Crossing Borders

I spent the better part of the past week in western Kenya checking out the scale-up of IPA’s Safe Water Program.  This is one of the development interventions that IPA has evaluated and declared a “Proven Impact” project.  One of the things a lot of folks don’t realize about IPA is that when something does work we’re pretty big on seeing it go to scale – so instead of reaching a study sample of maybe 500 or even 5,000, taking the same intervention and trying to reach entire districts, countries, or even regions.  It’s exciting stuff but brings with it it’s own set of challenges.

Those four days were really the first time I’ve spent in Kenya since I studied there in 2008.  It was really nice to be back – I guess I can’t say whether it’s just a little change of pace from Uganda or whether there’s actual some intrinsic difference but it was refreshing nonetheless.  I can understand maybe a third of the Kiswahili spoken around me, which is a third more than I understand of any local language in Uganda; the food is definitely better; tuk-tuks are awesome; fewer calls of mzungu in the village; and a little bit more of a spring in the step.

One interesting thing – crossing the border from Uganda to Kenya you fill out a 5 by 7 inch immigration card which they barely glance at before picking up the rubber stamp and attempting to punch a hole in your passport.  However, returning to Uganda through the dusty little border town of Busia you now receive the same high-tech treatment promised at any international arrivals terminal in the States.  Metal detectors, fingerprint scanners, the little camera, 3M passport scanners, computers, the whole works – which works fine until the internet goes down, which of course it does at regular intervals.  It’s also just amazing to see what the government of Uganda is spending funds on these days.

Perhaps the biggest indication that I was back in Uganda was getting cut in the queue by a full grown man who then looked at me and said, oh, I’m sorry, as if  he hadn’t noticed that he had been standing behind me for the last five minutes.

From Ghana

I’ve been away from the blog for more than a few weeks.  A friend recently shuttered her “life in Uganda” blog on the anniversary of her arrival in the country – I am thinking I will stick with this but am not sure how frequently or exactly what topics will come up.  Regardless of what I promise it will largely be a matter of when the mood strikes me, frankly I’ve got more going on now, both work wise and extracurricular, than I did for most of the spring.

I certainly have not kept quiet for lack of material.  Kampala has been interesting of late.  As I mentioned before, the government is broke.  Soon after the Shilling plummeted it was announced that the government has failed to pay private power companies the better part of the electricity bill for the last three months which led to load shedding throughout Kampala (and likely extended blackouts outside the city) which prompted the city’s merchants to call a two day strike.  The matatu drivers also struck for two days leaving thousands of Ugandans with no real economical means of getting to work.  Boda drivers doubled their prices and had a field day.  It’s so easy to talk about these things as “oh, life in Uganda” but really it comes down to the government having abused the treasury to ensure a landslide victory for the president in last February’s election.  And that glaringly obvious detail is something people are quite comfortable discussing and seem to accept.  Museveni actually wrote a rather wacky op-ed in the Monitor where he simultaneously proclaimed that a) Uganda would prosper through export led growth due to a weaker Shilling and, b) that Uganda must increase production and exports in order to ensure that the Shilling will rebound against foreign currencies.  I’m not a macroeconomist but neither is he.  Piece here.

Tomorrow’s the final day of the Ghana edition of IPA’s annual training for new staff.  IPA trainings are kind of like nerd camps for development types.  Try as we might, most casual conversations are interspersed with the words: survey, random, measurement, impact, data, sample, random, significance, field, random and power.  The five day program includes some beginning sessions on why we do what we do and then gets into some rather technical details on how we go about managing field research, specifically randomized control trials.  I came over in part to lead a session on electronic data collection (using computers / smartphones) which was pretty interesting and perhaps the only somewhat contentious discussion of the week.  There are two competing hardware / software solutions being widely used by IPA and the primary issue of contention is that nobody, myself included, understands both.  There’s the Blaise camp and the Pendragon Forms camp and trying to figure out exactly which is best in which instances, and the limitations of each, has been very interesting.  Frankly it sounds like if you have a lot of time and some programming experience you can do a lot with Blaise, which runs on netbooks.  That said, Pendragon is far simpler to program, runs on smartphones / PDAs, and there isn’t anything in a 1,000+ question survey that we cannot program.

Ghana is interesting, the food is a huge step above the Ugandan cuisine, Accra feels like a huge sprawling town with a good size middle class, and the beach, well, the beach is always nice.  Soon it’s back to Uganda and work, which is going well and I’ll write more about later.

Life / Work Update

The last few weeks have been a whirlwind.  I recently applied to transition from my current position on the Rainwater Storage Device evaluation in Kamwenge to a new IPA project in Kampala.  The project is a little different than the traditional line of work for IPA, namely rigorous impact evaluations, instead we plan to work with NGOs to support and improve upon their Monitoring & Evaluation (M&E) systems.  Two weeks ago I got the new job, last weekend was spent looking for an apartment in Kampala, and the past four days were spent running around Kamwenge putting things in order before my departure.  Yesterday I packed up my life and hitched a ride with a government truck headed into Kampala.

And with that I said goodbye to Kamwenge.  While this is a transition I wanted, and am very excited for, it was oddly strange to leave.  Many of the things I loved about Kamwenge in the first six months lost their glow in the spring (eg: doing my laundry by hand on Sunday mornings went from a refreshing chance for some mental housekeeping to a monotonous chore).  At first the pace of work kept me preoccupied but this spring, with a more regular work schedule, I definitely hit the doldrums from time to time.  I had all the time in the world to read and cook and play soccer.  If I had decided to I could have set myself to studying the local language or volunteering in one of the nearby schools.  I never did either of those things; partly because I wound up not being there for much of the last three months, but mostly because I wasn’t comfortable initiating a commitment I couldn’t keep.  In the end I had three good friends in Kamwenge.  They are all guys who are young, smart, and eager to succeed and I’ll miss seeing them around town and learning from them.  While most of the town recognized me as the mzungu who lived “up at Balaam’s place”, to them I was still just that, another mzungu.  And after another year in Kamwenge, or even three, I’m not sure that would have changed.

One thing sank in this spring: in being the only outsider in a community it’s easy to forget that there was another before me and there will be an endless stream of others that follow.  For the first several months last summer I was frequently called Stuart around town.  Each time I corrected them, No, Stuart was a Canadian man and he left Kamwenge several months ago. Frequently I also had to explain that not only were we not brothers, I had in fact never met the man.  Similarly I imagine that anyone who shows up in town this summer will hear my name from time to time.  We outsiders operate much like a revolving door, turning over in time with the projects we come to implement.

I am very grateful to have had the opportunity to live and work in a rural setting.  I don’t think I would have been content if my first position had been in a developing capital.  That said, I am ready to live in Kampala, ready to have colleagues in an office and share an apartment with a roommate, ready to have the regular amenities of a city (supermarkets with perishable items, sandwich shops, tennis courts, live music, decent internet, etc.), and the daily interaction with other expats.

Professionally, I’m excited for the new challenge.  The M&E project is still very much an abstract idea: NGOs often want or need to evaluate the impact their projects have on beneficiaries.  IPA does really great impact evaluations but the methods we employ are sometimes simply not feasible for certain NGOs and are not appropriate for certain types of projects (eg: first pilots).  That said, excluding a long and expensive RCT style evaluation, what is the best method for NGOs that want to evaluate their projects?  What data should they collect?  And, ideally, how should they interpret and use the data they collect?  We don’t know all the answers to these questions and therein lies the challenge of this new initiative.  Personally the appeal of the project is this idea that we can help bridge the gap between rigorous evaluations and actionable M&E work.  Hopefully the partnerships that we form and the systems we propose will build upon current best practices and help NGOs better understand their current projects and use this knowledge to implement better projects in the future.

Microfinance, a personal view.

Microfinance is huge.  In the last 30 years microfinance has undergone a rapid evolution from the low interest rate group-lending model pioneered by of Mohammad Yunus to a formalization of rural (and urban) money lender services. At its core, microfinance is designed to bring financial services (usually loans, but increasingly saving accounts as well) to the poor.  In practice, today’s microfinance institutions are often for-profit businesses who pitch themselves as sustainable social welfare institutions.  As he wrote in a NYTimes op-ed recently, Yunus and others are not pleased: here.

The two important questions then become: is this business or charity? and, if it’s charity, is it sustainable?

Banerjee & Duflo have put together a very accessible theoretical explanation of micrfinance, here.

There are a few basic principles:

1.  Whenever any institution makes a loan, there are some costs associated with loan administration that are largely fixed.  That means that if you set your interest rate just high enough to reclaim the cost of the loan then the smaller the loan the higher the interest rate.

2.  Next, the higher the interest rate the more likely borrowers are to default.  Note that this may be a reality (higher rates are more difficult to pay) but it could also be a choice – if the cost of defaulting (likely fixed) is less than the cost of repayment (determined by interest rate), many will simply choose to walk away from their loan payments.  While not a choice people make lightly, under certain circumstances people choose to default on their home mortgage payments (in the US) and one of the founding blocks of microfinance is that collateral is usually not part of the deal.  The cost of default then comes from social norms or the loss of future borrowing opportunities.

3.  This introduces adverse selection, or, those good borrowers who are likely to repay their loans are going to be more concerned about high interest rates than bad borrowers who do not plan to repay regardless of the interest rate.

Their article goes on to discuss experiments (many of which are IPA projects) which tease out the effect of adverse selection vs. moral hazard, but we’ll leave it at that for now.  The important point here is that for every small increase in the overhead cost of administering a loan there will be a corollary increase in interest rates and therefore default rates, which only make it more costly to administer future loans.  This isn’t rocket science – rural money lenders have traditionally had very low administrative costs; one lender who knows everyone in town and one big goon to come beat you up if you fail to repay, pretty simple stuff.

Ok, so I promised this was “a personal view”, not a theoretical discussion.  I made my first microloan to a friend here in Kamwenge back in November to the tune of $500.  Said friend runs a small enterprise selling grilled chicken on the street every night and between a few family debt issues and covering the school fees for his younger siblings he was quickly running out of the operating capital he needs to buy more chickens.  He asked, he drew up a contract for 3 months, he let me name the interest rate, and I gave him the cash.  Last week he made the first of two payment installations so now I feel confident enough in my decision to blog about it.

Because microfinance has grabbed so much of the limelight there has recently been some discussion, especially in the popular media, about its rather obvious limitations.  The idea of a loan is that someone can use that money to make more money – they have to invest in something.  The implicit story sold by microfinance institutions, I think especially back home, is that everyone in poor countries is a budding entreprenuer just waiting for their first micro-loan to unleash their business potential.  This is obviously flawed.  Most people in the world are not good entrepreneurs (that statement is not founded on anything, but sounds about right).

Well aware of all that I decided to go ahead and make the loan.  I had been watching his business (and eating his chicken) for several months and I thought he handled it well.  I also know where he lives and that he’s not very likely to run away with the money which, by the way, is more than he would need to cover the first term of university, something he’s trying to save up for.  And it seems that this time it worked out well.  I’m looking at a 5% return over three months and he’s looking at the best loan offer anyone in this town has ever seen (we’ve kept the deal a secret, I hardly want to become known as a lender).  5%! you say? That’s over 20% APR?! Yep, and still below most interest rates offered to full time employees of the formal economy (mostly civil servants around here).

My friend doesn’t exactly keep “books” on his business.  There’s no tax and nobody is asking for written records of anything.  So I can’t say what his returns are going to be.  But I can say with a good deal of confidence that he’s paid off a significant debt that was drowning his parents, his brothers returned to secondary school over the weekend (school fees paid), and now, with those burdens off his family’s back my friend can go back to saving for university with the hope of enrolling in September.   So sometimes it does work, at least to some extent.

Check out this recent post by David Roodman about MFI interest rates: here, and also the rest of his blog for all things microfinance related.

Work Update (Part 1)

It’s been over a month since I last bored you all with details of my work but believe it or not it’s not all safaris and cultural immersion these days.  So here’s what has actually been occupying the vast majority of my waking hours of late.  As I previously mentioned  I have created a lengthy survey which focuses on a few broad themes:

First, Household Roster – who lives here?  Second, Employment Details – what do they do for a living?  how much do they work and how much do they earn? Third, Consumption & Assets – what do they buy and what do they own?  Fourth, Water water water – what sources do they use? how far away is each?  how do they collect?  who collects water and how much time do they spend collecting?  how much do they use for various activities? and how does rainwater play into all of this?  Fifth, Social Networks – who knows who? who likes who? who is widely respected in the village and who is active in the community?  Finally, Behavioral Games – simple scenarios that try to elicit risk and time preferences, much in the same vein as my senior work at Middlebury.

That’s a gross oversimplification of a survey that has over 1,000 questions (when you considering asking many questions about each of the 10+ people in a given household, and asking other questions about each of 40 other households in a village sample) and will take about 90 minutes to administer.  So that’s kept me on my toes.  But what’s been the real focus for the last three weeks is moving this beast of a survey from a clean and simple Excel spreadsheet into a software program called Pendragon Forms which is used to conduct surveys on PDAs such as the Palm Pilot or in our case the HP iPAQ series device.  Forms is a very powerful tool in that it is relatively simple to program but still gives the survey designer lots of freedom – if they can figure out the tricks.  Once on the PDA the survey functions much like an online survey that you have likely seen before – questions and pre-coded answers that allow you to “select one”, choose “yes or no”, rate something on a scale of “1 to 10”, etc.  The difference is in our case the enumerator is the one inputting the answers, not the respondent.  The value of electronic data collection is hotly debated in this industry – even within IPA some professors swear by it and others won’t even consider it.  Pros and cons:

Pro – Complete control over the movement from one question to the next.  In all these surveys there are many skip patterns, ie: if the answer is A, go to question 5, if it’s B, go to question 10.  With a paper survey you can only hope that your enumerators are paying attention and following instructions.  PDAs give the programmer complete control over what action is taken every time a response is entered.

Pro – Erase the potential for illegible or incomprehensible survey responses.  The ink doesn’t run and the 5s never look like 6s.  That’s nice.  Also, if an enumerator accidentally enters an age of 150 instead of 15 I can set the program to catch this unlikely observation and prompt a correction on the spot.

Pro – Eliminate the total headache that is data entry.  The only thing more stressful then preparing for a survey is dealing with sloppy data entry companies, or so I’ve heard.  Fortunately I’ll never have to find out – at the end of each day the data from completed surveys are transferred directly to my hard-drive and immediately backed up (about a dozen times!).

Pro – Cut costs.  Printing 3,240 copies of a 40 page survey costs real money.  As does paying the sloppy data entry teams to enter each of those 130,000 pages, twice.  Twice not because they will mess up the first time (which they will), but twice because double entry is the only acceptable standard and the only way to conduct error rate checks, which usually results in us sending them back for round three.  Either way the manual entry of 260,000+ pages of survey data eats up a good chunk of change.  Even when you consider the cost of purchasing new PDAs for a large survey team the savings are real.

Personally those four reasons seemed pretty good so I threw my weight behind electronic data collection and we decided to take the plunge.  While I still believe this is the right thing to do and should pay off in the long run, using PDAs frontloads much of my work and demands a level of preparation above and beyond locating a safe dry place to store stacks of paper surveys  for a later date (ok, there’s a lot more too it than that!).  After three solid weeks of Pendragon Forms programming what I can say is that there is a very real reason why the program has a small band of IPAers around the world contemplating ways to rig a skeet launchers to toss up PDAs for target practice.  One example – the creators of Pendragon Forms decided that, as if correcting hundreds of little screens in a row wasn’t punishment enough, every time you hit the Backspace bar they would cheerily remind you of your mistake with a short sharp BEEP!  Thousands upon thousands of BEEP!  Another, there is nothing really intuitive about the program, you just kind of have to learn it step by step.  Where are those steps located?  In the user manual.  The 599 page user manual.

So those are the cons.  The pros still have it, but they are mostly long term while the cons are immediate.  I hope to be bragging about smooth sailing soon.

Blog Reborn

Disregard all former posts – this blog is about to get rolling again with a newfound theme of “Randomized Evaluations in Uganda”.  I am headed abroad on June 10th as a recent hire for Innovations for Poverty Action.  We are conducting an evaluation of a rainwater storage device being introduced by Relief International.  The idea is to use experimental methods to understand the market for the device and then use household surveys over time to determine the impact of the device on household welfare.

I will be living in Kamwenge, a district capital in the south-west corner of the country.   Rumor has it internet service is spotty at best, so posts and emails will be arriving in bulk whenever I make it to the provincial capital of Mbarara, about an hour to the south.  With two weeks to go before I fly I’ve got plenty to get in order.  Once I am in Uganda I will do my best to post regularly.  Until then.

About

A collection of observations, thoughts and experienced going back to 2010.