Tackling psychosocial and capital constraints to alleviate poverty.

Many policies attempt to help extremely poor households build sustainable sources of income. Although economic interventions have predominated historically1,2, psychosocial support has attracted substantial interest3-5, particularly for its potential cost-effectiveness. Recent evidence has shown that multi-faceted 'graduation' programmes can succeed in generating sustained changes6,7. Here we show that a multi-faceted intervention can open pathways out of extreme poverty by relaxing capital and psychosocial constraints. We conducted a four-arm randomized evaluation among extremely poor female beneficiaries already enrolled in a national cash transfer government programme in Niger. The three treatment arms included group savings promotion, coaching and entrepreneurship training, and then added either a lump-sum cash grant, psychosocial interventions, or both the cash grant and psychosocial interventions. All three arms generated positive effects on economic outcomes and psychosocial well-being, but there were notable differences in the pathways and the timing of effects. Overall, the arms with psychosocial interventions were the most cost-effective, highlighting the value of including well-designed psychosocial components in government-led multi-faceted interventions for the extreme poor.

Toward a science of delivering aid with dignity: Experimental evidence and local forecasts from Kenya.

How can governments and nonprofits design aid programs that afford dignity and facilitate beneficial outcomes for recipients? We conceptualize dignity as a state that manifests when the stigma associated with receiving aid is countered and recipients are empowered, both in culturally resonant ways. Yet materials from the largest cash transfer programs in Africa predominantly characterize recipients as needy and vulnerable. Three studies examined the causal effects of alternative aid narratives on cash transfer recipients and donors. In study 1, residents of low-income settlements in Nairobi, Kenya (N = 565) received cash-based aid accompanied by a randomly assigned narrative: the default deficit-focused "Poverty Alleviation" narrative, an "Individual Empowerment" narrative, or a "Community Empowerment" narrative. They then chose whether to spend time building business skills or watching leisure videos. Both empowerment narratives improved self-efficacy and anticipated social mobility, but only the "Community Empowerment" narrative significantly motivated recipients' choice to build skills and reduced stigma. Given the diverse settings in which aid is delivered, how can organizations quickly identify effective narratives in a context? We asked recipients to predict which narrative would best motivate skill-building in their community. In study 2, this "local forecasting" methodology outperformed participant evaluations and experimental pilots in accurately ranking treatments. Finally, study 3 confirmed that the narrative most effective for recipients did not undermine donors' willingness to contribute to the program. Together these studies show that responding to recipients' psychological and sociocultural realities in the design of aid can afford recipients dignity and help realize aid's potential.