Note: This op-ed was originally published in The Messenger.
Imagine giving a new medicine to patients with a chronic disease — but without rigorous clinical trials of how it would impact people over time.
Then imagine not only doing this, but also inviting investors to spend billions of dollars to produce more of this medicine, without knowing if it was helping — or possibly even harming — people in the long-term.
That would be both irrational and irresponsible. But that’s the current approach the international community appears to take to reducing global poverty.
The Current State of Global Poverty
On the surface, the rapid and steep decline in poverty around the world is a great success story. Back in 1981, more than 40% — or two in five — of the world’s population lived in poverty. By 2019, that number had fallen dramatically to 8.5%.
But looking closer, much of this macro trend has been driven by unique success stories in countries with disproportionately large shares of low-income populations, such as India and China. Elsewhere, the picture of improvement is very different.
In sub-Saharan Africa, while the poverty rate has dipped slightly, the reality is the sheer number of people living below the breadline has actually risen from 290 million in 1990 to 422 million in 2015, with poverty levels projected to reach 491 million by 2030. This is despite sub-Saharan Africa receiving $1.2 trillion in foreign aid since 1960.
The Complex Issue of Foreign Aid
Overall, Organization for Economic Cooperation and Development (OECD) data suggests that since 2000, upwards of $500 billion in aid has been spent by the top donor countries on economic infrastructure and production.
How much of that aid money has been effective in reducing poverty? The shocking truth is that we don’t really know. Even the International Monetary Fund (IMF) admits, “the effectiveness of foreign aid remains an unresolved issue.”
The Urgency of Long-Term Impact Measurement
This is largely due to inadequate measurement of the long-term effectiveness of international development efforts. I see it with my own non-profit organization, TechnoServe, which operated more than 120 poverty reduction projects in 29 countries last year — but only one included funding for measuring impact after the end of the project.
For example, addressing poverty by helping people develop skills and access to markets and finance, as is our approach, has shown to be an effective way to improve people’s incomes in the long term. However, if specific interventions are not effective, we — and our funders — need to be the first to know so we can try different approaches.
Unfortunately, the reality is that most development projects are not set up to measure this kind of long-term, systematic impact and, therefore, the results can be misleading. To cite just one example, one USAID project in Malawi reported in its endline survey that certain new practices had been “successfully introduced” among program participants. However — in a rare, commendable instance of post-project measurement — an evaluation five years later found that these same groups were mostly not sustaining the practices long-term.
When the development sector only draws conclusions from endline studies, it may well draw the wrong conclusions. And so we risk throwing good money behind bad approaches if we do not consistently measure the long-term impact of economic development programs. Ultimately, the cost of finding out what works will be much lower than the cost of not knowing what works.
Practical Steps Toward Effective Impact Evaluation
The first step must be to include long-term impact measurement into project design from the outset. Charities and development organizations should not be left to find independent funding for their own long-term evaluations —as we recently did to measure the impact of a project to improve the livelihoods of coffee farmers in Rwanda five years after the project ended.
As part of this, economic development projects should be properly resourced to track beneficiaries for years after an intervention, which is often a challenge in remote and rural communities. To achieve this, the sector needs more specialized staff with strong evaluation expertise and access to the latest monitoring and evaluation tools.
Finally, we need to adopt standard, sector-wide operating procedures to measure economic impact years after projects end. This requires initial investment into more research to develop the proper protocols and metrics to provide comparable, meaningful data.
Finding genuine, long-term solutions to poverty is one of the greatest responsibilities that humanity has. And if we take this responsibility seriously, then the entire development sector needs to invest more in finding and funding what really works.
William Warshauer is president and CEO of TechnoServe, an international non-profit that aims to address poverty through projects working with low-income communities to develop business skills, as well as help access markets and finance.