Asset transfer programme for the ultra poor: a randomized control trial evaluation

Abstract

Challenging the Frontiers of Poverty Reduction (CFPR), an innovative approach to address extreme poverty, was launched in 2002 in rural Bangladesh. Evaluation of the first phase of the programme revealed that livelihoods of the participant households improved remarkably due to the intervention. But a number of shortcomings were identified regarding the evaluation method of the first phase, particularly due to adopting non-experimental evaluation design. This paper provides further evidence on the effectiveness of CFPR using randomized control trial design, which efficiently addressed much of the data limitation of earlier studies. Using 2007-09 panel data, this paper shows that the programme reduced the vulnerability of the participant households by raising their food expenditure and preparing livelihood pathways for them by generating self-employment and productive asset base including financial, physical and human capital. Remarkable effect on per capita income was observed. Positive impacts on natural assets like land acquisition through mortgaged-in, physical assets like livestock, financial assets like borrowing from NGOs, accumulation of savings and lending out in terms of cash or in kind have also been observed. However, evaluation shows that the programme did not have visible impact on education, a finding which is almost similar to the short-run evaluation of the CFPR phase I. This is probably not surprising because the programme does not provide any direct support on education. However, given that income of the participant household is increasing over time at an impressive rate, this may translate into human capital development through increase in education expenditure in the long-run.