A new push for evidence on the impacts of development programs is prompting careful assessment of what works and under which conditions, potentially resulting in more effective interventions for poor people.
In recent years, many development program coordinators have been asked to provide something they have rarely needed to offer in the past: empirical evidence that their programs work.
Although some fields—especially medicine—have long embraced the habit of evaluating effectiveness, rigorous impact evaluation is relatively new in international development. When the International Initiative for Impact Evaluation (3ie) got underway in 2009, Executive Director Howard White said, “Each year billions of dollars are spent on development programs with scant evidence on whether those programs are having any impact at all on poverty, child mortality, getting girls to school, and so on. Policymakers simply don’t know the best use of their resources.”
If evaluating impact—that is, attributing a particular result to a particular program or policy—were easy, it probably would have been commonplace long ago. In fact, conducting high-quality evaluations faces a host of political, financial, and technical obstacles. Nonetheless, aid donors and governments have shown new interest in acquiring solid evidence of the effectiveness of development programs. “Impact evaluation has received more attention in the past decade since the Millennium Development Goals were set,” says Mywish Maredia, an associate professor at Michigan State University. “There has been a push for evidence-based policy.” This new focus has resulted in a number of careful evaluations that have shown definitively whether programs were working and how they could be improved.
Phase Two of the Ghana Strategy Support Program
Shashi L. Kolavalli
These are particularly challenging times for African countries like Ghana that are seeking to develop their agriculture sectors. After decades of neglect, there is increasing interest in investing in agriculture, fueled initially by the food crisis and sustained by the enthusiasm surrounding the Comprehensive Africa Agriculture Development Program (CAADP). How to achieve agricultural growth, however, continues to be a puzzle; what to invest in is the key question. The attention of policymakers and donors appears to have shifted from developing pro-agriculture policies and strategies to developing investment plans that can deliver the desired growth.
What should the Ghanaian Ministry of Food and Agriculture be doing to facilitate private investments? How should it work with the private sector? Should it be subsidizing fertilizers, pursuing block farming, or setting up grain reserves? If so, how? In addition to these important issues there are concerns about the capacity of ministries and in-the country administrative systems to make effective use of available resources. To some extent, divergent thought on these issues is what holds back the alignment of country and donor policies and, thereby, greater aid effectiveness.
While the focus continues to be on private-sector led growth in agriculture, two noteworthy approaches have emerged in Ghana and elsewhere. The first is a gradual shift away from making general improvements in the way input and output markets function and, instead, improving specific value chains through the delivery of marked development interventions (that is, anchoring interventions around improving the competitiveness of certain commodities). The second notable approach is a subtle emphasis on commercial agriculture: in addition to linking smallholders to markets, this type of agricultural development seeks to combine aspects of large-scale farming and foreign direct investments with expectations of benefiting from the transfer of technologies and capabilities from elsewhere. All of this entails strategic coordination with the private sector, which has begun to happen.
In practice, value chain development, which embodies market and private-sector development, goes beyond merely seeking to overcome market failures and instead aims to transform relationships between economic agents. The assumption behind this approach is that, in the absence of trust, agents interacting with each other at arms length relationships, in a competitive environment are driven by opportunistic behavior. Value chain development also recognizes the existence of coordination failures between agents. The objective in further developing value chains therefore is to foster cooperation between agents that will ultimately create mutually beneficial commercial relationships, which are inevitably superior to what they are under competitive behavior. Value chain development often entails identifying and supporting an agent in the chain who is in a position to influence other agents to upgrade their operations and likewise down the line through mutually beneficial relationships. A key expectation is that such relationships would make it feasible to develop smallholders in a private-sector led approach to develop agriculture.
Value chain development entails risks that are usually associated with industrial policy—picking winners and risking rent-seeking behavior—but it can be an effective tool for strategic targeting of regions and households. Countries like Ghana—where IFPRI has had a strategic support program since 2005—are also targeting commodities and products for import substitution. The approach is also a clearer and an aggressive way to develop private sector as it goes beyond merely providing a facilitating environment. Value chain analyses can offer simple diagnostics of binding constraints and potential investment opportunities. The interventions that would emerge from such analyses would include the usual public investments and infrastructure development in addition to direct support to private entities.
The Ghana Strategic Support Program, a research and capacity-strengthening initiative, generates knowledge with the aim of improving agricultural and rural development research, decision making, policies, and strategies. After having supported policymaking with strategic analysis during the first phase of the Ghana Strategy Support Program—focusing on understanding the structure and linkages of Ghana’s economy, the nature of growth required to meet the developmental objectives, and the returns to public expenditures, in addition to governance of delivery of key services—the ongoing second phase is designed to answer the “how to” of agricultural transformation focusing on the emerging approaches. Stakeholders felt that previous analysis did not go far enough to identify binding constraints, investment opportunities, or make ex ante assessments of potential options. A lack of availability of data, particularly with adequate levels of disaggregation, limited the capability of strategic research from being adequately supportive of decisions to develop investment plans. Read more…
Development researchers are applying innovative experimental methods and new technologies to the study of poverty and hunger. Can these new approaches help point the way to more effective policies and programs?
Livestock are central to the livelihoods of the Maasai people of East Africa, and if they could market the livestock products they produce, they could greatly improve their quality of life. But getting their products to market can be difficult. One promising innovation has been the introduction of contract farming. In Tanzania, Maasai milk producers have signed contracts with milk processors, committing themselves to deliver a certain quantity of milk on a certain date. Such contracts offer milk producers a number of advantages: contracts give farmers an assured market for their milk at a prearranged price; farmers benefit from reduced marketing costs; and the milk processors often provide advice and technologies for producing more and better-quality milk. Milk processors also benefit from the contractually assured supply and price of milk. It’s a textbook win-win solution.
And it would probably work—if real people behaved the way people do in textbooks.
Instead, however, the Maasai producers often fail to deliver the milk as promised. If the price of milk in the local market is higher than the price specified in the contract, many producers sell the milk there to benefit from the highest price. It is hard for them to believe that the price offered by the milk processor is fair when they see the market price surpassing the contract price. This situation frustrates the milk processors who are expecting the milk deliveries. It also threatens the whole contracting arrangement and could ultimately result in a riskier situation for the producers—no market at all. The milk processors face a dilemma: Should they try new arrangements to encourage consistent milk delivery? Should they reward loyal milk producers with money, household goods, or goods and services to help improve livestock production? Should they direct incentives to the Maasai men who own the livestock or to the Maasai women who manage the milk production?
To help answer these questions, IFPRI researchers are drawing on the tenets of experimental economics—a growing branch of economics that uses experiments to test economic theories and better understand the working of markets. Read more…
Agricultural extension (also known as agricultural or rural advisory services) plays a crucial role in promoting productivity, increasing food security, improving rural livelihoods, and promoting agriculture as an engine of pro-poor economic growth. Though it fell off the development agenda for a number of years, a recent confluence of factors—such as rising food prices, renewed government and donor interest in agriculture and advisory services, and a broad commitment to restructure global agricultural development institutions—has led to a resurgence of interest. This interest was solidified through the Assisi Statement released by the Neuchâtel Initiative in September 2009 (www.neuchatelinitiative.net).
Now that extension is back on the agenda, it needs to be strengthened, improved, and revitalized in order to help meet the new challenges facing agriculture, such as changes in the global food system, growth in non-farm rural employment and agribusiness, health challenges affecting rural livelihoods, the deterioration of the natural resource base, and climate change. There are four key ways to do this:
1. Provide a voice for extension within global policy dialogs
Until recently, there was no forum to speak for and support extension, in contrast to the large and well-developed international structures in agricultural research. Stakeholders have recognized that a more formal, dynamic, and proactive structure is needed. This will enhance understanding of the important role extension has to play in global food security, climate change, environmental protection, and other critical global issues. Read more…
IFPRI Forum talks with Dr. Pedro Arraes Pereira about the future of agriculture, biotechnology, and climate change in developing countries.
FORUM: Embrapa is a highly respected institution. What have been some of the factors that have made it so successful? How has Embrapa’s research benefitted small farmers?
Arraes: Embrapa was created in 1973 to meet the major challenges of promoting, stimulating, coordinating, and executing agricultural research activities across the whole of the national territory with the aim of producing knowledge and technology to be put at the service of the nation’s producers. It started as a department in the Ministry of Agriculture, and then became a public corporation with the agility necessary to lead a real revolution in the incipient Brazilian agricultural research system. In fact, one of the primary factors that allowed it to head up this scientific and technological revolution was brought about to a large extent by the generation of knowledge and activities arising from the National Agricultural Research System (Sistema Nacional de Pesquisa Agrícola, SNPA), initially coordinated by Embrapa.
This arrangement, which involved State Agricultural Research Organizations (Organizações Estaduais de Pesquisa Agropecuária, Oepas), universities, and other similar institutions, made possible the incorporation of innovations that guaranteed that giant steps forward could be taken in matters of agricultural quality and productivity, and the supply of food and producer goods to the growing urban population and the industrial sector, which was a significant factor in moving Brazilian agriculture forward into an outstanding position in the Brazilian economic and social development process. Read more…
Ruth Vargas Hill and Miguel Robles, research fellows in IFPRI’s Markets, Trade, and Institutions Division, recently won a grant competition at the Marketplace on Innovative Financial Solutions for Development conference in Paris. Hill and Robles’s proposal on weather securities for rain-dependent Ethiopian farmers was selected from among 800 applicants as one of the five winners to receive a $100,000 pilot grant.
The Marketplace conference and competition focused on improving the use and channeling of development funds through innovative mechanisms; it was co-hosted by the Agence Française de Développement, the Bill & Melinda Gates Foundation, and the World Bank. The grant competition called for cutting-edge financial solutions to concrete development problems that could be scaled-up and replicated broadly.
“Weather Securities: Reducing Risk for Farmers,” Hill and Robles’s winning proposal, describes a system of simple weather securities with fixed payments created to protect rural farmers against the risk of erratic rainfall and drought. Farmers, traders, and others whose income is affected by drought purchase weather securities (or, tickets) that pay out based on objective cut-offs of reduced rainfall. The securities are not limited to particular crops but rather are designed around multiple crop needs. The system is simpler, more flexible, and more inclusive than traditional index-based weather insurance policies, which are designed for specific crops. While the project currently targets farmers in Ethiopia—in collaboration with Ethiopian-based Nyala Insurance S.C.—it can be expanded to benefit millions of other rain-dependent farmers. Read more…
Household income is an obvious determinant of poverty. Traditionally, researchers have used household surveys—in which the the head of the household (typically, the husband) is interviewed—to determine household income. But a recent IFPRI discussion paper suggests that this may not always be the best approach, and that it could lead to inaccurate representations, since husbands are rarely able to estimate their wives’ income correctly.
In Who Should Be Interviewed in Surveys of Household Income? (IFPRI Discussion Paper 949), authors Monica Fisher, Jeffrey J. Reimer, and Edward R. Carr explain that a householder’s estimate of his wife’s income is often unreliable for a number of reasons, including misinformation, incomplete pooling of money, and conflict over the distribution of resources. Based on data from surveys conducted in southern Malawi throughout 2008, the authors noted that husbands and wives who were separately asked to estimate the amount of income generated by the wife arrived at the same estimates in only 6 percent of the studied households. Thus, if the husband is the only member of the household being interviewed, survey responses might not be telling the full story.
“The study highlights how important it is for researchers to have a good understanding of the local context when they design a survey instrument to collect household income data,” explains lead author Monica Fisher, a research fellow in IFPRI’s Development Strategy and Governance Division. “In some settings, it may suffice to interview the male household head only—for example, if the head is the only income earner.” Read more…