NCPA - National Center for Policy Analysis

EFFECTIVENESS OF AID PROJECTS

July 30, 2004

Wealthy countries and international organizations spend more than $55 billion a year on aid to impoverished nations, but there is often little evidence that the projects they finance have made a difference, reports the New York Times.

Critics of organizations like the World Bank say that measuring the effectiveness of development projects using randomized trials is necessary to prevent massive waste of funds. For instance, researchers at the Poverty Action Lab have found that:

  • Adding an extra teacher to classrooms in rural India didn't improve test scores, but hiring high-school graduates to give remedial tutoring to groups of lagging students in a Bombay slum markedly improved their math and reading skills.
  • Providing poor students in Kenya with free uniforms or breakfast increased school attendance, but not as much as giving them drugs to treat intestinal worms, making them less sick in the long run.
  • Out of more than 200 studies of a $1.3 billion aid initiative in India, only one was rigorous enough to measure whether the programs made a difference.

The World Bank is beginning to listen to critics who demand better evidence of whether or not aid projects are improving people's lives. This summer, it is organizing large-scale impact evaluations, including randomized trials, of programs in dozens of countries to upgrade slums, improve the performance of schools and keep children healthy and in class.

Source: Celia Dugger, "World Bank Challenged: Are the Poor Really Helped?" New York Times, July 28, 2004.

 

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