Data and Behavioral Science Key New Wave of Poverty Programs

The Wall Street Journal reports on the growing "randomista" movement of poverty experts and campaigners embracing experimental, data-driven programs to help poor and indebted people save more and achieve financial stability.

Cast as an alternative to large-scale aid projects that over several decades have only budged the needle on national and global poverty statistics, "randomistas" draw on behavioral economics and randomly controlled field experiments to craft programs that utilize short-term aid, temporarily locked accounts, and even raffles as means to encourage savings and improve financial and health habits.

A study published last month in the journal Science reported positive outcomes for such methods in two-year trials involving more than 10,000 households in Ethiopia, Ghana, Honduras, India, Pakistan, and Peru. Much of the research is being done by economists and psychologists working through nonprofit, academically affiliated groups such as Innovations for Poverty Action and the Abdul Latif Jameel Poverty Action Lab.