Ending Global Poverty: An Interview with Economist Paul Niehaus ’04

Paul Niehaus ’04, PhD ’09 is an Associate Professor of Economics at UCSD and is the co-founder and president of GiveDirectly, a top-rated nonprofit that sends money to the extreme poor via cash transfers to mobile money cell phone accounts. We talked with him about how his Christian faith affects his academic and charitable work.

Ichthus: You co-founded GiveDirectly while studying development economics in grad school at Harvard. How did you get the idea, and why do you think it has been so successful?

PN: The early 2000s were an incredibly exciting time to study development economics because we were just starting to use experimental testing in a big way – like clinical trials in medicine, or A/B testing in tech. And so we were learning all sorts of things – things we thought would work that didn’t, things we thought wouldn’t work that did. And one thing my co-founders and I saw was that across dozens of these experimental tests, simply giving money to poor people and letting them decide how to use it was one of those things that worked really well.

At the same time we got exposed to what was happening in last-mile digital payments – whether through mobile money in Africa, or biometric identification in Asia, we’re increasingly living in a world where we can pay anyone anywhere safely and securely. We looked at those trends together and said, this has the potential to reshape pretty profoundly the way we fight poverty.

Ichthus: What are some ways that your Christian faith has affected your work?

PN: I think it drove the big picture decision to focus on ending extreme poverty. From there, most of the decisions have been pragmatic. What are the levers to pull? Do we need more thinking or more doing?

Ichthus: Recently, many people have embraced the Effective Altruism (EA) movement, which focuses on using reason and evidence to do the most good possible. Many people in this broadly secular movement are fans of GiveDirectly because of the solid evidence for its effectiveness at helping the world’s poorest people. Do you think Christians can or should be effective altruists?

PN: I think lowercase effective altruism in its most abstract formulation is pretty hard to argue with. Is anyone in favor of ineffective altruism? Certainly for Christians the command to love your neighbor is one of the top two after love God (Mark 12), and our neighbor is defined as anyone we have the opportunity to help (Luke 10). These teachings have quite a similar moral thrust to philosopher Peter Singer’s famous drowning child metaphor.

Where I think differences emerge and not everyone aligns as an uppercase Effective Altruist is the definition of what is the good for someone else. Reasonable people will disagree. Indeed many uppercase EAs disagree with each other. But there are enough goals on which I think we can all agree – and I think ending extreme poverty is one – that in those areas we should all be able to embrace the increased focus on what actually works.

Ichthus: The standard EA framework leaves any benefit of Christian evangelism out of the calculation for what is “good.” Do you think this is an issue?

PN: Very deep waters, but my short answer is that I think most Christian communities of which I’ve been a part put more emphasis on evangelism relative to service and social justice than I see in the Gospels.

Ichthus: Recently, many well-off American Christians have traveled to low-income countries for one-to-two-week mission trips in which they work on development projects. These trips have been criticized as costly “service tourism’’ that can hurt more than help. What do you think?

PN: I suspect it’s nearly impossible to justify these trips on direct impact grounds. Just to give some sense in the context of economic development, a single plane trip to Africa costs more than a low-income family lives on for two years – so you have to believe that there is a way to bring in an outsider with little knowledge of the context for a couple of weeks and have an impact equivalent to doubling someone’s standard of living for two years. If it were that easy we’d have solved poverty long ago. So I think the argument for poverty tourism has to rest on the hope that taking these trips makes people more generous afterwards. And I haven’t seen evidence on that one way or the other.

Ichthus: When you were an undergrad, you co-wrote a piece in the Ichthus’ first issue, in 2004. Your piece, “Right and Wrong: God, Law, and the Secular State,” explored the relationship between Christians conviction and secular law. Related to this issue, should American Christians should ask their government to spend more resources on the global poor?

PN: The core point we wanted to make in that article was that the Bible doesn’t support a reflexive “if it’s immoral then it should be illegal” approach to lawmaking, especially in a pluralistic society. You need a more sophisticated framework for thinking about the relationship between ethics and the law than we often hear in public discourse.

I don’t know what the exact numbers should be, but I do feel strongly that to the extent Christian voices are heard in politics they are not heard enough talking about issues like poverty, criminal justice, refugees. It’s abundantly clear throughout both the Old Testament and the New that God cares passionately about these things.

Ichthus: Thanks for speaking with us. To close, could you tell us about some of your current projects?

PN: At GiveDirectly we’re coming off a strong 2015, with $51M in revenue and some great new team members. We’ll continue building that team, grow revenue and cash delivered 2x year on year, and launch new projects with our institutional partners to help them understand and test the role cash transfers play in their work. We’ll also announce a major new impact evaluation, testing a completely different approach to transfers.

In 2014 my GiveDirectly co-founder Michael Faye and I also founded a Segovia, a technology firm, to build the technical architecture we need to transition aid towards more electronic cash payments. Segovia closed its A round this year, the product is looking beautiful, and 2016 will be whirlwind of deployments supporting transfers across the globe – refugees, Ebola victims, workfare participants.

On the research front my focus has been on India, where the Modi administration is pushing to transition away from its legacy regime of subsidizing specific things (e.g., food, fertilizer) and towards a policy of direct transfers of cash. I think this agenda has enormous potential but also enormous risk, as India does not yet have the last-mile payments infrastructure you need. So we’re working with the government to build in feedback loops and rigorous evaluation, so that Delhi knows what is actually happening on the ground and how it’s affecting people’s lives.


Peter Hickman ’16 was an Applied Math concentrator in Leverett House and is editor-in-chief emeritus of the Ichthus. He is currently an Economics Pre-Doctoral Research Fellow at Harvard.

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