Super Crunchers by Ian Ayres Page B

developing countries have taken the lead in embracing the randomizing method. A test that would cost millions of dollars in the U.S. can be undertaken for a fraction of the cost in the Third World.
    The spread of randomized testing is also due to the hard work of the Poverty Action Lab. Founded at MIT in 2003 by Abhijit Banerjee, Esther Duflo, and Sendhil Mullainathan, the Poverty Action Lab is devoted to using randomized trials to test what development strategies actually work. Their motto is “translating research into action.” By partnering with non-profit organizations around the world, in just a short time the lab has been able to crank out dozens of tests on everything from public health measures and micro-credit lending to AIDS prevention and fertilizer use.
    The driving force behind the lab is Esther Duflo. Esther has endless energy. A wiry mountain climber (good enough to summit at Mount Kenya), she also has been rated the best young economist from France, and is the recipient of one of the lucrative MacArthur “Genius” fellowships. Esther has been tireless in convincing NGOs (non-government organizations) to condition their subsidies on randomized testing.
    The use of randomized tests to reduce poverty sometimes raises ethical concerns—because some destitute families are capriciously denied the benefits of the treatment. In fact, what could be more capricious than a coin flip? Duflo counters, “In most instances we do not know whether the program will work or whether it’s the best use of the money.” By conducting a small randomized pilot study, the NGO can figure out whether it’s worthwhile to “scale” the project—that is, to apply the intervention on a non-randomized basis to the entire country. Michael Kremer, a lab affiliate, sums it up nicely: “Development goes through a lot of fads. We need to have evidence on what works.”
    Other countries can sometimes test policies that U.S. courts would never allow. Since 1998, India has mandated that the chief (the
Pradhan
) in one-third of village councils has to be a woman. The villages with set aside (or “reserved”) female chiefs were selected at random.
Voilà,
we have another natural experiment which can be analyzed simply by comparing villages with and without chiefs who were mandated to be female. Turns out the mandated women leaders were more likely to invest in infrastructure that was tied to the daily burdens of women—obtaining water and fuel—while male chiefs were more likely to invest in education.
    Esther has also helped tackle the problem of rampant teacher absenteeism in Indian schools. A non-profit organization,
Seva Mandir,
has been instrumental in establishing single-teacher schoolhouses in remote rural areas where students have no access to government education. Yet massive teacher absenteeism has undermined the effectiveness of these schools. In some states, teachers simply don’t show up for class about half the time.
    Esther decided to see if cameras might help. She took 120 of
Seva Mandir
’s single-teacher schools and in half of them she gave the teacher a camera with a tamper-proof date and time stamp. The teachers at the “camera schools” were instructed to have one of the children photograph the teacher with other students at the beginning and end of each school day. The salary of a teacher at the camera school was a direct function of his or her attendance.
    A little monitoring went a long way. Cameras had an immediate positive effect. “As soon as the program started in 2004,” Esther told me, “the absentee rate of teachers fell from 40 percent (a very high number) to 20 percent. And magically, now it has been going on since then and that 20 percent is always there.” Better yet, students at the camera schools learned more. A year after the program, the kids at camera schools scored substantially higher than their counterparts