A study in Nicaragua shows that interactions with female leaders facilitated raising aspirations for The Project families, which in turn led to better The Nicaraguan government created a one-year productive cash transfer program targeting outcomes for children agricultural households affected by a severe drought. In the short term, the program sought to help families cope with immediate needs by giving them cash transfers. For the longer term, the program introduced interventions aimed at improving income opportunities and diversification. To test alternative solutions, households were randomly assigned into different groups. The first received a regular conditional cash transfer (CCT) with the condition that the children in the family attend primary school and regular health check- Social Multipliers at Work: ups. The second group received the CCT and a scholarship for vocational training. The third group Improving Children’s received the CCT plus a lump-sum grant to develop a non-agricultural business; the fourth was the control Outcomes Through group. This approach effectively allocated interactions with promotoras – or volunteer female treatment Aspirations and Role Models coordinators – and other existing female leaders in the communities to program beneficiaries, thus randomly exposing beneficiary households to leaders with Every year, governments spend large amounts different levels of treatment intensity. of resources on development programs that aim to change poor households’ behaviors and attitudes Unexpectedly, the involvement of eligible local leaders toward investment in the education, health, and – potential role models to those in the study – created nutrition of their children as a way to end the cycle benefits for both leaders and program participants. of poverty. One key mechanism that can achieve this Physical proximity, and the fact that the program is working to raise aspirations. But how do you do formalized social interactions among beneficiaries that in practice? through intervention-mandated events and workshops, made it easier for leaders to interact with other In this project, together with Karen Macours of the beneficiaries (especially with those that received the Paris School of Economics and the Ministry of Family same package). in Nicaragua, we find that beneficiary interactions with female role models in very low-income settings of A question emerged: would these interactions affect Nicaragua had an enormous impact in raising the bar for changes in attitudes towards the future, or higher the rest of the community. By helping to increase the program impacts over and above any program impact? aspirations of program beneficiaries, interactions with Would any short-term effects be sustainable after the leaders were key to improving and sustaining outcomes program ended? We study the results from two different for children in education and health two years after the periods: nine months during program implementation, program ended. and two years after the program ended. The Results In the short run, female leaders helped Sustained interaction matters. multiply the impacts of the program. The results indicate that there are no significant long- After nine months, the program was found to improve term impacts on human capital investments in the several child outcomes. But beneficiaries who interacted overall program components when beneficiaries were more with female leaders that received the business not exposed to female leaders. But two years after the grant (by far the largest package) experienced additional transfers stopped, former beneficiaries of the business increases in the short-term program impacts on grant who live in the proximity of female leaders and households’ investments in education and nutrition. received the same package still show significantly higher For example, the social interactions added an additional investments in education and nutrition for their children. 9.7 percentage points in school attendance rates (on In fact, the magnitude of the social multiplier effect is top of the overall program impact), while expenditures similar, if not larger, than those while the intervention on food with higher nutritional value increased by two was in place. For example, families that interacted with additional percentage points. one additional female leader in their group and received the business grant spent 25% more on schooling for their children than families with no leaders. Social interactions also amplified program impacts on the income generation side. Income from non-agricultural activities among These social interactions seem to be directly impacting beneficiaries with proximity to an additional local attitudes towards the future, especially aspirations. leader who received the lump-sum grant grew by an additional US$3.30 per capita, while the average value Beneficiaries exposed to successful female leaders of a household’s animal stock increased by another sustained higher parental aspirations and expectations, US$12 – a big change in the context of extreme poverty. even two years after the program ended. Households And given that the average baseline income from in this group were 20 percentage points more likely to non-agricultural activities was $8.75 per capita, the aspire to see their children in a professional career and additional income attributed only to social interactions move forward in life compared to those that interacted was an astounding 40 percent! little with leader. Policy Implications One crucial driver of this program’s success is that More generally, the results have implications for it solves two very different problems concurrently: the debate on the feasibility and sustainability of resources and aspirations. If we design with only money using cash or asset transfer programs in low-income transfers in mind, the evidence suggests that the impact countries and program design. Some argue that such of the program will probably end shortly after the countries can simply not afford to distribute transfers transfers stop. Similarly, by working to raise aspirations to all poor households for long periods of time. The alone, there is good chance an question then becomes whether and intervention will fail by leaving how short-term transfer programs can beneficiaries with an aspiration gap. If we design with only be designed to launch households on Addressing both in tandem is key. money transfers in mind, a sustainable pathway out of poverty. Our study suggests that witnessing the evidence suggests that The sustainability of short-term interventions may depend on whether local success stories of upward the impact of the program they manage to change household’s mobility can be an important way will probably end shortly attitudes towards the future, as well to shift households’ aspirations and as related mental models and social investment behavior, particularly after the transfers stop. norms. Our evidence points to the fact when they are provided with the that designing such programs in ways resources to follow those examples. Natural that facilitate and encourage social interactions with leaders living in close proximity can be important local leaders where possible – and perhaps creating vehicles for such changes by motivating and opportunities for leadership roles where existing encouraging others and by providing examples leaders may be in short supply – may be important to that people aspireto follow. create such shifts in attitudes. About eMBeD The Mind, Behavior, and Development Unit (eMBeD), the World Bank’s behavioral sciences team in the Poverty and Equity Global Practice, works closely with project teams, governments, and other partners to diagnose, design, and evaluate behaviorally informed interventions. By collaborating with a worldwide network of scientists and practitioners, the eMBeD team provides answers to important economic and social questions, and contributes to the global effort to eliminate poverty and enhance equity. Stay Connected eMBeD@worldbank.org #embed_wb worldbank.org/embed bit.ly/eMBeDNews REFERENCES: Macours, Karen and Renos Vakis, 2014. “Changing Households’ Investments and Aspirations through Social Interactions: Evidence from a Randomized Transfer Program”, 2014. The Economic Journal, 124: 607–633 Macours,Karen, Norbert Schady and Renos Vakis, 2012. “Cash Transfers, Behavioral Changes, and Cognitive Development in Early Childhood: Evidence from a Randomized Experiment,” American Economic Journal: Applied Economics, American Economic Association, vol. 4(2), pages 247-73, April.