Preparing for Shocks through Universal Basic Income: Evidence from Kenya
Nidhi Parekh, J-PAL's Project Director for the Digital Identification and Finance Initiative in Africa, discusses research on Universal Basic Income in Kenya.
A weak internet connection did not stop J-PAL Africa Scientific Director Tavneet Suri from getting her point across in our interview: Good research is done with an ear to the ground and a connection to the community. Calling in from her home country of Kenya, Tavneet emphasized how important it is for research to be grounded in ideas that arise from local communities and contexts.
“We can have our econ ‘hats’ on with some theory in mind, but without a deep understanding of the context and constraints in the particular environment you're working in, it's hard to design interventions that might be useful,” Tavneet explained.
Tavneet’s first interaction with J-PAL occurred when, as an early-career researcher, she was asked to assist with an evaluation in Sierra Leone by J-PAL’s then-executive director Rachel Glennerster. “It wasn’t my first field project, but it was a great opportunity and a new environment for me,” Tavneet said. After gaining more experience leading her own randomized evaluations, she joined the affiliate network and became a member of J-PAL’s Board of Directors.
Now an associate professor in applied economics at the Massachusetts Institute of Technology, Tavneet grew up in Kenya. For her, pursuing a career related to research and policy was a natural evolution of her graduate studies in development economics. Her recent research has focused on how mobile money can help people adapt to unexpected shocks in the short term and build up investments and savings to improve their incomes in the long term.
This includes seminal research examining the impacts of universal basic income in partnership with the NGO GiveDirectly. In collaboration with GiveDirectly, Tavneet and her team evaluated how unconditional cash transfers impacted low-income families in Kenya in the face of economic uncertainty brought on by the COVID-19 pandemic. They found overall positive impacts on food security and both physical and mental health.
Tavneet’s work at J-PAL extends beyond field research. In addition to serving as one of the scientific directors of J-PAL Africa, she co-chairs three J-PAL initiatives that aim to generate new research and inform policy decisions: the Agricultural Technology Adoption Initiative, the Digital Identification and Finance Initiative (DigiFI), and the Digital Agricultural Innovations and Services Initiative (DAISI).
Of all of the valuable work Tavneet has led at J-PAL, she describes the African Scholars Program as “dear to my heart.” Through DigiFI, J-PAL Africa dedicated a research fund for researchers who have completed a PhD in economics or a related field and are based at an African academic institution to pursue research on the continent and help build stronger policy connections on the ground. The program was unlike anything any other organization had done before in applied economics, so Tavneet and the J-PAL team had to think creatively about how to structure the program to alleviate the real constraints Africa-based scholars faced when launching new research projects.
“Building the African Scholars Program has been my favorite thing to do over the past couple years, and we couldn’t have done it without the infrastructure that J-PAL provides,” Tavneet said, referring to J-PAL’s vast funding and research network. The model quickly proved to be successful; other initiatives at J-PAL have since launched similar programs to help increase funding for locally-based researchers.
Tavneet is now exploring opportunities to bring the African Scholars Program to DAISI, launched in December 2021. The initiative supports innovative, policy-relevant research on bundled digital agricultural solutions and services for small-scale farmers. Incorporating the knowledge and experience of locally-based researchers will be essential to developing and evaluating new interventions.
As Tavneet prepares to pass along some of the hats she wears at J-PAL to newer affiliates, she emphasized how much she has enjoyed this work. According to Tavneet, J-PAL’s ability to connect researchers passionate about similar issues makes research “a lot easier” and more collaborative. “J-PAL as an organization really cares about having an impact, and understands why having a presence on the ground is so important to achieving that impact.”
Nidhi Parekh, J-PAL's Project Director for the Digital Identification and Finance Initiative in Africa, discusses research on Universal Basic Income in Kenya.
J-PAL Africa, based at the University of Cape Town, recently launched the Digital Identification and Finance Research Initiative (DigiFI Africa). Supported by the Bill and Melinda Gates Foundation, this USD$7 million research fund is designed to study the impact of innovative government and private sector payment systems and digital identification (ID) reforms on citizens and governments across Africa.
J-PAL Africa, based at the University of Cape Town, recently launched the Digital Identification and Finance Research Initiative (DigiFI Africa). Supported by the Bill and Melinda Gates Foundation, this USD$7 million research fund is designed to study the impact of innovative government and private sector payment systems and digital identification (ID) reforms on citizens and governments across Africa.
Policymakers across Africa are increasingly investing in large-scale digital identification and digital payment systems. Because these systems are so new, little rigorous research exists on how best to design and implement such systems in low-income contexts. How do these rapid changes affect the lives of citizens? How can they best be structured to lead to the most benefit? Are any groups adversely affected by these reforms?
DigiFI Africa will cluster research around these questions, supporting research that evaluates impacts on citizens and generating results that provide guidance on critical design questions as reforms go to scale.
Improving efficiency in public spending through digital finance and digital identification has the potential to have large impacts across Africa. For example, these technological innovations have the potential to enhance record-keeping and transparency by collating administrative data and automating transactions, decreasing the potential for delays and errors in payment systems. Digitizing payments can reduce both the need for travel to access financial services and the time burden of engaging with administrative processes. In addition, digitizing the process of business registration and firm regulation can bring more firms into the tax system and raise revenues for the government.
The DigiFI Africa framing paper lays out the research agenda for the initiative. DigiFI Africa promotes research to address the following questions:
From a government’s perspective:
How can digital ID systems assist with targeting and efficiency in public programs? Do digital ID systems assist or hinder in reaching marginalized populations?
Can digital ID systems and digital payments reduce rent-seeking? What are the generalized equilibrium effects of digital payments on rent-seeking?
How can digital ID systems and digital payments assist in building incentive systems to motivate public servants?
How can payment design (such as targeting a specific household member to receive the transfer or changing timing the payment) affect its impact?
From a citizen’s perspective:
How do government services linked to digital IDs affect citizens? What are the best ways to design these linked services for the greatest impact at the lowest cost? Do digital ID systems and digital payments encourage or dissuade take-up of government programs?
Do digital ID systems improve the overall efficiency of government programs? If so, do these efficiency gains reduce poverty?
How do digital IDs affect voter participation, the fairness of elections and electoral outcomes? Does increased enfranchisement affect policy decisions?
Can digital IDs promote further digitization in financial systems and thus enhance financial inclusion? How does this affect short- and long-term poverty outcomes?
Can digital payment schemes empower traditionally weaker household members or affect the allocation of household resources?
Fiscal capacity:
Can expanding the formal economy increase the tax base through incentives and simplified processes introduced by digital payments and digital IDs?
Externalities:
What is the impact of digital ID and digital payment systems on market-level general equilibrium effects? What are their impacts on wages and employment? Are there impacts on occupational choice or migration?
What are the spillovers on non-beneficiaries of digital ID and digital payment systems?
Private sector impacts:
Can digital ID systems encourage businesses to enter the formal sector? Do these reforms reduce entry costs to entrepreneurship and enable productive investment?
Can digital ID systems help strengthen law-enforcing institutions and in turn affect private investment?
DigiFI Africa will run a competitive research fund with requests for proposals (RFPs) twice annually through 2022. The initiative will support researchers in conducting two phases of work:
Formative research that includes pilots and high-frequency monitoring systems to assess the status and health of digital payments and digital ID programs at various stages of reforms.
Rigorous randomized impact evaluations to test the impact of roll-outs of promising digital payment and digital ID reforms.
Funding is open to J-PAL affiliates, invited researchers, researchers with a PhD based at an academic institution in Sub-Saharan Africa (details here), and PhD students who have a J-PAL affiliate on their dissertation committee. The Round 1 RFP closes on September 20, 2019. For more information, contact Aimee Hare.
Through generous support from the Bill & Melinda Gates Foundation, J-PAL and UC Berkeley’s Center for Effective Global Action (CEGA) launched the new Digital Agricultural Innovations and Services Initiative (DAISI) to support innovative, policy-relevant research on the availability, quality, and reach of bundled digital agricultural solutions and services for small-scale agricultural producers.
Agriculture remains central to improving standards of living in low- and middle-income countries and reducing extreme poverty and hunger. A large body of research, some of which was funded through our Agricultural Technology Adoption Initiative, documents the importance of agricultural productivity for improvements in farmer welfare as well as longer-term development outcomes, a process often referred to as agricultural transformation.
Although these links between agricultural productivity, poverty reduction, and long-run economic development have been widely studied, agricultural productivity remains stagnant in sub-Saharan Africa and parts of South Asia. What is preventing the use of new agricultural technologies that would enable productivity increases? If multiple constraints bind, what products can alleviate these constraints at once? And, how can we leverage digital technology to do this, as well as to, more broadly, improve access options and service delivery?
Through generous support from the Bill & Melinda Gates Foundation, J-PAL and UC Berkeley’s Center for Effective Global Action (CEGA) launched the new Digital Agricultural Innovations and Services Initiative (DAISI) to support innovative, policy-relevant research on the availability, quality, and reach of bundled digital agricultural solutions and services for small-scale agricultural producers.
Chaired by researchers from both J-PAL and CEGA, including Jennifer Burney (UC San Diego), Robert Darko Osei (University of Ghana), and Tavneet Suri (MIT), the Digital Agricultural Innovations and Services Initiative (DAISI) will fund research to generate a rigorous evidence base on the impact of digital tools and bundled approaches on improving smallholder farmer outcomes, bolstering farmers’ resilience to climate change, connecting farmers to markets, and expanding commercialization in sub-Saharan Africa and South Asia.
In tackling this agenda, we will prioritize partnership development with commercial providers, private sector technology and fintech firms, telecommunications firms, governments, NGOs, and others to evaluate the impact of their services. DAISI will also focus on generating a body of gender-intentional agricultural research. In addition to social and cultural barriers, we aim to fund studies that address unique constraints for women, such as access to timely information and financing for agricultural investments, financial and digital literacy, control over agricultural income, market linkages and networks, and more. Reducing barriers that limit women’s agency, influence, and decision-making power will be critical to improving economic and welfare outcomes for participating women farmers.
In an effort to further diversify our research network, DAISI will host a Regional Scholars program—similar to the African Scholars programs from DigiFi Africa and JOI—offering dedicated funding and capacity building opportunities for researchers who have completed a PhD in an empirical discipline and currently hold an academic or research position at a university based in a South Asian or African country.
In addition to full-scale randomized evaluations, pilots, and proposal development or travel grants, DAISI will also fund two new proposal categories to respond to the rapid learning needs of private sector providers—rapid A/B product tests and scaling grants to adapt a program for scale or to pilot a scalable, evidence-informed solution. In these and many other ways, DAISI will push our agricultural work into new areas and expand our ability to engage with stakeholders across sub-Saharan Africa and Asia.
Bundled models and digital platforms that connect farmers to multiple services at once reduce barriers to access both for farmers seeking services, and service providers reaching farmers. When we refer to digital services, we mean platforms that leverage mobile phones, the internet and other digital tools to connect farmers and other actors in a value chain.
Implementers are increasingly using these digital technologies to deliver information, financial services, insurance, trading platforms, local market connections, among others. Often these services are bundled or integrated under the same program, which can be a timely and lower-cost way to reach a large number of farmers. It could also be an effective way to address the multiple constraints farmers face in these environments.
Despite rapid development and growth of implementers in this space, the evidence base on which digitally-enabled services, service targeting mechanisms, and delivery models are effective at improving smallholder farmers’ welfare remains limited. There is even less evidence available on how to reach, benefit, and empower women through such services.
Much as bundled digital agricultural services are starting to appear on the landscape, often provided by the private sector, we still have a lot to learn about bundling. Which bundles are most effective, and for which farmers? How does shifting farming households’ production and marketing decisions (specifically through digital services) affect intra-household decision-making, women’s welfare, and empowerment? And, what are the feasible business models to deliver affordable, scalable solutions to small-scale producers? DAISI will focus on answering these, and many more, critical questions to push our collective understanding of how to best design tools and connect farmers with the services they need in an increasingly digital world.
Through strong partnerships with researchers, the private sector, a variety of service providers, and policymakers, DAISI aims to address outstanding questions relevant to policy and practice in sub-Saharan Africa and South Asia. Stay tuned over the next few months as we share more information on our work and opportunities for funding research on key questions related to bundled and digital agricultural services!
If you’re interested in partnering with us, please contact [email protected].