A multipronged program that includes savings awareness, one-time asset transfer, skills training, life coaching, and healthcare assistance, among others could significantly help improve the lives of poor people and combat the prevalence of poverty. An extensive study conducted across three continents has validated the effectiveness of this particular anti-poverty initiative referred to as the Graduation program.
As a backgrounder, Graduation program is a common term for any anti-poverty initiative designed to move or “graduate poor people” or households out of extreme poverty by providing productive assets such as livestock, job training, life-skills coaching, and health information. Furthermore, another purpose of this imitative is to examine whether helping people in multiple ways simultaneously could be effective in eradicating poverty while also promoting stable and sustainable social and economic status in a particular community.
A history of the Graduation program
The first Graduation program was deployed in 2002 in Bangladesh by BRAC under its “Challenging the Frontiers of Poverty Reduction-Targeting the Ultra Poor” or CFPR-TUP initiative. BRAC is a Bangladeshi international non-profit development organisation that also provides assistance to other countries including Afghanistan, the Philippines, Sierra Leone, South Sudan, Sri Lanka, and Uganda, among others.
Central to the objective of CFPR-TUP is the improvement of the social and economic situation of extremely deprived women and their households. BRAC provided an integrated support including asset transfers, skill development, personalised healthcare support, and ensuring social security through community mobilisation.
Following the success of BRAC, the Consultative Group to Assist the Poor or CGAP has studied and wrote extensively about the graduation program to determine its universality and understand how it can be replicated in other parts of the world. In 2006, CGAP partnered with the Ford Foundation to launch and test the CGAP-Ford Foundation Graduation Program. The partnership brought forth 10 pilot Graduation programs in eight different countries: Ethiopia, Ghana, Haiti, Honduras, India, Pakistan, Peru and Yemen.
There are now several local non-profit organisation that have partnered with CGAP and Ford Foundation to adapt and deploy the CGAP-Ford Foundation Graduation Program. The Innovation for Poverty Action, for example, has launched its Ultra Poor Graduation Program in India, Pakistan, Honduras, Peru, Ethiopia, Yemen, and Ghana while the Fundación Capital has deployed a similar program in Latin American countries.
Implementing the Graduation program
The CGAP-Ford Foundation Graduation Program is multipronged. In a nutshell, the program consists of five main components: Consumption support, savings support, asset transfer, skills training, and intensive life skills coaching. However, other organisations have slightly modified these components in order to localise the program.
Nonetheless, to be specific, the program begins with providing consumption support; mindful of the fact that extreme poverty is a situation in which an individual and their households are unable to access basic needs such as food security.
Upon establishing the basic needs of the participants, the program would provide support in saving money. This involved linking participants with formal financial or banking institutions, motivating them to save, and encouraging the sustainable construction of their assets. The program considers this saving support as important in managing risks.
Another component is in-kind asset transfers centred on promoting the income-generating activities of the participants and establishing their self-sufficiency. Common provided assets are livestock.
The program includes components for further promoting the self-sufficiency and personal development of participant. For instance, the skills training component involves providing basic skills in business, knowledge in finances or financial management, and other facets of personal developments including empowerment, communication, and teamwork, among others. On the other hand, intensive life skills training involves frequent visits from field-mangers or volunteers to extensively guide participants and provide general support and motivation.
Other organisations have added the health support component in the overall Graduation program model. Essentially, this component is a range of services designed to promote healthcare through health education and access to government services.
It is also important to note that behind the CGAP-Ford Foundation Graduation Program is an evaluation agenda with qualitative and quantitative research that includes a life histories approach, ethnographic methods, and randomised controlled evaluation. This evaluation is essential in determining the improvements in the social and economic status of the participants as well as the changes in their overall lives and behaviours.
Success of the Graduation program
The success of the Graduation programs deployed in different countries is determined by the “graduation” rates or the percentage of enrolled people who have graduated from extreme poverty and in to a stable social and economic status.
Of course, it is worth reminding that the Graduation program initiated by BRAC since 2002 has been massively successful. Hence, CGAP and the Ford Foundation have adopted the entire initiative in an effort to determine the universality of its application and replicate its positive outcomes.
A report from the World Bank revealed that six pilots that involved between 150 and 1000 participants each have been completed, with graduation rates between 75% and 98%. In Honduras and Pakistan, early results indicated an increase in food security and increased asset ownership, particularly livestock ownership. Furthermore, there is an increase in food consumption, rise in control over business income, and a significant increase in health indicators of the participants in West Bengal. These results suggest that the Graduation program can work across different communities or regions.
A study conducted by a team of researchers from Innovation for Poverty Action and Abdul Latif Jameel Poverty Action Lab examined the impacts of the Graduation program deployed in Ethiopia, Ghana, Honduras, India, Pakistan, and Peru through randomized evaluations. Note that CGAP and the Ford Foundation have piloted the program in these countries since 2006. Furthermore, about 48% of households within the target countries had daily per capita income of less than $1.25.
Nonetheless, with 21,063 adults in 10,495 households from across six countries enrolled in the Graduation program over a three-year period, the initiative produced a 5% increase in per capita income, an 8% increase in food consumption, a 15% increase in assets, and a 96% increase in savings compared with similar groups of people who were not participants.
“The results show that three years after the intervention, hunger is down, consumption is up, and income is up,” said Abhijit Banerjee, research co-author and the Ford Professor of International Economics at MIT. Furthermore, in noting the improvement in self-reported mental health, he added that the examined people were happier as well.
Sustainability of the program would however require more years of monitoring and evaluation. Nonetheless, according to researchers, several encouraging indicators emerged from their evaluations. First, daily consumption did not decline over time after the program ended. Second, participating households had more productive assets and their labour supply increased a year after the program ended. In some areas or countries, participating households have even acquired productive assets other than the ones provided by the program. Third, in Bangladesh wherein researchers did a follow-up study for two years after the termination of the program, there have been observed vigorous impacts on consumption, productive assets, and earnings. Lastly, the researchers noted that governments could expect these positive impacts if the Graduation program has been implemented at larger scale.
Further details of the study are in the article “A multifaceted program causes lasting progress for the very poor: Evidence from six countries” published in 2015 in the journal Science. The team of researchers included Abhijit Banerjee, Esther Duflo, Nathanael Goldberg, Dean Karlan, Robert Osei, William Parienté, Jeremy Shapiro, Bram Thuysbaert, and Christopher Udry.