Gabriel Demombynes's blog

There is a tremendous success story in Sub-Saharan Africa that has only barely been recognized. Infant and under-5 mortality has plummeted in many countries in the region in recent years.

The phenomenal success of Kenya’s M-PESA system, which allows people to store and transfer funds via electronic accounts that they access via mobile phones, has raised hopes that mobile money may provide a way for the poor to access basic banking services. In an earlier post, I presented findings from my recent working paper with Aaron Thegeya, showing that a remarkable 73% of Kenyan adults use mobile money, and nearly a quarter use it every day. 

We also show that savings with a simple M-PESA account is common, with 2/3 of M-PESA users reporting that they save in some form with M-PESA. We see some mild evidence that M-PESA may increase savings: controlling for various characteristics, those who are registered for M-PESA are 32 percent more likely to report some savings activity.

Why do people save with M-PESA when it doesn’t pay interest?  A possible explanation comes from an experimental study on health savings (not involving M-PESA).  

At an event at the New America Foundation in DC  and in a recent article in Slate, Sascha Meinrath and Jamie Zimmerman argue that mobile technology in general and mobile money in particular have been overhyped as game-changing tools for the poor.

They claim that mobile technology “creates a greater economic divide” and that Kenya’s M-PESA mobile money system is “leaving a substantial portion of the nation’s poor in even more dire straits.”

A tremendous amount of development research is all but unknown in the countries that are the subject of that research. In Kenya, this is the case with path-breaking papers like the Kremer-Miguel Worms study and the Cohen-Dupas insecticide-treated net pricing experiment.

To increase the visibility of such policy-relevant work, we’re producing a "Kenya 2011 Poverty Research Review" that will be published early next year as part of our larger Poverty Update report, which will be widely publicized in Kenya.

The Poverty Research Review will give an overview of poverty-related research on Kenya published in 2011 in journals or working paper series. There is a wide pool of work to draw from: a search on "Kenya" and "poverty" in Google Scholar produces 12,900 references for works produced in 2011.

As an experiment, I’m going to try drawing from the wisdom of crowds for this project.  Please help me with your suggestions for high-quality papers on poverty-related issues in Kenya that you would like to see highlighted in our review.

by Michael Clemens and Gabriel Demombynes

Contrary to persistent perceptions that sub-Saharan Africa is mired in intractable misery, many of the region’s countries have experienced sustained economic growth, deepening democracy, improving governance, and decreasing poverty in recent years.

To take just one aspect of the African Renaissance, in five of six countries for which recent data is available—Malawi, Tanzania, Rwanda, Nigeria, and Ghana—rates of child malnutrition as measured by stunting have declined in the last decade. Because so much is changing in Africa, it is crucial to take this “background” change into account when evaluating the impact of local policy interventions.

This is evident when considering the Millennium Villages Project (MVP) evaluation, which we critiqued in a peer-reviewed journal article. Recently, we examined the three peer-reviewed papers that dealt with the MVP’s impacts and showed that they do not back up the project’s claims of large impacts, in part because they don’t take “background” change into account.

There’s a new development: The MVP has just released its first study that does try to distinguish changes observed at its village sites from broader changes happening across Africa.

Emerging from decades of violent conflict, with more than half its population living below the national poverty line and three quarters of the population never having attended school, South Sudan may seem like an unlikely place for setting up a successful, modern manufacturing business.

However, we recently saw an exciting example of what the private sector can achieve even under these conditions:  the Southern Sudan Beverages, Ltd (SSBL) plant, which produces beer, soft drinks, and bottled water for the local market.

SSBL started production in 2009 after investing $37 million to build the facility; a $15 million expansion is now underway.  The plant looks like a modern manufacturing enterprise—with one exception: it is largely self-contained, with its own generators and a treatment plant for the water that is pumped up from the White Nile.

In March at Oxford, I had the opportunity to debate John McArthur on the Millennium Villages Project (MVP) evaluation, which is the subject of a paper I co-authored with Michael Clemens of the Center for Global Development. The just-published newsletter (pdf)  of Oxford’s Center for the Study of African Economies has a nice summary of the debate, and video from the event is here.

As a brief follow-up to Shanta's post on the economic policy workshop in South Sudan, here is the World Bank's recent poverty profile for the soon-to-be-country. I've worked closely with the Southern Sudan Centre for Census, Statistics and Evaluation, which collected the data underlying the poverty profile.

I am at Oxford for the annual conference of the Center for Study of African Economies, which runs through Tuesday.

Here's the program with links to many of the conference papers.

Plenary sessions, including my presentation on the Millennium Village Project evaluation, will be broadcast live on the web, and the recording will later be posted on the CSAE website.

I'll present a short version of the paper, which was co-authored with Michael Clemens of the Center for Global Development. This will be followed by a presentation from John McArthur, CEO of the Millenium Promise organization. Our session will be the last of the conference, on Tuesday 6-7 p.m. UK time (2-4 pm East Coast U.S. time.) 

For background, here are the first, second, third, and fourth earlier posts on the paper and check out our podcast, the MVP response, and commentary from Julian Jamison, Chris Blattman, Eric Green, and Bill Easterly and Laura Freschi.

Here's also video of an extended talk on the MV paper which Michael and I gave in DC in December:

We’re in the middle of an unusual data collection exercise, which we’ve called the Southern Sudan Experimental Phone Survey (SSEPS). To get a sense of how the survey works, see this photo essay. The work has been conducted in part with funds from the Poverty and Social Impact Analysis Multi-Donor Trust Fund.

In November, in conjunction with the Southern Sudan Centre for Census, Statistics and Evaluation, we delivered mobile phones to 1000 households in the 10 state capitals of Southern Sudan. Each month starting last December, Sudanese interviewers from a call center in Nairobi have phoned respondents on those phones to collect information on their economic situation, security, outlook, and other topics.