Debate on poverty eradication

The project 'Bangladesh Priorities' set out to have a conversation on what is best for Bangladesh. In that spirit, I welcome the commentary from Nick Beresford of UNDP Bangladesh on September 29. His concerns merit a considered response.

Copenhagen Consensus and partner BRAC worked closely with more than 30 academics from Bangladesh and abroad – from Dhaka University to Yale – to examine 76 investments and interventions including TB treatment, supplements in pregnancy, delaying child marriage with education, and different kinds of cash transfers. More than thirty peer-reviewed, brand-new research papers were published online for free use, and the key research findings were shared with The Daily Star readers.

The interventions we studied were chosen after roundtable discussions with local and international civil society organisations, including UNDP. Economists estimated the costs and benefits for each intervention, showing where an extra taka could do the most good. Benefit-cost analysis provides us with one tool that ensures we think systematically, while taking other practical and social justice issues into consideration.

An eminent panel comprising a Nobel laureate and prestigious Bangladesh development experts considered and ranked these investments. Achieving efficiency is not the only objective when these questions are examined, which is why we invited many others to consider the research and prioritise as well: youths, The Daily Star readers, policymakers, and the rural ultra-poor.

Out of 1,100 pages of research, Mr. Beresford raises an issue with the evidence that shows handing out money to the poor – unconditional cash transfers – ranks worse than many other investments. He has faith in such programmes, to the point that he submits that cost-benefit analysis should not be applied to them.

Interventions targeting poverty were studied by Dr. Munshi Sulaiman, Research Director of BRAC International, who completed his PhD in Development Studies from London School of Economics and was a post-doctoral fellow at Yale University.

Dr. Sulaiman looked at more than 200 studies, including seven about graduation programmes (one study from Bangladesh), 30 on livelihood programmes (three from Bangladesh) and 11 on unconditional cash transfers (0 from Bangladesh). His paper is available at http://www.copenhagenconsensus.com/bangladesh-priorities/poverty. When we released the paper more than six months ago, I wrote an op-ed in The Daily Star, noting that these measures offered "a respectable return" on investment, but also that this was lower than other interventions.

The evidence examined by Dr. Sulaiman shows that one taka spent on unconditional cash transfers will deliver just 84 paisa in benefits. This doesn't mean that all interventions in this area rated poorly: graduation programmes in general did more good, longer and hence showed higher benefits. It received a medium-ranked placement in several prioritisations.

Of course, such a programme doesn't fit the needs of an aged or disabled person. This does not imply that we should only invest in graduation for the best social return and nothing for the disabled. What it suggests is that if we can support an ultra-poor household with both graduation and unconditional cash, we should prioritise graduation. And we should also consider the incredible benefits we could unlock by investing in, for example, tuberculosis or early childhood nutrition.

It is correct to point out, as Mr. Beresford emphasises, that none of the evidence on unconditional cash transfers came from Bangladesh studies. However, it would seem rash to ignore the best evidence from 11 studies around the world, and it is unclear why all these studies would be considered unreliable in deciding what Bangladesh should do.

In exploring the effects of unconditional cash transfers, Dr. Sulaiman examined a wide range of significant benefits: the annual consumption increase, total household assets increases and net savings increases. Mr. Beresford argues that other benefits should also be considered, including empowerment and the ability to "go about without shame" – although he recognises that "such benefits are hard to measure by any yardstick".

Dr. Sulaiman pointed out explicitly in his paper and presentation to the eminent panel in Dhaka that not everything conceivable could be measured, but some of the most important factors were.

It is likely that the ability to improve household assets, savings and consumption are some of the most important proxies we can find for measuring the ability to go about without shame.

No framework can ever measure everything conceivable; on each intervention examined, we have tried to capture the major part of the benefits. It is likely that the inclusion of unmeasured benefits would equally increase all 76 benefit estimates - essentially keeping the rankings similar.

The highest-ranked intervention by the eminent panel was improving the response to tuberculosis, which claims 80,000 Bangladeshi lives each year. We can save lives for a very low cost. Each taka will achieve 21 taka of good to society. But this only measures the value of the life lost. We could reasonably ask: what about the happiness that saving these lives will cause family and friends?

It is likely that unconditional cash transfers and tuberculosis treatment would both be attributed slightly higher benefits had all of the 'un-measurable' benefits been somehow included. That still means that the benefits of the tuberculosis response are ten or more times higher than those of unconditional cash transfers.

Mr. Beresford posits that cash transfers are a "constitutional entitlement". But so too is not dying from TB, not being married off in childhood, or not getting enough nutrition in early childhood to survive. One could make the case that every one of the 76 investments examined by our project relates to a "constitutional entitlement".

But where does this argument take us? No donor or government has infinite resources, and choices between good things are necessary, even if we find the process difficult.

There are many factors, political and otherwise, that any organisation faces when it invests a single taka in any of these areas. I would hope that we can agree that this addition to the evidence base on benefits and costs can be a valuable guide for organisations working in these areas to consider the ways they can do the most good with each taka spent.

This approach provides a research base for top-ranked investments, but it also provides a challenge – which is sometimes unpopular – to lower-ranked ideas, and a spur for further research and investigation.

Recently BRAC asked Bangladesh's ultra-poor for their priorities. Their answer: investments such as TB treatment, improving mother and child nutrition, and boosting agricultural productivity. At the very bottom: unconditional cash transfers. It is striking that the people living with the burden of poverty have reached such similar conclusions to the economic evidence, and these are voices that all of us should consider.

International and local organisations, including UNDP, have done excellent work helping the Bangladeshi government to make considerable strides against poverty and other challenges in recent years. Bangladesh Priorities aims to help this work by highlighting the investments that will do the most good. I am very pleased that we have signed a three-year Memorandum of Understanding with Access to Information (a2i) of the Prime Minister's Office to look more closely at some of the top-ranked solutions, and that the Budget FY2016-17 emphasises some of the most effective investments. Next, we are holding a series of "champion seminars" to drill into specific issues, starting with nutrition, where we have provided inputs to the upcoming National Plan of Action on Nutrition (NPAN) for the next decade.

I am glad that Mr. Beresford's considerations can help us be even clearer about choosing the smartest priorities for Bangladesh.

The writer is President of the Copenhagen Consensus Center and Visiting Professor at Copenhagen Business School.