Why 'Does Aid Work?' is the Wrong Question to Ask

Discussion with Dean Karlan
I have invited Dean Karlan to this class to talk about effective solutions to global poverty problems. Dean is a professor of economics at Yale University and he is also the founder and president of Innovations for Poverty Action (IPA). IPA evaluates poverty programs to figure out what works and what does not work in sectors such as microfinance, education, health and agriculture.

As you will see in these videos, Dean claims that aid critics often respond to the wrong question. One should not ask “is aid, as such, effective?” Rather, the question should be whether particular aid programs help reduce poverty or not. To figure that out, Dean argues, you have to study specific interventions on the ground, and ask both if and why they work.

In our conversation, Dean gives a number of examples of the type of questions that he and his colleagues at IPA asks, and the types of programs they study. For instance, will malaria prevention work best if people are given insecticide treated bed nets for free, or if they buy them? What is the most effective way to lift the poorest of the poor out of poverty—microcredit or insurance? How well does a program that provides different types of support, for instance both a productive asset and life coaching, do in bringing a family out of poverty? Our conversation touches on all of these issues, as well as how Dean and his fellow researchers at IPA design their studies in order to get reliable answers to questions about poverty interventions.