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Machine learning

How can machine learning and artificial intelligence be used in development interventions and impact evaluations?

David McKenzie's picture

Last Thursday I attended a conference on AI and Development organized by CEGA, DIME, and the World Bank’s Big Data groups (website, where they will also add video). This followed a World Bank policy research talk last week by Olivier Dupriez on “Machine Learning and the Future of Poverty Prediction” (video, slides). These events highlighted a lot of fast-emerging work, which I thought, given this blog’s focus, I would try to summarize through the lens of thinking about how it might help us in designing development interventions and impact evaluations.

A typical impact evaluation works with a sample S to give them a treatment Treat, and is interested in estimating something like:
Y(i,t) = b(i,t)*Treat(i,t) +D’X(i,t) for units i in the sample S
We can think of machine learning and artificial intelligence as possibly affecting every term in this expression:

Can predicting successful entrepreneurship go beyond “choose smart guys in their 30s”? Comparing machine learning and expert judge predictions

David McKenzie's picture

Business plan competitions have increasingly become one policy option used to identify and support high-growth potential businesses. For example, the World Bank has helped design and support these programs in a number of sub-Saharan African countries, including Côte d’Ivoire, Gabon, Guinea-Bissau, Kenya, Nigeria, Rwanda, Senegal, Somalia, South Sudan, Tanzania, and Uganda. These competitions often attract large numbers of applications, raising the question of how do you identify which business owners are most likely to succeed?

In a recent working paper, Dario Sansone and I compare three different approaches to answering this question, in the context of Nigeria’s YouWiN! program. Nigerians aged 18 to 40 could apply with either a new or existing business. The first year of this program attracted almost 24,000 applications, and the third year over 100,000 applications. After a preliminary screening and scoring, the top 6,000 were invited to a 4-day business plan training workshop, and then could submit business plans, with 1,200 winners each chosen to receive an average of US$50,000 each. We use data from the first year of this program, together with follow-up surveys over three years, to determine how well different approaches would do in predicting which entrants will have the most successful businesses.