Thursday, July 23, 2020

Randomised Control Trials and the Alleviation of Poverty in India

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Sattva Vasavada

Article Title

Randomised Control Trials and the Alleviation of Poverty in India

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Global Views 360

Publication Date

July 23, 2020

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Poverty in India — A Representative Image

Poverty in India — A Representative Image | Source: Atul Kumar via Unsplash

Abhijit Banerjee and Esther Duflo won the 2019 Nobel Prize in Economics for their “experimental approach in alleviating global poverty”. Their experimental approach encompassed a variety of novel methods to understand and analyse interventions and Randomised Control Trials (RCTs). Their research has been used by policy makers to make informed policy decisions to best help the marginalised.

What are RCTs?

To understand the effect of a policy, intervention, or medicine, decision makers try to measure the efficacy of the treatment. Do deworming pills given to children improve test scores? Does providing chlorinated water improve the health and economic outcomes of villages? These are some causal (read causal, i.e. caused by, not casual) questions researchers are interested in. The best way to analyse causal effects is to randomise the selection of people in the treatment and the control group (for example: children who are given deworming pills versus children who are not given the pills). This random selection of the two groups removes many statistical biases that might affect the results.

RCTs in India:

Many of the RCTs performed by Banerjee and Duflo were in India. They involved short- and long-term impact assessments of various interventions, policies, models, and treatments. We look at a few RCTs implemented in India:

Teacher absenteeism rates:

Troubled by the low attendance rates (or high absence rates) of public-school teachers in India, Duflo assessed the impact of financial incentives on the absence rates of teachers in Rajasthan. The study monitored teacher attendance by cameras, which was tied to a financial incentive if the attendance was high. From a baseline absence rate of 44%, teacher absenteeism in the treatment group fell by 21%, relative to the control group. High teacher attendance caused child test scores to improve too.

COVID-19 and health-seeking behaviour:

In the context of COVID-19, Banerjee tested the effect of sending messages via SMS that promoted health preserving behaviour. The results were very positive. By sending a short, 2.5-minute clip to 25 million randomly selected individuals in West Bengal, the intervention i) found a two-fold increase in symptom reporting to village health workers, ii) increased hand washing rates by 7%, and iii) increased mask-wearing by 2%. While mask-wearing rates increased only marginally, the spillover effects (wearing a mask stops the virus from infecting more people) were moderately high and positive.

Asset Transfers and the Notion of Poverty:

An RCT by Banerjee in West Bengal involving a productive asset transfer accompanied with training found large and persistent effects on monthly consumption and other variables. The treatment group reported 25% higher consumption levels relative to the control group, who did not receive the asset transfer and training. Implications of such RCTs are huge. The notion that the poor are lazy and unwilling to perform strenuous labour is falsified by this RCT. Often, what the poor lack are opportunities that are hard to come by, given their financial status. A small nudge, like the asset transfer, can cause large and positive effects on their well-being.  

Salt fortification to reduce anaemia:

RCTs also help rule out less cost-effective interventions. Duflo and Banerjee evaluated an RCT which distributed fortified salt in 400 villages of Bihar, to reduce the prevalence of anaemia. However, this intervention found no statistically significant impact on health outcomes like anaemia, hemoglobin, etc.  Thus, while RCTs help introduce novel methods of impacting the lives of the poor, they also help in ruling out in-effective measures. A policy maker might try other alternatives to reduce the prevalence of anaemia.

Are RCTs the gold standard?

Maybe. Extrapolating results from a regional RCT to national policies could present problems. Contextuality matters. A study that indicates positive gains for one region might present different, and rather adverse effects for another region. Nation wide effects might not be as prominent as regional results of a single RCT. The good part is that Banerjee and Duflo have a solution. Just perform more RCTs!

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February 4, 2021 4:39 PM

Bedrock of US Democracy: Checks and Balances of Governing Branches

When the American Revolution ended in 1783, the United States Government was in a state of flux. The founding fathers (George Washington, Thomas Jefferson, Benjamin Franklin, John Adams, Alexander Hamilton, John Jay, and James Madison) did not want to establish another country that was ruled by a king. The discussions were centered on having a strong and fair national government that protected individual freedoms and rights and did not abuse its power. When the new Constitution was adopted in 1787, the structure of the infant government of the United States called for three separate branches of government, each with their powers and systems of checks and balances. This would ensure that no one branch would become too powerful because the other branches would always be able to check the power of the other two. 

The legislative branch is described in Article 1 of the US constitution. It has 100 US senators (two for each state), and 435 members in the House of Representatives, which is better known as the US Congress. Making laws is the primary function of the US Congress, but it is also responsible for approving federal judges, US Supreme Court justices, passing the national budget and declaration of war.

The executive branch is described in Article 2 of the US Constitution. The leaders of this branch of government are the President and the Vice President. They are responsible for enforcing the laws the Congress sets forth. The President works closely with a group of advisors known as the Cabinet. They assist the President in making important decisions within their areas of expertise, like defense, the treasury and homeland security. The executive branch also appoints government officials, commands the armed forces, and meets with leaders of other nations. 

The third branch of the US government is the judiciary and is detailed in Article 3. This branch comprises all the courts in the land, from the federal district courts to the US Supreme Court. These courts interpret the nation's law and punish the ones who break them. The Supreme Court settles disputes amongst states, hears appeals from states and federal courts and determines if federal regulations are constitutional. 

Separation of powers in the United States is the backbone of the Checks and Balances System which provides each branch of the government with special powers to check the other branches and prevent any branch from becoming too powerful. Congress has the power to make laws; the President has the power to veto them, and the Supreme Court may declare the laws as unconstitutional. If both the houses of the Congress have a ⅔ majority, they can override the President's veto. The idea of checks and balances is that it is not enough to separate the powers and guarantee the independence of three branches but also that each branch needs to have the constitutional means to protect the system in case of overreach by any other branch. 

 The Check and Balances system also provides the branches with special powers to appoint or remove members from other branches. Congress (Senate and House of Representatives) can impeach or convict the President of high crimes like bribery or treason. The House of Representatives has the power to bring impeachment charges against the President, and the Senate can convict and remove the President from office. Supreme Court candidates are appointed by the President and confirmed by the Senate. Judges can also be removed by impeachment in the House of Representatives and conviction in the Senate. 

The legislative branch, which consists of the Senate and House of Representatives, passes bills, controls the federal budget, and has the power to borrow money on credit on behalf of the United States. It also has the sole authority to declare war, as well as to raise and regulate the military. It oversees, investigates and makes rules for the government and its officers. The Senate can ratify treaties signed by the President and give advice and consent to presidential appointments to the federal judiciary, federal executive departments and other posts. It also has the sole power of impeachment (House of Representatives) and trials of impeachment (Senate). 

The executive branch consists of the President and the Cabinet. The President is the commander-in-chief of the armed forces, executes the instructions of the Congress, may veto bills passed by Congress (but the veto may be overridden by a two-thirds majority of both houses), perform the spending authorized by the Congress, declare emergencies and publish regulations and executive orders. They make executive agreements which do not require ratification and sign treaties, which require approval by the ⅔ of the Senate. They also have the power to make a temporary appointment during the recess of the Senate and can grant "reprieves and pardons for offenses against the United States, except in cases of impeachment."

The Judiciary determines which laws Congress intended to apply in any given case, exercise judicial review and review the constitutionality of laws, determines how Congress meant the law to apply to disputes and determines how laws should be interpreted to assure uniform policies in a top-down fashion via the appeals process.

The system of Checks and Balance was designed and implemented by the founding fathers with such diligence that even after more than 225 years, it is still effective in preventing undue outreach by one of the three branches.

Note: Sites that have been referred to: 

  1. https://www.law.cornell.edu/wex/separation_of_powers_0
  2. https://avalon.law.yale.edu/18th_century/fed48.asp
  3. https://www.britannica.com/topic/Congress-of-the-United-States
  4. https://www.britannica.com/topic/House-of-Representatives-United-States-government
  5. https://www.britannica.com/topic/Constitution-of-the-United-States-of-America
  6. https://www.britannica.com/topic/executive-government
  7. https://www.britannica.com/topic/checks-and-balances
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