So this past week I was in Ghana following up on some of the projects I am working on there with one of my colleagues. We were designing an agricultural impact evaluation with some of our counterparts, following up on the analysis of the second round of a land tenure impact evaluation and a financial literacy intervention, and exploring the possibility of some work in the rural financial sector. In no particular order, here are some of the things I learned and some things I am still wondering about:
- We started the week with trying to tackle a number of interventions. The one that was particularly hard to crack was one that would increase transactions/market activities by bringing investors into rural areas where they hadn’t been. Trying to nail the effects of these interventions while (hopefully) getting a good handle on the full range of spillovers is tough since the better this kind of intervention is, the more likely the effects will really spill over. I’ll come back to this in an upcoming post when I talk about trade interventions.
- If you aren’t going to the randomization directly with the implementation partner, do not give them the list of controls. Working with one implementation partner, I had some vision in my mind of how they were totally understanding the process. I even spent an hour on the phone walking them through the list that I sent. And I have done this before (and in some cases it was totally necessary). But this time I sent them a list that had treatment and control (with labels) and when I got the initial roster of participants back from them and did a match, it wasn’t clear that the list had been followed. As my younger (and wiser) colleague pointed out: never give out the control list (in this case this was doubly stupid because it was a two arm intervention and the previous list they had received (there were phases involved) indicated the treatment status in the other intervention). So lesson learned (sometimes it’s necessary but otherwise…), let’s see if we can figure out what happened and what we can salvage.
- Out in the rural areas, mobile money transfers really buy peace of mind. We were talking to a fellow who does around $1200 dollars in inventory purchases every time he goes to the capital (which was far from where we were). And he sends the cash to himself using a mobile money service. I thought this was perhaps an overreaction (this is a quiet part of Ghana) until the next morning we passed a burnt patch on the side of the road and the driver told us that last night there had been armed robbers on this stretch of the road holding up cars as they passed.
- People buy cell phone credit in really small amounts. Really small. I guess mobile phone markets in some developing countries are a lot more competitive so this clearly goes farther than say a PPP adjusted amount in developed countries, but I wonder about the transaction costs (finding an agent who is in, etc.).
- Salaried workers in Ghana engage in pay-day loans (these are loans which are basically high interest salary advances – for a review of these in the U.S. see for example the work by John Caskey such as this introduction to the topic). They work somewhat differently in Ghana than they do in the U.S. In Ghana, the ones we picked up on were happening in the formal sector in the form of short term, high interest over-drafts extended to clients who direct deposited their salaries into the bank. The folks who do this seem to do this persistently, and they are not the poorest. Understanding why they do this (at those interest rates) seems worth understanding and worth comparing to the U.S. literature.
- We were checking on the cash flow of some rural businesses. While I was surprised at the low turnover of cell phone airtime retailers, I was also surprised by some folks who had a lot of cash on hand. One guy, who we tracked down farming by the side of the road, was a cell phone airtime distributor (selling on to retail agents). He said he was turning over around $2000 per day. Another woman we met was running an electronic transfer business – people would come to her with money and she would transfer it to another location (both for pick up by the client and by others, it appeared). She (and her husband who seemed to be in charge of the business) turn over around $175 per day or two. For this, they seem to get a straight commission of around $3. Then they have to go buy the credit (on their phone) to do this again. This requires at least a half hour trip each way, each time. So it’s interesting that they have to pay it forward (this solves the enforcement problem of the transfer company), but what puzzled me was why they didn’t build up to more stock of credit on the phone and cut down on trips (she had just come back from the farm so they clearly have other economic activities). Alas, we were late for a meeting, or we could have spent some time figuring that out.
And on the long drive back, as I watched the windscreen fill up with splattered bugs, and I tried to figure all this stuff out, it occurred to me that that country song did have it right – sometimes you are the windshield and sometimes, the bug.