More Than Good Intentions: How a New Economics Is Helping to Solve Global Poverty [Hardcover]

According to this book's authors, over the last 50 years the wealthiest nations have given about $2.3 trillion to try to reduce poverty, primarily in developing nations, yet today about three billion people live on just $2.50 per day (in today's U.S. purchasing power terms). Paradoxically, $2.3 trillion represents a lot of giving, and three billion people represent a lot of poverty. So, what's the problem? One camp of observers says we simply haven't given enough. Another camp says the aid and development community today is ineffective. In a nutshell, this is the poverty problem that the authors have jumped into.

Here are two quick examples from the book that illustrate some of the problems in meaningfully reducing world poverty. First, the authors mention a group of Buddhist monks who go to the Marina del Rey harbor in the Los Angeles area and purchase the catches of local fishermen. Then, the monks release their purchased fish back into the sea, because they feel it's wrong to catch the fish in the first place. This is certainly an unconventional way to "do good," but the real question regards how effective this approach is. Good intentions, sure, but how well do they work?

A second example involves a hypothetical situation posed by Princeton University utilitarian philosopher Peter Singer: Suppose you are at a lake and you spot a small child drowning. Should you save this child, even if it means that you will ruin, say, $200 of your clothes? Most people would answer yes, of course. Okay, but Singer now asks whether you should feel just as obligated to send a check for $200 to some agency that helps save starving children. It's still $200, and there is still the prospect of saving a child's life, but most people might not see as clear a connection between the two hypothetical situations as some utilitarian philosopher would. Perhaps more to the point, this sort of logic might not necessarily motivate a lot of giving, regardless of the effectiveness of the agency that's trying to save children. Appealing to people using such logic may also represent good intentions. But does it work well?

The authors might classify the example of the monks as more of an emotional response to a perceived problem, and the reasoning comparing a drowning child and giving to aid agencies as a super-rational approach. However, most of the world's people are somewhere between these examples. Basically, this book develops and promotes combining behavioral economics and field research to (1) understand problems related to poverty and (2) pursue rigorous analysis. Behavioral economics, where consumers, businesses, governments, etc. are treated not simply as perfectly rational "econs" (a term the authors borrowed from the book "Nudge," by Richard Thaler and Cass Sunstein) is perhaps the hottest area of economics analysis nowadays, because it better explains real-world human behavior. (That's one reason why I purchased this book. I am fascinated by behavioral economics studies.)

Simplifying a great deal, when it comes to solving real-world problems regarding hunger and poverty, good intentions may simply be not good enough. Givers (which hopefully include most people reading this review) need to ask questions about the incentives created and the likely outcomes associated with the many ways to direct support toward needy people. That is, they need to ask such questions if they want to better evaluate the outcomes associated with their giving. Although each reader may take something slightly different from this book, I'd suggest that most readers will become more informed givers. And that's really this book's impact.

"More Than Good Intentions" focused on what programs (or parts of programs) actually achieved their objective of helping the poor. The authors talked about the studies they've done on this and explain their findings about what works, what doesn't, and how various programs might be improved. The authors acknowledge that people don't always act in their long-term best interest, so we need to understand why the poor act in certain ways, modify programs to take that into account, and test those programs to see if they're working.

The book was easy to read and very engaging. It contained interesting stories of real people that were impacted by these programs. I'd highly recommend this book to those who donate money to organizations that help the poor and to the people who run these programs.

The topics the authors covered were their studies on how to "sell" a program to poor people (as in, get them to use it), various types of microfinance programs (individual, group, along with basic business training, along with specific business advice, etc.), microsavings programs, agricultural programs, educational programs, and health programs (including reproductive health). The last chapter listed the 7 programs that they discussed that they're the most excited about.

This book was a review copy provided by the publisher as an eBook through NetGalley.

Karlan and Appel challenge those of us who like to think we're making a difference in the world to think more about our work. Whether you're writing a check, leading a nonprofit, or advocating for change, this book should be required reading before you leave the house Monday morning. The authors are at once both terrific storytellers and careful social scientists. This is a fascinating read, filled with surprises, and practical tools you can use to inform all of your efforts to make a difference in the world. I highly recommend it!