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There are two broad views as to why people stay poor. One emphasizes differences in fundamentals, such as ability, talent, or motivation. The other, the poverty traps view, emphasizes differences in opportunities which stem from access to wealth. To test between these two views, we exploit a large-scale, randomized asset transfer and an 11-year panel of 6,000 households who begin in extreme poverty. The setting is rural Bangladesh and the assets are cows. The data supports the poverty traps view—we identify a threshold level of initial assets above which households accumulate assets, take on better occupations (from casual labor in agriculture or domestic services to running small livestock businesses), and grow out of poverty. The reverse happens for those below the threshold. Structural estimation of an occupational choice model reveals that almost all beneficiaries are misallocated in the work they do at baseline and that the gains arising from eliminating misallocation would far exceed the program costs. Our findings imply that large transfers which create better jobs for the poor are an effective means of getting people out of poverty traps and reducing global poverty.

No abstract

This paper examines the link between electoral incentives and environmental degradation by exploiting a satellite dataset on 107,000 forest fires and 879 asynchronous district elections in Indonesia. Fires represent a cheap but illegal means of converting forested land to other uses, but they risk burning out of control and creating substantial negative environmental externalities. We find a significant electoral cycle in forest fires. Ignitions and area burned decline during election years but steeply increase in the year after. The results suggest that politicians may suppress this activity at times when it might particularly dent their electoral chances.

About 3ie The International Initiative for Impact Evaluation (3ie) promotes evidence-informed, equitable, inclusive and sustainable development. We support the generation and effective use of high-quality evidence to inform decision-making and improve the lives of people living in poverty in low-and middle-income countries. We provide guidance and support to produce, synthesise and quality assure evidence of what works, for whom, how, why and at what cost. 3ie impact evaluations 3ie-supported impact evaluations assess the difference a development intervention has made to social and economic outcomes. 3ie is committed to funding rigorous evaluations that include a theory-based design and that use the most appropriate mix of methods to capture outcomes and are useful in complex development contexts. About this report 3ie accepted the final version of the report, Rebuilding the social compact: urban service delivery and property taxes in Pakistan, as partial fulfilment of requirements under grant DPW1.1005 awarded through Development Priorities Window 1. The report is technically sound and 3ie is making it available to the public in this final report version as it was received. No further work has been done. The 3ie technical quality assurance team for this report comprises Francis Rathinam, Neeta Goel, Kanika Jha Kingra and Deeksha Ahuja, an anonymous external impact evaluation design expert reviewer and an anonymous external sector expert reviewer, with overall technical supervision by Marie Gaarder. The 3ie editorial production team for this report comprises Anushruti Ganguly and Akarsh Gupta.