By John Schellhase

Maurice Lim Miller’s innovative idea was that he didn’t know how to end poverty.

He had worked for years for non-profits in San Francisco. One night the mayor called him at home and invited Miller to his office to pitch whichever program he thought would help most. As he prepared for the meeting, Miller grew anxious. Whatever he and others had been doing wasn’t working: “The very first kids I had trained back in the early 80s,” Miller told NPR about his job skills program for at-risk teenagers, “I saw their kids now showing up for programs.”

Miller thought of his mother, a poor immigrant from Mexico who had found her own way out of poverty. He realized he wanted to put poor people in charge of the money usually spent on anti-poverty professionals.

(photo from New America Foundation)

The resulting Family Independence Initiative has no program. Self-organized groups of families set their own agendas, ranging from debt reduction to improved grades for kids to weight loss to home ownership. Families receive a laptop, a $160/month stipend, and additional funding from FII for every success they can demonstrate based on their own targets.

Though still in its early stages, FII’s outcomes look promising. According to reporting by the families themselves with a follow-up audit by FII, in two years the families earned on average 23 percent more, saved 240 percent more, and increased their home ownership by 17 percent.

This apparent success comes from a hands-off approach from FII’s staff. FII did not organize the groups, lead meetings, or give any direction about what to prioritize. Miller believed that outside direction was likely to undermine true innovation. Staff who couldn’t help themselves from offering advice were actually fired.

As Miller has written, “Trusting low-income families with money and connections, thus giving them control and choice in their lives, is what led to their success.”

What would happen if aid agencies and international NGOs extended the same trust to the families they work with in developing nations? Often, the arrogant assumption in development is that the poor can’t be trusted to know what’s best for themselves and their families. The last half-century of failed development projects, however, suggest that it is truly the rich outsiders who don’t know.

Further reading about FII and their approach:
Get Feedback (pdf)
The Uphill Battle to Scale an Innovative Antipoverty Approach (pdf)

John Schellhase is a Program Assistant at DRI and pursuing an MS in Global Affairs at NYU.

In March, Abhijit Banerjee and Angus Deaton, two of the most brilliant development economists of our time, squared off at DRI’s Debates in Development conference.

Here’s the four-minute version:

For Banerjee, co-author with Esther Duflo of Poor Economics, development experiments are valuable because they force researchers to think rigorously about causality, and help create an agenda for learning.

For Princeton development economist Angus Deaton, identifying a causal effect is not so useful because it inevitably depends upon the interaction with other “helping factors.”  More generally, blind trust in randomized controlled trials (RCTs) leads to overconfidence and lack of sufficient scrutiny of  potentially bad evidence.

So that was the short, short version, but if you’ve got a little more time, we have got a longer version. Continue Reading