Solution to Poverty

The concept that a little bit of hope is all that is needed to make a difference in the lives of the poorest of the poor may sound like it has been dreamed up by an unrealistic activist. However, this was the core of a recent Harvard University lecture by economist Esther Duflo. Duflo argues that certain effective anti-poverty programs provide more than simple resources – they also give the poor the opportunity to hope for more than simply survival.

The center of Duflo’s study was an anti-poverty program in West Bengal, India, operated by BRAC, a microfinance institution. Those in abject poverty were thought to be unable to repay a loan, so BRAC offered each of them a productive asset instead, such as a goat, cow or some chickens. They were also provided with weekly training that taught them how to care for their assets. BRAC was hoping that the animals would provide a sustainable source of income for the poor, and that they would become better at managing their own assets.

The results of the program went far beyond this, however. Months after the program ended, the participants were still eating and earning 20% than others in their community, and saving extra money. The increases in income were larger than could be explained by simply the sale of animal products – so what happened?

poverty

Photo source: http://www.flickr.com/photos/hulagway/4677471782/

Duflo found that the program recipients were working 28% more hours than the control group. In addition, the beneficiaries had dramatically lower rates of depression. According to Duflo, the effects were due to an injection of hope by the BRAC project.

This is not an entirely new idea – it has long been thought by development economists that the poor may remain poor because they feel that any investment they are able to make will not make enough of a difference. For example, people may reject feasible ideas of improvement in the fear of losing the little that they already own.

In addition, the poor may believe they are trapped in their situation, even when this is not true. Studies have shown that poor parents believe that schooling is only beneficial if you are able to complete secondary school – and so if they cannot pay for their children to complete their schooling, they may not send them to school at all. Economists have discovered, however, that each year of education adds substantially to an individual’s earning potential.

It can be surprising what adds hope to a community. In India, a law stated that a woman must be elected to the post of village council head in some villages. The effects on the education of girls were clear – when Duflo followed up several years later, she found that just a few years of exposure to a female leader had lead to some degree of equality between boys and girls. Whereas in the past, girls received far less schooling and were expected to stay at home and obey their in laws and husbands, the female role models in the village seemed to lead to a sense of hope for life beyond domesticity.

Founder of Edictive Serge is a seasoned film production professional as well as a leading technology project management thought leader in the field.

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