New Economic Thinking on Alleviating Poverty Among Women

International agencies and development economists have historically taken a bird’s eye view of poverty. They have encouraged national-level economic growth through trade policy, monetary policy, and infrastructure projects.  The people created for these traditional economic models are impeccably methodical beings, who weigh costs and benefits to choose the best path. But in real life, people do irrational things all the time.

New thinking is bringing new insights. What’s different is first, a focus on real people and things at the micro level, and second, emphasis on empirical research in developing countries.

There’s now a consensus that efforts to alleviate poverty should be based on research using randomized controlled trials (analogous to trials of new drugs) wherever possible.  Field research has yielded evidence on low-cost changes with large payoffs--savings accounts that require depositors to accumulate a set amount before they can withdraw money, micronutrition programs to provide trace elements critical for health, well-side chlorine dispensers to purify water, and coupons to encourage farmers to buy fertilizer after the harvest, when they have cash—to name just a few.

At the same time, a substantial body of research has quantified the economic benefits of empowering women. In Half the Sky, Nicholas Kristof and Cheryl WuDunn vigorously advocate a global effort to educate and emancipate girls and women. Educated women tend to have fewer, better-fed, healthier children and to invest their economic resources in the family.

Unitarian Universalists have embraced the challenge of giving all women access to the global marketplace. We are a longtime supporter of the Self-Employed Women’s Association in India, which has evolved from a small trade union to a 1.2 million member non-government organization (NGO) offering a comprehensive array of services including health insurance, microlending and child care. SEWA effectively combines microfinance with other social support programs.

A global infrastructure to support women’s livelihood projects is evolving.  In Building Social Business, Muhammad Yunus describes a partnership with Danone to produce and distribute a nutritious yogurt snack for children, a partnership with both setbacks and surprises.  The experience led him to advocate a new kind of business aimed at filling social needs rather than making profits. An innovative import business, Global Girlfriend, provides a US market for fair-trade items made by women around the world. Stacey Edgar’s book, Global Girlfriends, provides many practical examples of adapting traditional handicrafts to make them useful and attractive to customers in developed countries.

As an economist who has worked extensively on domestic issues, I became interested in development when economics professor Muhammad Yunus and the Grameen Bank won the Nobel Peace Prize for pioneering work in microfinance. Having evaluated programs from prenatal care to stealth fighter development, I took notice of the call for rigorous program evaluation.

I think it’s extremely useful for anyone who wants to help alleviate poverty to study these new ideas. The best research and data will help us avoid dead ends and make us better-informed, more effective global sisters and partners.