings (non-unique individuals). Though there was no change in hospital attendance, audiences reported high levels of engagement with the films and changes in individual behaviour of mothers, and health workers claimed that the films had improved the content and quality of health education. Further, hospital staff noted that, without the films, no education would have been provided at the sessions.

Is this an area of intervention with potential for effectiveness?

 looked at different interventions in maternal mortality. Despite the high number of maternal deaths considered avoidable (i.e. which could be prevented by the use of existing technologies) by the 

, they concluded that there was only good evidence for effectiveness for government-level interventions. This has been attributed to providing broad, free access to health services, professionalizing midwives, using data to guide policy-making, and targeting vulnerable groups.

As for specific interventions, no good evidence for effectiveness was found, though some of the programmes studied had positive effects. Give Well investigated training traditional birth-attendants, providing skilled birth attendants, antenatal care, community mobilization, and clean delivery kits.

Of the ones relevant to MAF's work, training traditional birth-attendants was found to have an effect in reducing child mortality and increasing knowledge, but not in reducing maternal mortality. This may be due to lack of medical services to which to refer women with major complications, barriers to learning, and insufficient training to give skills to perform life-saving interventions. Community mobilization was found to be the intervention with the most potential. The study cited attributed a statistically significant reduction of maternal and newborn mortality to setting up facilitator-led groups, though the estimated cost per infant life saved was still higher than for the most effective charities.

These results suggest that tackling the problem may require a broader intervention in the health systems of the affected countries. But they also indicate that MAF is a promising intervention. The fact that films can reach far and stay with the communities allows for a sustainable provision of education, in many cases where there was none before. The films may improve education of un-skilled midwives by transcending language barriers, and they may facilitate community mobilization. MAF also seems committed to improving standards based on feedback, and they are aware of the need to collect more quantitative data before and after their interventions.

http://www.un.org/millenniumgoals/pdf/Goal_5_fs.pdf

http://www.un.org/millenniumgoals/pdf/Goal_4_fs.pdf

http://www.givewell.org/international/technical/programs/maternal-mortality

The Chitambo Film Education Project: Summary of External Evaluation

Suhail Patel

Malaria scales new heights

Researchers have warned that future climate warming could lead to an increase in malaria cases, according to a study published in the journal 

Last week, scientists from the University of Michigan and London School of Hygiene & Tropical Medicine, published strong evidence linking increases in temperature with the movement of malaria to higher altitude areas which have normally been safe from the disease. According to the paper 'The impact of global warming on insect-borne diseases and on highland malaria in particular remains controversial. We provide evidence for an increase in the altitude of malaria distribution in warmer years, which implies that climate change will, without mitigation, result in an increase of the malaria burden in the densely populated highlands.' The study found that when temperatures increase, mosquitos infected with the Plasmodium parasite are able to move to colder areas, whereas before the lower temperatures would slow down both the mosquito and the development of the parasite within it.

As mosquitos are able to move outside the 'malaria belt' due to global warming, densely populated regions of South America and Africa would be left vulnerable to a malaria epidemic. Using records spanning over 15 years from the highland regions of Ethiopia and Colombia, the scientists predicated a three million increase in annual cases if temperatures were to rise by 1.8 degrees Fahrenheit. 'This is indisputable evidence of a climate effect,' said Mercedes Pascual, a disease ecologist at Michigan and one of authors of the 

 paper. 'Our findings here underscore the size of the problem and emphasize the need for sustained intervention efforts in these regions, especially in Africa.'

Sam Donald

Why We (Still) Don’t Recommend Microfinance

Microfinance is the provision of financial services - loans, savings, and insurance - to those living in poverty. Like those in the developed world, the poor benefit from access to financial services through the ability to fund short and long term consumption needs, cope with unexpected shocks to income and expenses, and invest in business or household items (Matin et al 1999). However, the poor have limited access to more formal financial services, and have thus traditionally relied on a range of institutions, which often charge high premiums or interest rates (Matin et al 1999, Steel et al 1997). Microfinance institutions hope to provide access to those services to a wider range of people living in poverty, in the hope that they will benefit from them. The majority of microfinance institutions, charities, and research projects focus on microcredit - the provision of small collateral-free loans to those who cannot usually get access to credit. We shall do the same here, as the profile and scale of microcredit mean it is the most likely recipient of donations within the microfinance category, and there is more evidence for which we are able to judge its effectiveness.

There are three main benefits to microcredit which have been most commonly mentioned. Firstly, small landholders and businessmen can use credit to make investments in their farms/businesses to create a return greater than the cost of the loan, creating a cycle of improvement and growth which brings them out of poverty. These are the case studies most typically cited by microfinance charities, and have an intuitive appeal and logic, as well as fitting well with the 'poverty trap' model espoused by Jeffrey Sachs. Secondly, that the provision of credit can enhance the freedom of those in poverty, by giving them options and choices which were otherwise unavailable to them. Thirdly, that microcredit may empower and enhance the status of women, and improve the allocation of household resources towards women and children.

Although there have been studies which have shown positive effects of microcredit on labour supply, school enrolment, expenditure per capita and non-land assets (Pitt & Khandler 1998, USAID studies in Peru, India, Zimbabwe), others have failed to replicate the results and similar studies have received significantly less favourable results and criticised the methodology and data involved (Duvendack et al 2011). Randomised controlled trials (RCTs), often seen as the gold standard for assessing the impact of interventions (although not without issues) have previously been thin on the ground in the area of microcredit, but they have increased in number over the last year, and the majority of recent studies have shown that as a tool to escape poverty - the most commonly cited benefit of microcredit - it does not perform well. Studies from the past year have found no statistically significant evidence of an increase in socio-economic indicators such as income, consumption, health, and education (despite businesses expanding) after RCTS of microcredit in a variety of countries: Morocco (Crépon et al. 2013), Ethiopia (Tarozzi et al. 2013) Bosnia-Herzegovina (Augsburg et al. 2014), Mexico (Angelucci et al. 2013) and India (Banerjee et al. 2013). This is a conclusion reached by the majority of individual methodologically sound studies, as well as major systematic reviews of the available evidence (van Rooyen et al., Duvendack et al 2011, Banerjee 2013).

Further, while some may benefit from microcredit, there is significant evidence that for some it has potential for harm (van Rooyen et al 2012, Roodman 2012), in a similar manner perhaps to payday loans in the developing world, a 

 which GiveWell have drawn. While some recent studies do not find evidence of harm on income (Angelucci et al. 2013), even they do not find significant positive impact. Even if for many microcredit was a tool to escape poverty (which is far from clear) donors would rightly be concerned about funding an intervention which may actually cause harm to some. Further, some studies have found a decline in school attendance for those aged 16-19 in families who have had access to microcredit as family businesses expand and draw in labour supply from young adults; the long-term consequences of which are uncertain (Augsburg et al. 2014).

The evidence is more supportive of the ability of microcredit to promote the freedom of those in poverty, but it depends on the situation, and again, credit still has the ability to entrap some people through bad luck or bad judgement (Roodman 2012); moreover, in some areas there is evidence of overlending, with some either borrowing too much or borrowing from multiple borrowers (Planet Rating March 2013). A positive effect of microcredit which is related to freedom is that there is fairly strong evidence that microcredit leads to a decline in consumption on 'temptation goods' such as alcohol and tobacco (Banerjee 2013, Banerjee et al. 2013, Augsburg et al. 2014) for reasons that are unclear.

The effect of microcredit on female empowerment had been contested, with some studies finding positive, but non-uniform effects, and other systematic reviews finding they can neither support nor deny the notion that microcredit is pro-women (Duvendack et al 2011). However, the most recent RCTs from the past year have found no evidence of an increase in female empowerment (Augsburg et al. 2014, Tarozzi et al. 2013, Banerjee et al. 2013, Crepon et al. 2013), although we should note the difficulty of measuring such impacts (van Rooyen et al. 2012)

For the above reasons, we cannot recommend microcredit as a good choice for charitable giving. (Given the lack of any conclusive evidence of reliably positive impact, and evidence of some being harmed by microcredit, it is neither worthwhile nor possible to calculate a cost-effectiveness measure of microcredit in order to compare to other interventions). However, there are also other issues which cause us to recommend against microfinance as an avenue for charitable giving at this moment.

Firstly, there is a possibility that better research in the coming years could perhaps reveal which microfinance interventions are the most effective, and create opportunities for giving to microfinance which do have strong, measurable impacts. Indeed, GiveWell recommends the Small Enterprise Foundation as a standout 

, against a backdrop of strong misgivings over 

, suggesting that charities with a commitment to self-evaluation may in the future produce significant, measurable, and repeatable impacts. RCTs from the past year have shifted the balance of debate decisively towards the conclusion that current microfinance initiatives have at best limited effects in experimental studies, and perhaps the next generation of studies will diagnose the reasons for this and design more effective forms of microcredit. Relatedly, there may develop greater opportunities within microfinance in areas other than microcredit, such as microsavings, which has shown promise (Duvendack et al 2011, van Rooyen et al 2012)

Secondly, "microfinance activities and finance have absorbed a significant proportion of development resources, both in terms of finances and people" (Duvendack et al 2011), and have also seen the entrance of many commercial operations. This raises questions over whether there is room for more funding, and even in some areas whether additional funding would result in overlending and actually cause harm, 

Thirdly, GiveDirectly performs a similar role - the only difference being that the 'loan' is not repaid - and has strong 

Despite a strong narrative and intuitive appeal, we cannot recommend microfinance institutions as a recipient of effective-giving. The available evidence finds no statistically significant improvement on poverty-related outcomes or female empowerment (and indeed it may negatively affect some recipients), while the effect on most freedom-related outcomes is varied and inconclusive. Further, microfinance has received significant attention and resources while other less heralded interventions which have shown significant effects have received far less funding. Recent RCTs strongly support the conclusion that the impact of microcredit on poverty is limited at best, and more high-quality research from academia and microfinance institutions is necessary to reveal the effects and pathways more clearly, as well as to inform best practice.

Angelucci, M., D. Karlan, and J. Zinman (2013). Win some lose some? Evidence from a randomized microcredit program placement experiment by Compartamos Banco. Working Paper.

Attanasio, O., B. Augsburg, R. D. Haas, E. Fitzsimons, and H. Harmgart (2013). Group lending or individual lending? Evidence from a randomised field experiment in Mongolia. EBRD Working Paper No. 136.

Augsburg, B., De Haas, R., Harmgart, H., Mehgir, C., (2014). Microfinance at the margin: experimental evidence from Bosnia and Herzegovina. Working Paper.

Banerjee, A. (2013). Microcredit under the microscope: What have we learned in the past two decades, and what do we need to know? Annual Reviews of Economics 5, 487{519.

Banerjee, A., E. Duflo, R. Glennerster, and C. Kinnan (2013). The miracle of microfinance? Evidence from a randomized evaluation. MIT Department of Economics.

Crépon, B., F. Devoto, E. Duflo, and W. Pariente (2013). Estimating the impact of microcredit on those who take it up: Evidence from a randomized experiment in Morocco. Working Paper.

Duvendack, M., Palmer0Jones, R., Copestake, J., Hooper L., Loke Y. and Rao, N., (2011), 'What is the evidence of the impact of microfinance on the well-being of poor people?', August 2011, London: EPPI-Centre, Social Science Research Unit, Institute of Education, University of London

Matin, I., Hulme, D., Rutherford., S (1999). Financial services for the poor and poorest: deepening understanding to improve provision. Finance and development research programme working paper series no. 9. Manchester: IDPM, University of Manchester Pitt, M., Khandker, S., (1998) The impact of group-based credit programmes on poor households in Bangladesh: does the gender of participants matter? Journal of Political Economy, 106 (5): 958-996.

Roodman, D., (2012). Due Diligence: An impertinent inquiry into microfinance. Centre for Global Development

Steel, W. F., Aryeetey, E., Hettige, H. and Nissanke M. (1997), 'Informal Financial Markets Under Liberalization in Four African Counties', World Development, vol. 25, no. 5, pp. 817-830, Elsevier Science Ltd.

Stewart, R., van Rooyen, C., Korth, M., Chereni, A., Rebelo Da Silva, N., de Wet, T., (2012) Do micro credit, microsavings and microleasing serves as effective financial inclusion interventions enabling poor people, and especially women, to engage in meaningful economic opportunities in low and middle income countries. A systematic review of the evidence. London: EPPI-Centre, Social Science Research Unit, Institute of Education, University of London

Tarozzi, A., Desai, J., Johnson, K., (2013), On the impact of microcredit: evidence from a randomized intervention in rurar Ethiopia. Working Paper

Jessica Costello

Measuring benefits

By investing in the most effective charities, we can extend people's lives. We can improve the quality of their lives. Sometimes we can do both. But how do we measure and compare the potential benefits that charities provide, to ensure we are indeed investing in the most effective ones? We use metrics known as Health-Adjusted Life Years (HALYs), which involve the trade-off between duration and quality of health in a single numerical unit. [1] There are two types: Quality-Adjusted Life Years (QALYs) and Disability-Adjusted Life Years (DALYs). These measure health gain and loss, respectively,[2] and as such, may very broadly be considered inverse metrics.[3] Quality-adjusted life years (QALYs) have been used in the assessment of health interventions for three decades[4] as an aid to resource allocation.[5] Although the measure is well-established, the assumptions underlying it are ever debated.[6]

Individuals move through health states over time; these consist of varying levels of functioning within a set of health domains, which may include mobility, cognition, pain, emotional functioning, self-care, and so on.[7] The domains considered are contingent on the instrument used to measure the health state, such as the EuroQol five dimensions (EQ5D) or the Health Utilities Index.[8] Each health state is assigned a certain value (or utility) which is determined by assessing the preferences of a group of individuals for being in any one state (using methods like the standard gamble or time trade-off). A value of zero represents death, while a value of one represents full health. It follows that any state in between (of less than perfect health, e.g. living in a wheelchair) is also assigned a value in between.[4]

A QALY score is obtained by multiplying (or weighting) the amount of time spent in a health state by the utility score assigned to that health state.[4] For example, it takes one additional year of perfect health (utility score of one) to obtain one QALY. It also takes four additional years in a health state valued at 0.25 to obtain one QALY. Again, if the quality of an individual's life is improved by 0.25 over four years, a QALY is gained.

The QALY framework provided a basis for the development of the disability-adjusted life year (DALY) in the early 1990s.[4] The DALY tends to be used in the developing world, and has been widely adopted by the 

. Members of Giving What We Can also use DALYs, and have been involved in designing recent adjustments to the metric.[9] The DALY is primarily a measure of disease burden, and thus relates to an entire disease (rather than a health state, as with the QALY). This burden may be a reduction in full health (such as suffering from malaria, for instance), or even premature death. The DALY thus represents a loss of functioning, and can be thought of as one life year in full health lost.[2]

To determine the number of years lost due to a disease, a weight factor that reflects the severity of the disease on a scale from zero (perfect health) to one (death) is assigned. This is the inverse to the QALY.

When calculating the number of years lost due to premature death, the life expectancy of the afflicted individual would need to be known. As this is not possible, a typical life expectancy is predetermined. Giving What We Can uses a life expectancy of 60 years, which is the typical life-expectancy at birth for the developing countries in which our charities operate.

When calculating the number of years lost due to disability, the severity of the disease state is presented as a percentage of the burden of premature death. For instance, a year of blindness would be considered 60% as burdensome as a year lost.[10]

As with the valuation of health states for QALYs, these weightings may be determined from preference-based studies, or expert valuations. However, controversy exists around the use of these methods to decide that, for instance, a year of blindness should be counted as 60% as burdensome as a year lost, whereas a year of being severely underweight due to malnutrition would be considered 5.3% as burdensome. The DALY metric also allows for optional age weighting and discounting features, which are based on moral assumptions, and as such, are also liable to being debated. The Disability-Adjusted Life Years series by Holden from GiveWell describes these controversies in detail.[10]

QALYs and DALYs face criticisms, which stem from the theoretical assumptions and subjectivity underlying them. Albeit used in different settings, both are measures that combine mortality with morbidity in single numerical units. Some argue that mortality and morbidity are different dimensions that cannot be combined, whereas others advocate the necessity of such criteria to enable resource allocation in a consistent manner, across health states and diseases.[1] As such, the use of QALYs and DALYs, although relatively widespread, remains controversial, and alternative measures continue to be developed.

[1] Robberstad B. QALYs vs DALYs vs LYs gained: What are the differences, and what difference do they make for health care priority setting? Norsk Epidemiologi 2005; 15 (2): 183-191 [2] World Health Organization. The Global Burden of Disease concept. 

http://www.who.int/quantifying_ehimpacts/publications/en/9241546204chap3.pdf

 [Accessed December 2013] [3] Gold MR. et al. HALYS AND QALYS AND DALYS, OH MY: Similarities and Differences in Summary Measures of Population Health. Annu Rev Public Health 2002; 23: 115-134 [4] Sassi F. Calculating QALYs, comparing QALY and DALY calculations. Health Policy Plan. 2006 Sep;21(5):402-8. Epub 2006 Jul 28. [5] National Institute for Health and Care Excellence. Measuring effectiveness and cost effectiveness: the QALY. 

http://www.nice.org.uk/newsroom/features/measuringeffectivenessandcosteffectivenesstheqaly.jsp

 [Accessed December 2013] [6] Seventh Framework Programme. European Assessment Of The Validity Of The Qaly Outcome Measure: The Qaly Controversy: Key Results From The Experiment Conducted By The Echoutcome Project, January 2013 

http://www.reglinkassociates.com/Articles/echoutcome0113.pdf

 [Accessed December 2013] [7] Chatterji S. et al. Global Programme on Evidence for Health Policy Discussion Paper No. 45: The conceptual basis for measuring and reporting on health. 2002. 

http://www.who.int/healthinfo/paper45.pdf

 [Accessed December 2013] [8] Whitehead SJ. et al. Health outcomes in economic evaluation: the QALY and utilities. Br Med Bull 2010; 96 (1): 5-21. doi: 10.1093/bmb/ldq033 [9] GWWC members Nick Beckstead, Nir Eyal, Toby Ord, and Thomas Pogge were amongst philosophers asked to advise on ethical aspects of the DALY measure at the recent Critical Ethical Choices for DALYs meeting, convened by the World Health Organisation and World Bank in preparation for publication of the 2010 Global Burden of Disease Report.} [10] Holden. The GiveWell Blog. Series: Disability-Adjusted Life Years. 

http://blog.givewell.org/2008/08/07/disability-adjusted-life-years-introduction/

Andreas Mogensen

Why we (still) don’t recommend GiveDirectly

 This article hasn't been updated recently. We're keeping it up for the historic record of the debate, and because people still seem to refer to the arguments. Giving What We Can no longer actively conducts charity evaluation. We recommend you 

read GiveWell's latest research on GiveDirectly

 is a charity founded in 2008 that provides unconditional cash transfers to households in extreme poverty. GiveDirectly is currently among 

's top recommended charities, but doesn't feature on our own list of recommended charities. In this post, I'll explain why we haven't changed our mind about GiveDirectly since we last addressed the issue in late 2012. In particular, I'll discuss the results of a recent randomized control trial (RCT) from November 2013, which some have taken to answer skepticism about unconditional cash transfers[1]. While generally positive, the results of this RCT also provide evidence that transfers are less cost-effective than was indicated by estimates made by GiveWell when we last commented on their recommendation. It goes without saying that we have great admiration for GiveWell's work, and much of our own research is heavily indebted to theirs[2]. However, on this point we continue to respectfully disagree.

At present, GiveDirectly operates in Kenya and Uganda. Transfers are targeted at the very poorest, and GiveDirectly employs a detailed selection procedure to identify the worst-off households. Within villages, these are selected based on homes of mud and thatch that lack metal roofs[3]. Marginal donations to GiveDirectly go toward cash grants, as operating costs are independently funded by large donors. Transfer costs absorb approx. 10% of donations, meaning that roughly 90% of the amount given ultimately reaches recipients[4]. Cash transfers are a well-studied intervention-type, beginning with highly encouraging results obtained in a randomized trial of the Mexican Progresa programme[5]. Within the field of cash transfers, GiveDirectly's programme has two distinctive features.

Firstly, transfers are unconditional: recipients are not obligated to spend their transfer in any way, and receipt of further instalments is not dependent on meeting goals associated with, say, children's education or health (as in the Progresa programme). Secondly, relative to other cash transfer programmes, the amounts transferred are large. Households receive approx. $1,000 (in instalments) over the course of a year[6]. By way of comparison, this represents approx. 55% of median household income[7]. The same amount of money could be used to supply long-lasting insecticide-treated nets to more than 160 people[8] and provide deworming treatment to more than 1,000 children[9]. Although cash transfers are well-studied, there is relatively little direct evidence on the impact of large, unconditional transfers of this kind. However, there does exist a recent, well-designed, pre-registered RCT that examines short-term impacts from GiveDirectly's own programme. Results from this trial were reported in a policy brief by Johannes Haushofer and Jeremy Shapiro released in November of 2013[10].

GiveDirectly appeared on GiveWell's list of top recommended charities in the winter of 2012, ranked above Schistosomiasis Control Initiative (SCI) and below Against Malaria Foundation (AMF). At the time, GWWC Vice President William MacAskill offered a broad range of considerations explaining our skepticism about GiveWell's recommendation and our continuing decision to preferentially recommend health charities[11]. Will noted a number of general considerations that should lead us to assign low prior confidence to the idea that cash transfers are more cost-effective than the best health programmes. In addition, he pointed to the paucity of evidence on the impact of large, unconditional transfers and expressed surprise at what he regarded as a lack of concern for cost-effectiveness underlying GiveWell's recommendation.

At the end of 2013, GiveDirectly maintained its status among GiveWell's top-recommended charities. GiveWell no longer explicitly ranks its charities, though senior staff members' personal donation-decisions suggest they regard GiveDirectly as the best option for giving[12]. GWWC has maintained its position on GiveDirectly. Maintaining our position requires some explanation in light of the results reported by Haushofer and Shapiro, which go some way to addressing Will's earlier concern about paucity of evidence. Ultimately, disagreement between GiveWell and GWWC on GiveDirectly reflects more fundamental methodological divisions. GWWC places greater weight on explicit estimates of charity cost-effectiveness, which GiveWell regards with more skepticism[13]. Consequently, GiveWell's recommendations lend greater weight to assessments of organizational virtues, such as transparency, self-monitoring and evaluation, etc. Our own recommendations weight organizational virtues to the extent that they provide reason to believe that an organization can reliably deliver an intervention whose cost-effectiveness can be pre-established with reasonable certainty. GiveWell's own cost-effectiveness estimates suggest that GiveDirectly's wealth transfers are less effective than deworming[14]. What we believe about GiveDirectly depends, ultimately, on the weight we give to cost-effectiveness estimates of this kind. Our recommendations lend them more weight than GiveWell's. There is thus a deeper controversy, which we can't hope to resolve here. Instead, I'll confine my discussion to explaining why the results reported by Haushofer and Shapiro haven't changed our minds.

A randomized control trial of wealth transfers

Haushofer and Shapiro conducted a randomized control trial in the Rarieda district of western Kenya in 2011-2012. Whereas our information about charity cost-effectiveness typically relies on evidence regarding the cost-effectiveness of the type of programme being carried out, Haushofer and Shapiro directly assess GiveDirectly's own work, albeit with one qualification. GiveDirectly's transfers are typically worth approx. $1,000. However, only about a quarter of households received transfers of this size, with the remainder receiving approx. $300. The aim here was to assess the impact of transfer size on key variables (described below). However, the overall results of the study are often reported in a manner that averages across both groups and doesn't easily allow us to look within treatment conditions[15]. Haushofer and Shapiro looked at 8 key variables: total assets; total consumption; food security; agricultural and business income; health; education; psychological well-being; and female empowerment. Overall, the results were encouraging, with recipients of larger transfers showing greater improvements. However, some key variables showed no significant positive impact.

Recipients chose toinvest a significant fraction of their transfer, in livestock, furniture, and home improvements. The total value of their asset holdings increased by USD PPP 279 on average, representing a 58% increase over the control group. Relative to controls, recipients of transfers were 23 percentage points more likely to own an iron roof (16% vs 39%); Haushofer and Shapiro estimate a 7-14% return on investment (ROI) for iron roof purchases, as this obviates the need to make periodic, costly repairs of thatched roofs.

Cash transfers increased all categories of consumption, except for temptation goods, such as alcohol and tobacco, with a 19% increase in food consumption relative to controls. Food security increased significantly in transfer recipients, reducing the likelihood that respondents had gone to bed hungry in the previous week by 7 percentage points and the number of days children had gone without food by 42%.

Revenues from agriculture and business increased, though there was no significant increase in profits. Transfers did not significantly increase indices of health and education. Transfer recipients reported subjective well-being greater than that of controls by 1/5th of a standard deviation, though measures of the stress hormone cortisol were not significantly lower than in controls. Female empowerment increased significantly, as measured by attitudes toward women and reports of spousal abuse.

Some variables show 'spill-over' effects, estimated by comparing non-recipient households within villages where some households received transfers with households in villages where no households received transfers. Psychological well-being and female empowerment showed positive spill-over effects. Positive spill-over effects on psychological well-being are especially welcome in this context, as one worry regarding wealth transfers is that they might create resentment among non-recipients. There was some evidence for a negative spill-over effect on consumption, but this was only statistically significantly at a 10% level. Haushofer and Shapiro found that transfers had no impact on the general village-level economy.

The study comes with some limitations. With the exception of cortisol levels, all data is self-reported. This may raise the worry that positive results are driven by recipients' desire to report encouraging results that please experimenters - especially given that measures of cortisol did not accord with self-reported gains in well-being. We're not especially inclined to discount the results on this basis, however, because self-reported results also show no significant impact for a number of key variables, including business profits, health, and education. As Haushofer has noted, the mixed nature of the results provides evidence for internal validity[16]. The more significant limitation is the inability of this study to assess long-term impacts. It is far from implausible that significant positive impacts on business profits, health, and education emerge over longer time-scales.

We have never seriously doubted that cash transfers could make improvements in the lives of poor people in the developing world. The only question concerns whether the size of these benefits are comparable to those attained by our recommended charities. In this respect, GiveWell have done a fantastic job in describing models that allow us to compare the cost-effectiveness of deworming and wealth transfers. One such model was described in late 2012[17], and the most recent came out at the end of 2013[18].

The key thing we'll note here is that the estimate produced in 2012 relied on assumptions about cash transfers that appear to have been too optimistic in light of results reported by Haushofer and Shapiro. Therefore, we don't regard these results as providing sufficient reason for us to revise the position we had at that time. Updated in light of other evidence from 2013 indicating lower effectiveness of deworming[19], GiveWell's own estimates continue to indicate that deworming is more effective than cash transfers by roughly the same factor.

Deworming and wealth transfers can be compared by thinking of deworming as an investment that pays off in terms of greater future earnings; the present value of these earnings can be compared with that of investments made by recipients of cash-transfers, primarily in terms of purchases of metal roofs. The case for deworming as a source of greater income in adulthood rests principally on two studies. Based on a retrospective survey from hookworm eradication in the American South, Hoyt Bleakley (2007)[20] predicted that deworming during childhood should raise incomes by over 20% in adulthood in Sub-Saharan Africa; Sarah Baird and colleagues (2011)[21] subsequently obtained evidence from deworming programmes in Kenya that confirm this prediction[22].

Comparing deworming and wealth transfers in this way depends on a number of key assumptions such as the discount rate, the external validity of the results reported by Baird et al., the return on investment for cash transfers, etc. for which different staff members have offered different estimates. The estimates made by GiveWell in late 2012 turned out to be optimistic in two respects.

The first concerns the return-on-investment, though here only some estimates may be thought too high. ROI was originally estimated at 10%, 25%, 5%, or 54%, depending on the person surveyed. As noted, Haushofer and Shapiro estimated a 7-14% ROI for investment in roofs. Business investments showed no significant evidence of increasing profits and thus provide no evidence of additional returns on investment. However, the latter point may simply reflect the short-term nature of the study.

The more significant overestimate concerned the proportion of transfers invested, estimated in 2012 at 75%. Haushofer and Shapiro report that recipients invested $PPP 278 on average, with recipients of larger transfers investing more than recipients of modest transfers by $PPP 253. This suggests that recipients within each group invested approx. 30% of the amount received. Of the $PPP 278 invested on average, $PPP 85 went to livestock, $PPP 53 on durable goods such as furniture and agriculture appliances, and $PPP 10.22 was saved. This may suggest that less than half of invested funds went into purchasing iron roofs.

Although the results obtained by Haushofer and Shapiro may be thought to significantly help the case for large, unconditional cash transfers - and certainly address earlier concerns about paucity of evidence - they are less positive in other respects, particularly when compared with estimates available when we last addressed the value of cash transfers. Ultimately, we don't feel that these results have tipped the balance in favour of GiveDirectly.

[1] See the discussion of these results in The Economist: 

http://www.economist.com/news/international/21588385-giving-money-directly-poor-people-works-surprisingly-well-it-cannot-deal

 [2] We'd also like to thank GiveWell for comments on a previous draft of this post, which helped to clarify a number of important points for us. [3] 

http://www.givedirectly.org/howitworks.php#

http://www.givedirectly.org/financials.php

 [5] Banerjee & Duflo Poor Economics, pp. 78-81 [6] 

 [7] For median household income figures see: 

http://www.gallup.com/poll/166211/worldwide-median-household-income-000.aspx#2

 [8] Assuming a cost of approx. $6 per net distributed. 

http://www.givewell.org/international/top-charities/AMF#Costperlifesaved

 [9] Assuming a cost of less than $1 per child dewormed. 

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