Pilot Programs in Central, South America Alleviate Poverty
With the success of the United Nation’s Millennium Developmental Goal to halve the world’s global poverty rate, the more recent Sustainable Developmental Goals ask us to ensure that even if markets fail, disease spreads or natural disasters occur, a true end to poverty can be found.
Although arduous challenges lie ahead in achieving sustained growth, particularly in agriculture for the poorest countries, recent studies on poverty in Latin America suggest that even slight changes in behavior within existing systems can significantly influence change without the implementation of unnecessary, expensive or brand new programs.
According to the World Bank, each of these pilot programs has shared in achieving a sustained impact on their communities:
- Within the rural regions of Nicaragua, a program was created to connect business grants and training by encouraging group interactions, along with a place for beneficiaries and local leaders. According to the World Bank, “This small modification had a big impact: it improved aspirations and business performance, increasing non-agricultural income by US$3.30 per capita and the average value of a household’s animal stock by US$12.” While these numbers may seem insignificant at first, upon further examination we find that the additional income attributed to social interactions is upwards of 40%.
- In Bogotá, Colombia a study was conducted which examined the influence of stress on future behavior. To conduct this report, the World Bank says, “beneficiaries of a bi-monthly Conditional Cash Transfer program were randomly split into two groups. One group received the full payment as usual twice a month. The other received only two-thirds of the payment twice a month; the last third was put instead into a savings account and disbursed as a lump sum in December, just before children’s school fees were due.”Through this study, it was found that the “save when you need it” approach ultimately was the most effective because it was dispersed during its greatest time of need, which resulted in higher levels of re-enrollment rates within schools.
- When investigating how to help individuals in Peru save money, technology was utilized through mobile text messaging, which included sending reminders such as remember to save. “Even more effective, however, was combining the reminder with goal-specific messages like “Remember to save so you reach your own savings goal of $20” – this simple phrase increased savings rates by 16 percent,” states the World Bank.
Although it is complicated to introduce these approaches on a broader level, for now, specifically tailored approaches will help target the poorest of the poor in the World Bank’s endeavors to implement a certain kind of behavior. Every achievement is a step in the right direction towards supporting the World Bank in their aim of defeating poverty by 2030.
– Nikki Schaffer
Sources: World Bank 1, World Bank 2, UN