Jeffrey Sachs for the World Bank?

Ana Maria Coloma asked for my take on Jeffrey Sachs for president of the World Bank.

My main concern is that there might be some possible conflict of interests. He is behind the Millennium Village Project (MVP). Some have argued that the interventions which are part of the MVP have not had a substantial effect on income (although they have increased agricultural productivity). I wonder if Professor Sachs would have the incentives to support and promote RCTs to evaluate the programs that he has created. One has to keep in mind that he advocates increasing aid as the solution to world poverty. Is he willing to reconcile this idea with the need of evaluation?

If he is willing to take that challenge and evaluate the MVP (as well as other interventions) it would actually be a great opportunity for him to show that he can be self-critical, and to show that he is willing to establish policies according to evidence. Is he willing to do that?

This takes us into another direction. Should support for RCTs be the main criteria to appoint  a  president of the WB? RCTs are the most important trend in development economics - and probably they have been for the past fifteen years - the World Bank is moving into that direction (see for example David McKenzie's work). 

What I do like about Jeffrey Sachs is that development economics has been the focus of his work for many years - some past presidents have had other profiles. I like Jeffrey Sachs work on malaria, the resource curse, and geography and economic growth. In his book The End of Poverty he argues that there are not magic bullets to promote economic development.  Again, if he is willing to take this assertion seriously and rigorously examine his own work (as well as many other interventions), I would support him. 

Testing Sachs' Millenium Village Project with RTCs?

The MVP [Millennium Villages Project] covers more than 500,000 people in 14 villages in different environments across rural Africa, and works on the principle of multiple interventions across health, education, enterprise and agriculture. I visited a project in south-west Uganda, and the results were certainly impressive. The aim is to show how the millennium development goals can be achieved by 2015 with a limited amount of aid that is matched by community investment (in labour or in kind) and the commitment of local and national government.

As part of the announcement this week, the MVP proudly claimed that malaria in its villages had fallen by 72%, access to clean water had more than tripled, and average maize yields had doubled. All of this was achieved on a budget of $60 a head per year, according to the project. The next stage of funding will build on business and enterprise to help villages to link better to the wider market. Soros punched the point of this huge programme home: here was a model that was replicable and could be scaled up across Africa.

 The critics

The nub of the issue was well put by Chris Blattman when he asked on his blog what the MVP will prove. That "a gazillion dollars in aid and lots of government attention produces good outcomes"? This is hardly surprising, says Blattman. The point, he adds, is how we test "the theory of the big push: that high levels of aid simultaneously attacking many sectors and bottlenecks are needed to spur development; that there are positive interactions and externalities from multiple interventions".

As Blattman says, the reverse could be true – "that marginal returns to aid may be high at low levels and that we can also have a big impact with smaller sector-specific interventions". There has been plenty of development along the latter lines in recent years, such as mass distribution of malaria bed nets for example. Which is the most effective, sustainable form of aid? It's a very good question.

The problem for the likes of Blattman, Clemens and Demombynes is that, for a number of reasons, the MVP – despite the huge investment of resources, expertise and effort – is not going to help answer the question one way or the other. The evaluation process is simply not rigorous and open enough, argued Clemens 18 months ago in a careful critique that he has repeated more recently.

Clemens urged two things: long term follow-up and comparison with villages in the MVP with other villages, both randomly selected. He argues that many of the places where the MVP villages are sited are undergoing dramatic changes anyway, and that without comparisons, it will be hard to identify what changes are attributable to the project.

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