EL ESTRIBO, Paraguay — To battle poverty at home or abroad, we provide cash and food, clean water and medical care — and all of this is important. But a growing body of evidence suggests that the most fundamental need may be for something less tangible. It is hope.
When aid breaks the cycle of poverty, the mechanism often seems to be that it raises self-confidence and engenders a new sense of possibilities that people then work harder to achieve.
I’m on my annual win-a-trip journey, in which I take a student — this year it’s Mia Armstrong from Arizona State University — on a reporting trip to explore poverty and how to address it. We’ve slithered along muddy roads and waded through streams to reach this remote village in northern Paraguay to see an aid strategy that has proved astonishingly successful, because it gives families new hope.
It’s called the Graduation Approach, because the idea is to graduate people from poverty, not just treat its symptoms. Early results of a global randomized trial caused a stir in 2015, finding up to a 433 percent economic return — match that, hedge funds! — and now we are beginning to get equally impressive 10-year results.
The Graduation Approach identifies the poorest people and gives them a cow or help starting a small business, plus coaching, a mechanism to save, and other support. Those who participate sometimes seem reborn. They gain income not only from their cow or business, but also because their mental health improves and they work harder on unrelated projects.
In this village of indigenous people, we met Elodia Solano, 40, a lean woman with thick black hair framing a long face, who years ago had tumbled into a poverty trap of despair. Her husband had left her for another woman, so villagers mocked her. She was depressed and beaten down, and had just about given up.
Then the Graduation Approach came to the village, and she was encouraged to start a business making baskets and handbags and selling them in the distant capital, Asunción. It costs her $14 for a round-trip bus ticket to Asunción, but she can then sell her pile of baskets for more than $100. By village standards, she is now rolling in money.
Other women in the village envied her success and asked for advice, so Solano has taught 17 women how to make baskets. She is now admired as one of the village success stories.
“My husband came back to see if I would accept him back again,” Solano told us. “But I wouldn’t, because he had treated me so badly.” And she beamed.
Felicita Villalba, a neighbor, confirmed the story and added that now the villagers say that the husband had been a fool to leave such a smart wife.
Another woman in the village, Irene Gómez, 56, started a business making empanadas. She makes 60 of the meat buns at a time and then dispatches her husband to hike four miles to the road to sell them.
“Before, we often went hungry,” Gómez said. “And we’d be lucky to eat meat once or twice a month. Now we have food, my children have school uniforms and we eat meat every couple of days.”
Her daughter is finishing high school and the family plans to use empanada profits to send her to a university. She will be the first girl from the area to attend a university.
Angelina Cheppe, a local coordinator of the Graduation program, says that as women have gained incomes, their rising status has ended wife-beating.
“Now the men are afraid to hit the women,” she said. “Women have woken up.”
It’s not enough, of course, to tell people to be hopeful. Something is needed to break the despair; it can be education or microsavings groups or various kinds of assistance.
The initiative here reflects an effort by the Paraguay government and the United Nations to use the Graduation Approach to chip away at poverty among the country’s indigenous people. Jorge Coy, of the American aid group Trickle Up, which itself uses the Graduation Approach and is advising Paraguay on how to carry out the program, says that the psychological component is crucial.
“It’s not just training them to do something technical,” he said. “It’s teaching them something more profound — self-confidence.”
That’s a lesson that the United States can usefully absorb from rural Paraguay. Esther Duflo, an M.I.T. economist who has studied the Graduation Approach, notes that American programs for the poor are often stigmatizing and manage to rob people of self-esteem, not boost it.
If the United States wants to tackle poverty more effectively, it should restructure programs so that they bolster dignity. Early childhood programs do that, and so does the earned-income tax credit — and perhaps that’s why they are so effective.
Another lesson may lie in Paraguay’s focus on indigenous people. Across much of the world, from America to Australia, indigenous communities suffer deep poverty. Surely if Paraguay can find ways to seed hope in these communities, the rich world can as well.
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Nicholas Kristof has been a columnist for The Times since 2001. He has won two Pulitzer Prizes, for his coverage of China and of the genocide in Darfur. You can sign up for his free, twice-weekly email newsletter and follow him on Instagram. @NickKristof • Facebook
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