Graduation Model: Ready to Scale Up?

We’ve seen first-hand the benefits of the Graduation Approach, a series of interventions that help guide poor people on a pathway from extreme poverty to sustainable livelihoods and more hopeful lives. So it was gratifying to see our optimism reinforced at an event in Paris last week when about 100 experts and policymakers discussed how the approach might be integrated into social protection policies and other large-scale government programs.

CGAP and the Ford Foundation launched 10 pilots in eight countries in 2006. Some of our partners took part in rigorous, randomized controls from the get-go rather than fine-tune the projects first. The Graduation Approach has its foundation in a model created by the Bangladeshi NGO BRAC, which tweaked the program over the years before initiating its own randomized studies.

At the Reaching the Poorest Global Learning Event 2014 in Paris, February 19-21, Yale Economics Professor Dean Karlan shared findings from six of the randomized controlled evaluations being conducted to evaluate the CGAP-Ford graduation pilot sites. Along with fellow researcher Nathanael Goldberg, Karlan said he was very impressed with the results.

Karlan, founder of Innovations for Poverty Action (IPA), said that along with MIT’s Abdul Latif Jameel Poverty Action Lab, IPA had been involved in about 500 or so randomized trials over the years. Of these, he could count on one hand those he was confident enough advising policymakers to scale up. The Graduation Program would now be on that list.

“The lesson is very much: let’s scale these up, and continue learning how to do it right,” Karlan told the meeting, which was hosted by the CGAP-Ford Foundation Graduation Program.

The research assesses whether beneficiaries are better off as a result of the program versus those in the control group. Those in the “treatment” group receive a package of five ”building blocks” of the approach– time-limited consumption support, transfer of an asset such as a cow, goat or about $100 to start a business, development of a savings facility, skills training, and life-coaching.

Some of the highlights from IPA’s research include that total annual consumption per capita in the India pilot was up by 15 percent by the end of the second year of the program and 11 percent in the third. In Ethiopia, spending on consumption, such as food and other goods, was 15 percent more than in the control group in the second year and 18 percent in the third.

Factors such as location, context, and choices made during program implementation were important. For example, in Honduras, annual consumption of participants decreased and a likely reason for this was that the chickens given as an “asset” turned out to be an unfortunate choice. They were a new breed for the area, arrived late from Costa Rica, required special feed, and took 4-6 weeks to lay eggs. As a result, it appeared that many households faced a tough choice -- invest in the feed for their chickens and wait it out or buy food for their family and sell or slaughter the chickens.

London School of Economics Professor Robin Burgess also reinforced the importance of the Graduation Approach as a strategy for addressing extreme poverty. He shared results from his survey of 26,965 BRAC households in 1,409 communities in rural Bangladesh. People in the “treatment” villages in the poorest part of Bangladesh had incomes that were 40 percent higher than those in the control group, said Burgess. What was even more encouraging was that two years after participation in the BRAC program ended, people had further diversified their income.

Policymakers attending the event were upbeat about what they had seen or learned about the approach. A number of governments have already begun their own programs or are scaling up pilots. Afghanistan’s Minister for Rural Development, Wais Barmak, said they were expanding their pilot from two to six areas and if that works he wants to take the program nationwide.

In Pakistan, Qazi Azmat Isa, CEO of the Pakistan Poverty Alleviation Fund, was so pleased with the results of the pilot that it has been expanded to 80,000 families and there are plans to reach millions more. In Peru, during her tenure as Minister of Development and Social Inclusion, Carolina Trivelli convinced government officials to start their own, very similar, graduation program -- Haku Wiñay -- and already have expanded it from 25,000 to 50,000 families, with plans to increase to 160,000 families. Mariana Escobar Arango, from the Department of Social Prosperity in Colombia, explained how her government has begun a very interesting adaptation of the approach in a pilot called “Produciendo por mi Futuro”.

In Brazil, Tiago Falcão, National Secretary of the Ministry for Social Development and Fight against Hunger, explained how elements of the graduation approach are already in place but administered by different agencies; the government now plans to implement the program in a more holistic way and pull these services together. Indonesia is in a similar position – many of the components are offered by various government agencies. Paraguay is planning to begin a graduation pilot in April.

The Graduation Program is not a silver bullet that will magically pull everyone out of extreme poverty. But the evidence shows it is an important component to put very poor people on a sustainable pathway out of extreme poverty. Next steps were identified during the Paris meeting to help facilitate the adoption of the approach by large-scale government programs. A first step is to further evaluate the program and event participants identified a number of key questions. These included identifying the relative merits of the program versus just giving cash to the poorest; determining the relative importance of the five components of the approach; and ascertaining its sustainability. Secondly, there is a need to provide policymakers with compelling evidence and stories to help them convince decision makers that the model is worth the investment.

In addition to identifying next steps, an outcome of the Paris meeting was a plan to create a community of practice for policymakers to share lessons and help each other as they plan and implement graduation pilots and programs. Such collaboration will hopefully make an important contribution to our goal of assisting extremely poor households to develop sustainable livelihoods.