We have all seen the commercials on television. Many of them readily fall under the broad name of “poverty porn,” and most of them feature resigned-looking developing-world children set against a sad soundtrack. All of them ask us to help by sponsoring a child in a developing country.
But does international child sponsorship work? In a new article (older, ungated copy here) in the Journal of Political Economy, Bruce Wydick, Paul Glewwe, and Laine Rutledge give an answer that is bound to surprise many development cynics:
Child sponsorship is a leading form of direct aid from wealthy country households to children in developing countries. Over 9 million children are supported through international sponsorship organizations. Using data from six countries, we estimate impacts on several outcomes from sponsorship through Compassion International, a leading child sponsorship organization. To identify program effects, we utilize an age-eligibility rule implemented when programs began in new villages. We find large, statistically significant impacts on years of schooling; primary, secondary, and tertiary school completion; and the probability and quality of employment. Early evidence suggests that these impacts are due, in part, to increases in children’s aspirations.
In a situation of direct entitlement failure, food availability in shops may not go down very much even when total food availability sharply goes down. When during the Irish famine in late 1846, people were starving, Major Parker, the local Relief Inspector sent the following report on December 21st from Skibbereen: “On Saturday, notwithstanding all this distress, there was a market plentifully supplied with meat, bread, fish, in short everything. Similar reports from all over Ireland made Trevelyan insist that all the “resources” of the country should be, as he put it, “drawn out.” In fact, however, the apparently paradoxical situation had arisen from a decline in entitlement in excess of the supply of food. That situation is, in fact, quite a common occurrence in famines. What has to be guaranteed to prevent starvation is not food availability but food entitlement.
That’s 1998 Nobel laureate for economics Amartya Sen, in an 1980 essay in World Development titled “Famines,” which I assigned as a reading in my food policy seminar. Continue reading →
A cool new article in the American Economic Journal: Economic Policy by Manuela Angelucci and Orazio Attanasio:
We use Oportunidades, a conditional cash transfer to women, to show that standard demand models do not represent the sample’s behavior: Oportunidades increases eligible households’ food budget shares, despite food being a necessity; demand for food and high-protein food changes over time only in treatment areas; the treatment effects on food and high-protein food consumption are larger than the prediction from the Engel curves at baseline; and the curves do not change in eligible households with high baseline bargaining power for the transfer recipient. Thus, handing transfers to women is a likely determinant of the observed nutritional changes.
Some of this might be a bit too technical for non-economists, so let’s take a closer look at their findings: Continue reading →