Episode 7

How to Mitigate Poverty at a Global Scale

Transcript

Speaker1: Welcome to the Q Talks podcast from Loyola University's Quinlan School of Business. This season, we'll be exploring issues surrounding the impact of wealth inequality, its ramifications for business and any ethical arguments or other anomalies that are a result of the inequality that currently permeates American society. Join us as we unpack important issues present in our country and our world. 

Rick Sindt: Welcome to queue talks on April 1st, the Quinlan School of Business had the pleasure of hosting Annie Dufalo, executive director of Innovations for Poverty Action, also known as IPA to discuss global poverty and income inequality with Ralph Murata, Chair in free enterprise and Professor Abol Jalilvand, whose mission is to discover and promote effective solutions to global poverty problems through programs in agriculture, education, financial inclusion, governance, health, peace and recovery and social protections. We hope you enjoy the following excerpts from the program. 

Abol Jalilvand: I wanted to say Bonjour, Annie. Again, thank you for giving your very busy time to us. You have a wealth of experience in this area, and I wanted to give our audience an opportunity to know you better in your own words. I wanted them to know what your journey has been and what has influenced you in doing so many of the things that you just said and our provost has mentioned. And also, tell us a little bit about the Innovation for Poverty Action, the organization that you are leading, what it does and what is involved with. 

Annie Dufalo: Great. Well, thank you so much for having me. And I guess I should start by saying happy anniversary to you loyola college, and congratulations on the efforts that are underway. It's really a pleasure to join your program. So, yeah, I'll tell you a little bit about myself and about innovations for poverty action and we can we can take it from there. So thinking about my career path, I have to say it hasn't been like a straight road to what I do. I actually studied philosophy and German language in college initially, so I can't say I'm using these academic credentials every day, but I like to say that philosophy made me wiser, so hopefully, it stayed with me. But I think underlying what I do in my career choices are values that I inherited from my parents. My father was still a mathematician and my mother was a pediatrician who also was in her free time volunteering for a nonprofit organization that was working with children, victims of war. And I think this experience ingrained in me two sets of values. One is a strong belief in science and rigor, and the other was a strong belief that one should focus on helping other more disadvantaged people. So and these two values are very much at the heart of what IPA does, right? It's trying to bring together good intentions, and rigor. The other thing that most certainly inspired me and influenced my career choices is the fact that my sister Estelle Duflo, made this really her career choice. My sister is an economist who, along with other colleagues, started at the Poverty Action Lab at MIT, an organization that's very that works very closely with IPA and Estelle Duflo, Abhijit Banerjee and Michael Kramer. Three economists in 2019 won the economics Nobel Prize for their work in pioneering the use of randomized controlled trials, which I can get back to later in the field of social sciences. So, you know, her work certainly has and her beliefs certainly have inspired me as well. Even so, my role in this space is quite different. So that's about me. 

Abol Jalilvand: Let me just set this up a little bit further before we get into the meat of that discussion. You know, when we talk about social issues, people generally have a connection with them. But sometimes it is important to know whether there is an official definition of some of these issues. Is there an official definition of poverty and income inequality? 

Annie Dufalo: Yes. So in terms of poverty, there are official definitions that the World Bank uses, for example. There are constant debates and constant research about how best to measure poverty and define it, but there is a pretty fairly widespread recognized definition that that's being used. So extreme poverty is defined as living under $1.90 a day. That's less than $2 a day. So imagine that. And then the higher poverty line is living on less than $3.20 a day. So those are the definitions. And since we are on that, you know I really appreciate what Noberto started with that poverty is not just statistics. It has a human face and it has a lot of human faces. But let me give you some statistics so that we're done with that. So as of 2017, some of the most recent official data from the World Bank, it's about one in ten people, or a little bit less that lived under $1.90 a day. So that's the extreme poverty rate. And when you looked at the higher poverty lines, living on less than $3.20 a day. This was about a quarter of the world, so to 24% of the world that lived on less than that as of 2017. But obviously, you know, the situation has worsened in the last year because of COVID and happy to get into this as well. 

Abol Jalilvand: So if I understand what IPA does is not really trying to develop a program, it is basically to test the programs to see whether they're achieving their objectives. Can you give us some examples of how this is done? I know that you played an instrumental role with respect to the micro-lending policy, and you guys did some analysis using randomized controlled trials. So could you give us exactly how this process is done and some examples of it? 

Annie Dufalo: Yeah, absolutely. So I'll take a step back and describe what our mission is. And you're exactly right, we don't implement programs ourselves, but we aim to inform the design of future programs. So to make the mission a little bit more concrete. Imagine that you're an official at a Ministry of Education somewhere, and imagine that your goal is to improve attendance in school. That's a real problem. In a lot of low and middle-income countries, it's about like 30% of kids who are absent every day for various reasons. So so what should you do? Should we implement a cash transfer program, you know, a conditional cash transfer program that incentivizes people to send their children to school? Should we distribute free uniforms? Because maybe that's one reason why they don't come to school. Should we introduce a deworming program? And that's working on the assumption that a lot of kids don't go to school because they are sick and often they are sick because of intestinal worms in certain contexts. So and there are many other good-sounding ideas out there. So what will have the highest impact for every dollar invested? And the answer is not necessarily obvious because it depends on the impact of these various interventions, and it also depends on their costs, right? And so if you look at how this question is addressed in other industries, in industries like technology or pharmaceutics, you know, companies spend like between ten and 20% of their resources on research and development. So to understand what will have the highest return on investment, and what will work best. In the international development sector it's been estimated that less than 1% of resources go into research and development. So basically to figure out what's the best way to use the other 99% of resources. So that's really where IPA comes in. Our goal is to be like a sort of R&D engine for global anti-poverty efforts together with our partners. So the way we work is that we partner with and support a large network of academics. And on the other hand, we partner with practitioners or decision-makers, which could be nonprofits, governments, etc. And together researchers and practitioners identify poverty related issues. So it could be related to economic empowerment, but it could also relate to education or governance issues. So they identify issues. They identify and often design innovative solutions to these issues. And then we evaluate the impact of these solutions to understand which ones will be most cost-effective. And as you mentioned, we often use randomized controlled trials to do that. And we've built a research infrastructure over 22 countries. So we've been doing this kind of work across the world. In total, we have around 800 studies completed or underway. So, yeah, I'm happy to give you an example. You mentioned microcredit. Would you like maybe to spend a little bit of time describing what the randomized controlled trial is before diving into an example. 

Abol Jalilvand: Yes, actually, that was my next question. So, please. 

Annie Dufalo: So we talk a lot about vaccines these days, right? We talk about the effectiveness rate. And we are all expecting that these vaccines have been tested in the most rigorous ways, which involves a clinical trial. Right. Well, basically, we apply the same approach to evaluating the impact of social programs. So in other words, the goal of a randomized controlled trial is to quantify the impact of a program in isolation from other factors, whether it's the passage of time or the intrinsic characteristics of people. And so, in other words, what you want to know is what would have happened to the same people, these people who benefited from the program, what would have happened to the same people at the same time if they had not received the program? And we cannot clone people, so we cannot compare people at the same time with and without a program. But we need to introduce a situation that basically gives you the same results, right? And the way to do that is by randomly assigning which individuals or households or villages get will get the program and to form two groups, one group that will benefit from the program, the other group, the control group that will not benefit from the program. And you follow those groups over time. And if your sample is large enough in every region that these groups are similar. The only thing that is different between them is the fact that one got the program and the other not. And most of the time, you know, it's possible to do that because usually there are fewer resources than the size of the need. So it's usually not possible to reach all eligible people at once. So and that's when this random assignment can take place. And often it's actually a way to allocate, in fact, who benefits from the program in a more fair way. So that also has that that advantage. And of course, you know, I've described the most basic randomized controlled trial with one group that gets the program, the other that does not, but there are many more sophisticated designs that allow you to compare, like different tweaks to an intervention and different types of interventions so it's not necessarily one program versus nothing. So coming back to the microcredit example, this actually relates to a personal experience of mine. So before working with IPA from 2005 to 8, I was working and living in India and I was leading a research center called the Center for Microfinance, which was very similar to IPA, but focused on microfinance in India. So we were doing research on microfinance. Anyway at the time, microcredit, like traditional microcredit products, mostly targeted at women, was extremely popular. So the story was that every poor person is an entrepreneur, you know, who just needs a little bit of capital to be lifted out of poverty. And if that happened, then women would also get on board and also things would improve like education, etc.. So there was a lot there was lots of enthusiasm for this story and a lot of philanthropic capital and private investment going into microcredit. And 2005 is the year that Muhammad Yunus won the Nobel Prize for his amazing work with Grameen bank recognizing microcredit. Now, at the same time in India, microcredit institutions were facing a huge PR crisis. There were local medias and local governments attacking micro microfinance institutions for being the new loan sharks and for pushing people into overindebtedness and causing suicides. Some microcredit institutions, like almost had to close their doors because of this and because of debt collectors. So who do you believe? Like I said, microfinance is a panacea to poverty alleviation or it pushes people to suicide. So and there is always an anecdote to support one story or another. You will always find someone who committed suicide. You will always find someone who grew a great business. So that's why generating rigorous evidence is really key. So anyway, it turns out that since then there has been seven randomised controlled trials of microcredit programs, some run by IP, some not, and across seven different countries, seven different implementing organizations. And the results were pretty consistent. And again, this was about the traditional microcredit products. So the product helps it helps some people invest in and grow their business. But overall, it didn't really lead to increased profits or incomes for most people. One thing it did is that it gave more freedom of choice to people, which is really important. Freedom to choose how you are going to earn your money and how you're going to spend it. But it wasn't a transformative poverty alleviation tool, and it also didn't lead to women's empowerment and improved educational outcomes and things like that. So in short, what we found is that it's a useful financial tool that gives people more freedom. And we all believe that everyone should have access to credit, so it's a great thing and certainly something that private investors should invest in in banks. But this is not necessarily where you want to put all your philanthropic dollars because it's not necessarily affecting poverty directly. But the other thing that we learned through these studies is that different people need different things, like the impacts looked very different for different types of people, which I guess isn't that surprising, right? But but the beauty of microcredit was precisely that the product was standardized, which and that's what allowed it to scale so quickly in a pretty cost-effective way. But that also means that it didn't necessarily serve everyone's need. And based on this research and also, you know, based on just the evolution of the sector and experiences from practitioners, the field has evolved a lot and there is now a lot more experimentation and diversification of financial products. So looking at and that's in fact something that we do a lot of research on is how to design like financial products that are more targeted at people's needs. So it's looking at different kinds of credit products where you may change the repayment period to allow businesses to invest and grow before they have to repay. We're also looking at savings projects and different ways to get people to save more insurance, etc.. So it's something that the microfinance sector overall is very involved in and that we are supporting with research. On the investing point, it's interesting, and again, that's like a little bit beyond my area of expertise, but I think of like investing right in that sense as a sort of higher return, long-term savings, right? So I can share a little bit what we've learned about in savings and investing in low and middle-income countries in the countries where we work. So one thing that we've learned is that savings like increasing people's ability to save has a very positive impact on people's lives. It helps people address shocks. It helps people invest more in their businesses. So savings is really important, and I believe that's important. Getting people to save more is important and has a positive effect on people's lives and businesses. Now, the take up of savings products is generally very low. Lower than would be optimal, I guess. And there are various reasons for that. Behavioral reasons. There are financial constraints and sometimes a lack of flexibility. And one thing that we've learned is that so we've done a lot of experiments looking at how to encourage people to save more. So, for example, we've looked at behavioral interventions like commitment savings and sending people text reminders to save. And what we find is that these savings products combined with that incorporates a behavioral component, are very effective at getting people to save more. So that's exciting because those are also pretty easy to do, right? We also find that fees have a big impact on demand. So reducing fees or canceling fees for savings accounts really get people to save more. But one of the things we find is, is that it seems important that people have access are able to access their savings in case of emergency. So now going back to the idea of investing, right? You know, it's usually a long term thing. You put your money somewhere and you don't see the returns come over time and you don't see your money for a long time. And what we find through our experiments is that because poor people have very low wiggle room, very low cushion, they need to to have that access. So, for example, you know, some of our research affiliates conducted an experiment in Kenya looking at the effect of commitment savings products for health. So the idea was to encourage people to save in case of a health event. And they compared the soft commitment and a health commitment. So in the first case, the savings account was labeled for specific use. So they were not supposed to use it apart from that. But it was a soft commitment, like they were allowed to take their money at any time. A hard commitment, they were not allowed to withdraw their money except for a specific use, which actually didn't lead to as much savings as the first one. And so that indicates that just knowing that you have the ability to take your money out is really important. And that's one word of caution, I guess, is the sort of idea of very long term like savings product where your money is locked. Right. Because if you're poor, you know, one of the aspects of being poor is that you're very vulnerable to shocks. So that's one thing to think about. 

Abol Jalilvand: Thank you, Annie. Let me just make this bring the media into this conversation. Recently, there has been a fair amount of coverage on income inequality. And as it is with every social topic, there are two groups of people that want in one way and another one in another way. The issue is that the question is that whether capitalism is the cause of income inequality or whether it is government intervention. And these are not my choices, these are basically what the media is talking about. I just want to make perfect disclosure. So there are basically competing views on this issue. And I was wondering whether you can give us some clarity about what's going on here. 

Annie Dufalo: It is a big topic, and I won't claim to be an expert, maybe too macro questions for me, but I'm happy to share my thoughts. I mean, first, you know, to give a bit of context, you know, I quoted some recent poverty statistics before, right? So in 2017, like I said, it was about one in ten people living in extreme poverty. 30 years before, this number was one in three. So one very positive trend until COVID hit was that poverty rates were going down and that came together with economic growth. And I think it's important to remember that these are not completely intractable problems. That's one thing. But the bad news is that at the same time, inequalities have increased and especially inequalities within countries. So inequalities between countries are still very high but have actually gone down a little bit within countries they have gone up. And it is the case in a lot of places that the richest 1% of the of the population have been big winners of the changing economy and that the bottom 40% hasn't necessarily won at the same rate, right? So. So I think it's really important to remember that while, yes, there has been great progress with poverty, first, there are still many poor people, about 700 million people just in extreme poverty, and inequalities have increased. You know, I think it's due to a number of failures, both like some failures of capitalism as well as failures of government to mitigate the effects of capitalism and of growing inequality. But I do think that it's that that there are ways to control the effect of capitalism, that that can mitigate inequality. And I do believe that governments have an important role to play in mitigating inequality and the effects of inequalities. So that's my belief that at a high level. And again, that's like a little bit beyond my area of expertise, but I think of like investing right in that sense as a sort of higher return, long term savings, right? So so I can share a little bit what we've learned about in savings and investing in low and middle-income countries in the countries where we work. So one thing that we've learned that savings like increasing people's ability to save has a very positive impact on people's lives. It helps people address shocks. It helps people invest more in their businesses. So savings is really important, and I believe that's important. Getting people to save more is important and has positive effect on people's lives and businesses. Now, the take up of savings products is generally very low know lower than would be optimal, I guess. And there are various reasons for that. Behavioral reasons. There are financial constraints and sometimes a lack of flexibility. And one thing that we've learned is that we've done a lot of experiments looking at how to encourage people to save more. So for example, we've looked at behavioral interventions like commitment savings and sending people like text reminders to save. And what we find is that these savings products combined with that incorporates a behavioural component are very effective at getting people to save more. So that's, that's exciting because those are also pretty easy to do, right? We also find that fees have a big impact on demand. So reducing fees or cancelling fees for savings accounts really get people to save more. But one of the things we find is that it's important that it seems important that people are able to access their savings in case of emergency. So you going back to the idea of investing, right. You know, it's usually a long-term thing. You put your money somewhere and you don't see the returns come over time and you don't see your money for a long time. And what we find through our experiments is that because poor people have very low like wiggle room, very low cushion, they need to to have that access. So, for example, you know, some of our research affiliates conducted an experiment in Kenya looking at the effect of commitment savings products for health. So the idea was to encourage people to save in case of a health event. And they compared the soft commitment and the health commitment. So in the first case, the savings account was leveled for specific use. So they were not supposed to use it apart from that. But it was a soft commitment. They were allowed to take their money at any time, a hard commitment that they were not allowed to withdraw their money except for a specific use, which actually didn't lead to as much savings as the first one. And so that indicates that just knowing that you have the ability to take your money out is really important. And that's one word of caution, I guess, is the sort of idea of very long term like savings product where your money is locked. Right. Because if you're poor, you know, one of the aspects of being poor is that you're very vulnerable to shocks. So that's one thing to think about. 

Abol Jalilvand: Business schools are in a very good position to talk about income inequality because of the knowledge that they have in areas of developmental economics or statistics that are very useful in terms of addressing that. So what I wanted to get your views on, what are some of the possibilities, what are some of the directions that universities in general and business schools, in particular, can use to start contributing in that area? And whether you have some examples of some schools that they're actually doing that. 

Annie Dufalo: Great. Thank you. That's a great question. So the way that we partner with academic institutions is usually through individual researchers, you know, less so with an institution as a whole. Also, we do have a strong partnership with the Global Poverty Research Lab at the Kellogg Northwestern University, which was the lab was funded by Dean Karlan, who is the founder of IPA. So that's also why we have a strong connection. But it's one example of something the management school has done is created a center that's dedicated to to to the study of poverty. So that that's one way that that that a business school can engage. More broadly, I think, growing awareness. So ensuring that, you know, that this is represented in the content of what's being taught I think is key. So to your point, making sure that the development, economic classes and the business schools that IP does work with our business schools who have development economists because we work with we typically work with development economists and we work with many development economists who are working out of business schools. And so there are many business schools that have a development economics department. So that's one way to really center research out of a business school and to grow awareness among students, right? Something else that's maybe important to expose students to is philanthropy. You know, a lot of students of business schools will go on and be successful, like business leaders, and presumably will do well in life. And one way that businesses that business leaders can help with poverty-related issues is by donating some of their profits. And there are different ways to be a philanthropist, and I think learning about that is important. So in the Silicon Valley, you know, the effective altruism movement is very popular. And their idea is to calculate the most good that you can do with your charitable dollars. And there are organizations like the life you can save that that provide recommendations of organizations that do a lot of good for their dollar. Often based on evidence but they also have guides for students. So some universities have had effective altruism chapters where students like come together and talk about these issues and possibly identify organizations to support. So I think it's a great way to start getting involved in philanthropy. And then I think one, third way to engage students is maybe to also teach them how the skills that they learn in business schools can be applied to this field. I mean, I have you know, I have I have a nonprofit organization. And I didn't go to a business school, I went to a public administration school. I learned a lot of very useful things for what I do, but, you know, I wish I had taken like nonprofit management courses and I wish sometimes I had an MBA that would probably help me in my day-to-day job of running an organization. So I think having like if business schools had, you know, NGO management courses and things like that, but then it also needs to come together with some incentives for people to go and work in this field because if you have big loans to repay that, that's tough. So, you know, loan forgiveness programs, I think, can really help people move into the social sector as opposed to the private sector. Sometimes that is really the constraint, right? So that's important. And then the other thing I'd say is that I think what's being discussed at school is very influenced by who the students are. So if you've been the schools can be really proactive at helping people from low and middle income countries to study at the schools. I think that we have but there are many constraints to people from low and middle-income countries to study. You know, that's something that we're thinking a lot for our staff. The majority of our staff is from the countries where we work. And many of them are interested in going to grad school, possibly in the US. But there are so many constraints. I mean the entrance exam fees can be a constraint. Sometimes it's just hard to access the information if you're not knowledgeable about the system. So finding ways to relieve these constraints and bring in students from these countries, I think can be really a great way to ensure that the schools focus more on the topic. And then finally, I think there are ways for business schools to directly engage. So I think business schools are often excellent executive education courses. Right. But often they are running, you know, wherever the business schools is, I think the more that these courses can be run in low and middle-income countries to facilitate the participation of business leaders in these countries, I think that that can also be a really interesting way for business schools to engage. So, yeah, so these are some ideas and we, we'd be happy to engage with you on how to we can partner with you. 

Abol Jalilvand: We definitely look forward to a set. I need some guidance from you. I have a lot of questions, but I want to give some time to our audience to ask questions. So inform me whether I can go forward or we can just end at this point and bring the audience in. 

Seth Green: Well, we do have questions from the audience. So if you're ready, I'm happy to begin introducing those. Mary Beth Johnson, you have our next question. 

Mary Beth Johnson: Hi. Yeah, hi, Annie. Thank you so much for being here, sharing your time and expertise with us. So something I'm sure I'm not the only one in this that is keeping me up at night is thinking about poverty that's happening right now due to the pandemic. So just wondering more specifically, how has the pandemic impacted IP's current research and work? And are you. Running into significant. Delays in evaluating and finding solutions that address poverty. Like what? In real time? How are you facing some of these bigger issues that the pandemic has created? 

Annie Dufalo: Well, to start with, as you said, as I mentioned, with COVID, has been and will be for some time a huge setback in terms of the progress made with poverty. The World Bank estimates that up to 100 million people, possibly more, will have been pushed into poverty in 2020 as a result of the pandemic, in addition to the previous number that I mentioned. So. So poverty rates have increased dramatically for the first time in 30 years. To put a little bit more color to it, we ran in the last April to June. We run a survey using phones. We ran a survey across nine countries to study the socio economic impacts of the implications of the pandemic. So it was a descriptive survey, not a randomized controlled trial. And looking at areas related to food security and children with learning and health behavior and things like that. And we find that incomes reduced dramatically during this time and that food insecurity increased a lot from like I think it was around 40% of households that were in Kenya where people had to miss a meal or a meal and up to like 80% in Sierra Leone. But large proportions of households had to miss or reduce a meal across countries. And we find that people often didn't go to a health provider when they would normally have without the pandemic, etc.. So this survey shed some light on the day to day implications of the pandemic and the lockdowns. And at the time, the findings were among necessarily surprising, but the magnitude was mind-blowing for sure. And our goal with this survey was to help government partners in their response. So our goal was to provide them with some data that could inform what they do as a result. And so to your question. So what was impacted dramatically, because a lot of work relies on face-to-face interactions, both to collect data, but also to interact with decision-makers. And it's usually done through face-to-face interactions. So what we did is that we very rapidly pivoted to phone based data collection. And we were able to do that because we had already built some bodies and because we have a research support team at the global level that supports country offices in this kind of methods. So we were able to rapidly pivot to phone based surveys and remote interactions with our partners, which was possible because over time we have built long term relationships with our partners, in particular our government partners in the countries where we work. So the extensive research infrastructure that we build over time and the relationships that we build over time allowed us to make this pivot. Now, you know, there are good reasons why we normally collect face-to-face data, because if we if it was easy to do it on the phone, we'd already do it. The types of data about how to collect on the phone. You don't reach everyone on the phone. So it introduces biases in who responds to surveys and things like that. So that's it wasn't like a full replacement. But, we were able to continue some of our studies by switching to phone surveys, but some of them were delayed. But also we were able to start a lot of new studies with surveys from the beginning. So the descriptive survey I mentioned is one example, but we also started a number of experiments looking at different ways to encourage people to use preventive measures against COVID. So, for example, we have a big experiment going on in Bangladesh looking at different ways to encourage people to wear masks. Very relevant topic. We also have experiments like looking at interventions that aim to help people during this time. So Cash hospitals, for example, has been a very, very critical type of intervention to help households, especially with food insecurity issues. But then all the questions about what's the best way to design a cash multiplier during this time and how do you target the right people? So we've been working with some government partners, for example, in Colombia on the design of the programmes and things like that. And so we started a bunch of studies related to COVID or using food based data, but recently we started doing face to face data collection in some countries in ome circumstances. We've developed very extensive protocols for doing this safely, and obviously, we have to be ready to stop sometimes depending on how things evolve. So that's what we're doing now. 

Seth Green: Thank you, Annie. Our next question comes from Swati Gupta Mukherjee. And to embarrass her a little bit. She is a scholar who is very focused on these issues. She is a leading professor in finance and looks at finance for a sustainable world. Just had an outstanding piece in the Stanford Social Innovation Review on those topics. And I won't say any more Swasti I'll let it now turn to you so you can ask your question. 

Swasti Gupta-Mukherjee: So thanks Seth that fulfills my quota for embarrassment for today. I was not planning on talking about my course. However, my question actually does relate. And as Seth said, I've started developing this curriculum which integrates finance with social justice and sustainability issues. I get to talk to a lot of future and current business leaders, both in the nonprofit as well as for profit sector. One of the topics that comes up pretty much inevitably in every discussion is financial literacy. So my question to you is, in your view, how integral is financial literacy to poverty eradication with and without the development programs? Because we have seen in the past, for example, during the foreclosure crisis here, during the subprime mortgage crisis, where basic lack of financial literacy put some people into poverty and foreclosures and such things. And also, do you think it's a chicken and egg problem where we do not know what must come first? Does poverty eradication lead to financial literacy or does financial literacy helps poverty eradication? Do you have any views on that? 

Annie Dufalo: Right. Thank you. So as part of our financial inclusion research program at IP, we run a number of studies evaluating the impact of various financial education programs. So, you know, the assumption behind this program is that financial literacy is important for financial behaviors. But the question is, how do you actually create and grow that financial literacy? So we've evaluated a number of sort of very traditional, commonly implemented financial education courses, and what we find is actually that these conventional approaches are not effective at imparting new knowledge and don't change behaviors. And that's an important finding because it's apparently $600 million every year that gets spent on this kind of programs. It's a pretty common approach. So it turns out that they don't really do a lot. So this is not to say that financial literacy is not important, but that the conventional approach to impart financial literacy hasn't quite worked. So it's important to find innovative ways to do that. And that's one of the things we're working on. And what we find is that, like, more like much more like nudge kind of approaches, you know, might work better. 

Annie Dufalo: So there was there was a study in the Dominican Republic, I think, that compared a conventional financial education program, you know, that that explained like the 1 to 1 of accounting and things like that, it compared a conventional financial education program that would be traditionally administered by a number of microfinance institutions to a sort of simplified training that was not so much focused on the underlying principles, but just on rules of ten. So you should separate your salary from the rest of your business expenses or, you know, do this or that. So just simple rules of thumb. So and it turns out that this was much more effective at changing people's behavior. So the financial literacy in itself didn't really change, but the behaviors did, which is what matters most. I hope that that helps a little bit that the question and provides some color to the question. In terms of what comes first, I don't know. But that's why we do damage control trials to help, I guess, evaluate where the causality is. 

Seth Green: But we are all still trying to figure out the chicken and the egg. So you're in good company on that one. Well, Annie, this has been an extraordinary discussion. We started by talking about how poverty has a face. And you have now talked about how the interventions that you're studying are bringing this work to 10,000 schoolhouses across the world and allowing so many of those faces to have a better opportunity set. I want to turn it over to Professor Jalivand for any closing remarks, anything that you want to share. 

Abol Jalilvand: Just wanted to thank Annie for giving her time. I also want to thank our secretary because she was very influential in getting our connections going. And this is always a very good way of doing things. Annie, thank you. 

Speaker1: This has been an episode of the Q Talks podcast where we seek to marry the wisdom of the Quinlan community with the issues of today. Special thanks to our guests as well as Dean Kevin Stevens for his generous support of this podcast. Matt Shelley, our student producer for editing this episode, as well as Loyola School of Communication and UW for their continued collaboration. Before you leave, take a minute to support us by sharing with friends or rating and reviewing our episodes to help expand our reach. Thanks for listening. I hope you join us next time.