Published on Development Impact

Weekly links July 3: JDE’s pre-results review pilot, unintended effects of foreign aid policies, CCTs for career guidance not increasing employment, and more…

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  • In the category of “unintended, but certainly NOT unanticipated” effects of policies, Brooks, Bendavid, and Miller in Lancet Global Health give us the effects of the “Mexico City Policy” of the U.S., which prohibited foreign assistance to any organization performing or providing counseling on abortion. Since the policy affected a lot of organizations that also provide family planning services, the paper shows that use of modern contraception dropped, while pregnancies and abortions increased when the policy was in effect in countries highly exposed to the policy. While one can have a view that it is desirable to reduce the number of abortions, banning funding to organizations that provide family planning services is not an effective tool towards such a goal and, may in fact exacerbate the issue. Much of the increase in abortions as a result of this policy may have been in unsafe abortions, which, unlike safe ones, have major negative health consequences, contributing significantly to maternal mortality.
  • In an example of studies showing that CCTs can improve short-term, intermediate goals while failing to achieve final outcomes, Aeberhardt et al. find that a monthly cash transfer targeted to young, unskilled jobseekers for a two-year period totaling up to 4,800 Euros, conditional on their participation in the French national career guidance program increased their attendance in (and reduced dropout rates from) this program sharply, while increasing job offers, career building workshops, and vocational training proposed to the beneficiaries. “However, the jobseekers' response to these increased opportunities for employability investment is a precisely estimated zero. Moreover, we observe a significant reduction in employment over the first six months.” The authors suggest present bias and impatience, and not financial constraints, as potential culprits behind the findings and propose conditioning incentives directly on outcomes of interest.

We’re off until Monday, July 8. Enjoy your 4th of July weekend…


Berk Özler

Lead Economist, Development Research Group, World Bank

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