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.

Development economics. A multifaceted program causes lasting progress for the very poor: evidence from six countries.

We present results from six randomized control trials of an integrated approach to improve livelihoods among the very poor. The approach combines the transfer of a productive asset with consumption support, training, and coaching plus savings encouragement and health education and/or services. Results from the implementation of the same basic program, adapted to a wide variety of geographic and institutional contexts and with multiple implementing partners, show statistically significant cost-effective impacts on consumption (fueled mostly by increases in self-employment income) and psychosocial status of the targeted households. The impact on the poor households lasted at least a year after all implementation ended. It is possible to make sustainable improvements in the economic status of the poor with a relatively short-term intervention.

Being surveyed can change later behavior and related parameter estimates.

Does completing a household survey change the later behavior of those surveyed? In three field studies of health and two of microlending, we randomly assigned subjects to be surveyed about health and/or household finances and then measured subsequent use of a related product with data that does not rely on subjects' self-reports. In the three health experiments, we find that being surveyed increases use of water treatment products and take-up of medical insurance. Frequent surveys on reported diarrhea also led to biased estimates of the impact of improved source water quality. In two microlending studies, we do not find an effect of being surveyed on borrowing behavior. The results suggest that limited attention could play an important but context-dependent role in consumer choice, with the implication that researchers should reconsider whether, how, and how much to survey their subjects.