Millennium Village

You will find it summarized here, excerpt:

Working on her own, without the collaboration or endorsement of the MVP, Kenyan economist Bernadette Wanjala of Tilburg University collected data on households in or near the site at Sauri, Kenya, where the project was launched in 2005. She interviewed 236 randomly-selected households that had been exposed to the MVP’s large package of agriculture projects, education programs, infrastructure improvements, and health/sanitation works. She also interviewed 175 randomly-selected households from an area of the same district (called Gem) that was not exposed to the intervention. She wanted to compare the two groups to see for herself whether or not the project had done what it promised: to lift the treated households out of poverty in a few years’ time and spark “self-sustaining economic growth”.

In their just-released paper, Wanjala and her colleague Roldan Muradian of Radboud University use the new survey data to measure the project’s impact on poverty. They carefully compare treated and untreated households that were otherwise similar in many ways—such as household composition, adults’ education, fertility, economic sector, and land holdings. Because this project is large and intensive, spending on the order of 100% of local income per capita, it is reasonable to hope that it might substantially raise recipients’ incomes, at least in the short term.

Wanjala and Muradian find that the project had no significant impact on recipients’ incomes.

How is this possible? While Wanjala and Muradian find that the project caused a 70% increase in agricultural productivity among the treated households, tending to increase household income, it also caused less diversification of household economic activity into profitable non-farm employment, tending to decrease household income. These countervailing effects are precisely what one might expect from a large and intensive subsidy to agricultural activity. On balance, households that received this large and intensive intervention have no more income today than households that did not receive the intervention.

I would gladly publish or link to a response from Sachs or others at MVP.

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