NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, January 25, 2017

It seems like a no-brainer. Before you spend big bucks on a massive effort to improve life for the world’s poorest — say, distributing millions of free bed nets against malarial mosquitoes, or offering thousands of women microloans as small as $200 to start small businesses — you should run a smaller scale test to make sure the idea actually works. After all, just because a project sounds good in theory doesn’t mean it’s going to pan out in practice.

For instance, what if giving out the bed nets for free makes people less likely to value them? Maybe you should charge a fee on the theory that while less people would get the nets, those who do will be the ones who see a need for them and will therefore take the trouble to actually use them.

And what if some totally different method wouldn’t achieve better results for less money? For instance, maybe the key to lifting women’s incomes isn’t helping them start a small business but helping them land a salaried job?

Yet for decades, questions like this have been left unanswered. Instead health and development aid for the world’s poorest has largely been designed based on what seems reasonable, rather than what can be proved with hard evidence.