More Than Good Intentions by Karlan and Appel: Book Review

Kris Gulati reviews Dean Karlan and Jacob Appel’s book “More Than Good Intentions”. He argues that the argument the book proposes has a lot to offer to the world of international development. He advises that this thinking is one which should be encompassed by all development practitioners. Extending the authors thesis leads Kris to consider the prospect that small NGOs offer us an inefficient solution in the battle against global poverty.

The developed world spends billions on foreign aid. Yet questions about the effectiveness of aid still lingers on people’s minds. Indeed one of the first debates which those new to international development encounter is between Sachs (pro-aid) and Easterly (anti-aid).

Karlen and Appel transcend this debate. Instead they seek out proven methods which alleviate poverty and scale these up. Faced with limited resources, we need to know the most efficient and effective development interventions. Once known, we should expand these to those in most need. As the title reveals, we need more than good intentions. This approach/philosophy is inspired by Peter Singers’ approach: effective altruism. That is altruistic intentions are not enough. We need to utilise evidence and reason in order to provide the largest amount of utility to the poorest. Utilitarian logic based upon compassion.

The book strays away from a mainstream economics approach, which axioms stand upon the flawed notion of perfectly rational individuals. Instead of fallacious depictions of humans as economic creatures or “Econs”, the authors utilises modern behavioural economics, which understands humans for what they are, departing from the hypothetical and abstract theories envisioned by some economists. Once this is understood, interventions can be tailored to how humans actually behave.

 

 

©BankSimple/Creative Commons License

©BankSimple/Creative Commons License

 

An example used in the book is that sex sells! Economists have only recently caught up to their marketing/advertising colleagues. Karlan and Appel found that when using a photo of a pretty woman when advertising for microfinance schemes, it had the same impact as reducing interest rates by 40%! This example shows the vast potential that behavioural economics has to offer.

The brilliant Harvard economist Sendhil Mullainathan also describes a problem which the development community often struggle to overcome. He calls it the “last mile problem”. That is we employ great minds to solve problems. These great minds find the solutions and complete 999 miles out of 1000 in the journey. The journey is not complete because the last mile is to ‘sell’ the solution to end-point users. This is a skill that development agencies/practitioners are not always equipped with, nor one that they always deem necessary. For example, two million children die from diarrhoea each year. We have solved the problem through oral rehydration therapy, which can be administered for next-to-nothing. Yet people still die daily because of our failure to engage with end-point users. End-point users need to feel enticed enough to seek out the solutions that the development community painstakingly created.

Thus, we must tailor our solutions to account for irrational behaviours. For example, it is irrational to be locked in to a savings bank account. Why would someone refuse the freedom to spend? However, irrational human behaviour means that sometimes we do spend money, despite wanting to save. Forcing people to save helps those in developing countries (and the developed world) to save. Understanding human behaviour with greater clarity allows practitioners to tweak and adjust programmes which allows for greater effectiveness.

To seek out effective programmes the authors call for more rigorous monitoring and evaluation programmes. A clear and coherent argument is made for the need to stop using the before and after method of evaluating programmes. This is because measuring the effectiveness of a programme by using snapshots of before and after interventions does not measure extraneous variables, which can dramatically alter the results. It is bad science. In fact it’s so bad, that the authors suggest that an organisation should scrap the before-after analysis altogether and instead just provide more services, if faced with no other evaluation choices. What Karlan and Appel propose is the gold-standard of research, the RCT (Randomised controlled trial).

©DIVatUSAID/Creative Commons License

©DIVatUSAID/Creative Commons License

 

“The power of an RCT lies in its ability to give an objective unbiased picture of the impact a program has on its participants… Simply put, measuring impact means answering (At least) one simple question: How did people’s lives change with the program, compared to how they would have changed without it?”

RCT’s provide rigorous and reliable results and should be incorporated into monitoring and evaluation programmes wherever possible.

The book provides a simple and effective message. It’s easy to read, filled with case studies (which I haven’t touched upon in this review), and can be read by someone who is completely new to issues of poverty and development. It is an enlightening read and I would recommend it.

It triggered me to ponder the effectiveness of small NGOs (non-governmental organisations). Many people have their own NGOs. Indeed many of my friends run small-scale NGOs with the greatest of intentions and genuine compassion. However, this book makes me think that in the majority of cases, the logic of the book would seem to suggest that many of the world’s NGOs and charities should willingly shut themselves down and donate their money to more effective and efficient organisations (Oxfam may be an example). Think of the high administration costs (not always a bad thing), lack of expertise compared to larger organisations, inability to utilise economies of scale, and the lack of using a tried-and-tested method.

This may sound cruel, but ultimately it’s for the greater good. It seems an interesting idea or research question to ponder on, and I would be interested in hearing your opinions in the comments section or tweet me @krisgulati.


The views expressed in this article are those of the author and do not necessarily represent the views of Development in Action.

***

Have an opinion on this or another topic? Why not write for our blog? Click here to find out more and get in touch.