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 5:09 PM

Beirut Port Blast: What lies ahead for Lebanon?

The year 2020 will be remembered as the year of disasters in the history of humankind. A devastating tragedy struck Beirut, the capital of Lebanon on August 4, 2020, in the form of a massive explosion which occurred in the port area and ripped a large part of the town .

As per initial estimate the death toll stands at 157 with more than 5000 people severely bruised and thousands displaced from their homes. The incredible force of the blast could be felt as far as Cyprus, which is at a distance of 250 kms from the explosion site.

A giant red cloud of smoke erupted in the clear skies followed by a deafening ‘bang’ and smashing of windows. "First we heard one sound. Seconds later there was a big explosion. All hell broke loose and I saw people thrown five or six metres" said Ibrahim Zoobi, who worked near the port. Satellite images show that warehouses and buildings within a radius of 2km from the site of the blast were completely destroyed, ending up in debris.

The intensity of the blast was equivalent to almost ‘2.2 kilotons of TNT’, according to an analyst and weapons expert. The aftermath included scenes of jam-packed hospitals, running without proper electricity connection, increased demand of blood donations and generators and agonized cries of people searching for their loved ones amongst the rubble filled roads.

Michel Aoun, the President of Lebanon | Source: Wikimedia

American President Donald Trump was quick to tweet about calling the blast a ‘terrible attack’. However, according to Michel Aoun, the President of Lebanon, the actual culprit of the blast was the 2,750 tonnes of fertilizer, ammonium nitrate, stored in one of the warehouses in the port area which caught fire. This explosive material was reportedly confiscated from a Russian cargo ship, back in 2014, when it made an uninformed stop at the Lebanese port.

Ammonium nitrate is a white substance used as a fertilizer as well as an explosive. It cannot explode on coming in contact with air but can detonate immediately as it encounters a flammable substance like oil or fire. Being an oxidiser, it will accelerate the severity of the explosion and also lead to release of toxic gases like nitrogen dioxide.

Boaz Hayoun, one of the top bomb experts of Israel, states “Before the big explosion, in the center of the fire, you can see sparks, you can hear sounds like popcorn and you can hear whistles”, which is a strong indication of fireworks. This might point towards seemingly inadequate warehouse management issues in Beirut, as such substances might have come across the explosive nitrates and instigated the blast. The safety protocols were simply not followed, despite being aware about the presence of a ‘ticking time bomb’ in the warehouse.

As Beirut is fighting the COVID-19 pandemic and a financial crisis, it was definitely not ready for another blow. Beirut’s grain storage tower, the largest in Lebanon, was also engulfed in the flames, hampering the entire country’s food security. "It's an economic crisis, a financial crisis, a political crisis, a health crisis, and now this horrible explosion” says Tamara Alrifai, spokesperson for the UN Relief and Works Agency for Palestine Refugees in the Near East (UNRWA).

France, the US, Italy, Turkey, Iran, EU, and OIC came up with the offer of help and show support for the people of Beirut.  Emmanuel Macron, the President of France, was the first foreign leader to visit the crisis-hit Beirut. While he consoled the citizens, their grief turned into anger as they chanted the word ‘Revolution’.

There is great anger among the citizens against the government, whom they accuse of being corrupt, sectarian, unaccountable, and out of touch with the common people. The intense protest by the people on the street forced the Prime Minister Hassan Diab to resign along with his cabinet on August 10, 2020.

The economic cost of the Beirut blast, where over 300,000 people have become homeless after their homes get destroyed, is estimated to be $15 Billion. Lebanon, which was already on the verge of economic collapse before this disaster struck, may find it impossible to withstand such a blow to the economy. It will need the support from the world over to rebuild Beirut.

A donor conference for rebuilding Beirut received a total pledge of about $300 million. Though it is a minuscule figure as compared to the destruction in Beirut, it will help to tide over the immediate humanitarian crisis. Apart from this Turkey has offered to help rebuild the port of Beirut and many countries are sending relief supplies.

The days ahead for the citizens of Beirut are going to be challenging as the country navigates the sectarian divide during the formation of a new government. It will be keenly watched by the citizens as well as the international community, whether Lebanon will discard its entrenched ruling elite and reject the toxic sectarian divide to elect an inclusive government or continue to perpetuate the misery on the common citizens.

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