An Experimental Study of the Indirect and General Equilibrium Effects of an Aid Program in Rural Uganda

PI display: 
Chris Blattman
March 31, 2011 through June 30, 2011
In the field
Location details: 
Africa - Uganda
Aid programs in developing countries
Planning document / hypotheses: 
We have already evaluated the direct impacts of the aid program on treatment and control individuals. We propose to return to the 120 villages to survey non-beneficiaries in March and April 2011, before the NGO enrolls the waitlist control villages into the program. First, we hypothesize that poor but ineligible households will benefit from their neighbors’ higher income by receiving more transfers, by borrowing more from them, and by reducing their precautionary savings. Second, we hypothesize that the introduction of more traders and home production of foodstuffs and simple household items will lower village-level prices of these items.
Sample size: 
Sample recruitment: 
120 villages, 25 households from each village, interviews with two adults in each houehold
We propose to use the experimental design of a successful aid program in rural Uganda to examine spillovers and general equilibrium impacts. The program, targeted at ultra-poor women in northern Uganda, shifted a large proportion of women into trading occupations, and significantly raised their incomes and employment. These direct impacts have been demonstrated through a randomized evaluation. Based on our field observations, however, we also predict potentially large impacts on the general prices of goods in the village, transfers to other households, and the availability of credit—and a consequent decline in general poverty levels in the community. We also predict, however, that not all will benefit from these spillovers. In particular, we worry that pre-existing small traders (many of whom are poor households themselves) will see their relative poverty increase.
Area of study: 
Last updated: 
April 6, 2011