Esther Duflo speaking at Pop!Tech in 2009. Photo: kk + (flickr)

Ever wonder why some development projects succeed while others fail?

Esther Duflo and her colleagues at MIT’s Poverty Action Lab are working on the answer. Duflo is one of the newest recipients of the MacArthur Genius Grant because of her commitment to investigating what causes poverty to persist in some developing countries and what works to alleviate it.

She does this by setting up controlled field experiments in some of the poorest countries in Africa and South Asia. These experiments set out to prove how social and economic forces fuel the cycle of poverty in these areas. They also test how effective foreign aid projects are at lifting people out of poverty.

Duflo conducts her experiments using a method that mimics how drug companies conduct randomized medical trials. One group participates in a development project while the other does not. The differences between them are then measured to see if the project worked, and exactly how well.

Some of Duflo’s best known work is on HIV prevention in Kenya. Her research shows it’s more effective to teach girls specific ways to reduce their risk — like avoiding sexual relations with older men — than teaching basic medical facts about HIV and emphasizing abstinence as the best method of prevention. As she explains in her recent article for VoxEU.org, girls who were given risk-reduction information now use condoms more often, stay in school longer, and become pregnant less often.

“Economics is about the best way to allocate resources, and finding out what works is important to understanding how to allocate these resources,” Duflo told Philanthropy Action. Too few development strategies are vigorously tested. Proving what works can help.

(For more information on the Poverty Action Lab, check out Sarah Standish’s post "Researching Better Ways to End Poverty.")

Managing Director of IMF Dominique Strauss-Kahn speaks at the World Bank/IMF spring meeting of 2009. Photo: World Bank Photo Collection (Flickr)

Earlier today the International Monetary Fund (IMF) announced plans to provide up to $17 billion in desperately-needed assistance to poor nations over the next five years. IMF managing director Dominique Strauss-Kahn was quoted in a press release that outlined the details of this historic response by the fund.

This is an unprecedented scaling up of IMF support for the poorest countries, in sub-Saharan Africa and all over the world... The G20 asked the Fund to help respond to the global economic crisis, which has hit the low-income nations so hard, and we are responding with a historic set of actions in terms of support for the world’s poor. The new resources and new means of delivering them should help prevent millions of people from falling into poverty.

A staggering 82 percent of workers in sub-Saharan Africa are classified as "working poor" — those who are working but are still in poverty. The International Labor Organization expects that percentage to grow, sobering news to a region that has experienced it's best economic growth in more than four decades.

The ILO numbers indicate, however, that GDP growth is on the decline and many on the subcontinent are becoming discouraged in looking for work. The high percentage of youth workers in the region is making matters worse, the UN news agency reports:

The region has the world’s youngest working population and 75 percent of available jobs there are considered “vulnerable,” according to ILO. The agency estimated that one-third of job-seeking youths have simply given up or are working in jobs that pay less than $2 a day.

Small farmers who are being hurt by the drop in grain prices are a prime example of vulnerable workers. Many of these small farmer's have poured a large percentage of their resources into one venture and could be financially ruined if their investments sour. Family businesses often "employ" family member that work for no pay. These workers are also considered vulnerable and are still counted as being employed even though they don't actually earn wages, skewing the region's unemployment figures.

If the ILO’s predictions come true, 19 to 26 million people, many in these vulnerable positions, will join the ranks of the working poor, adding to the throngs of people struggling to meet the most basic of day-to-day needs.