Planet Money Summer School: Economic Experiments in Kenya and Nigeria—Randomized Controlled Trials and Cash Grants for Entrepreneurs

▶ Original Episode: https://www.npr.org/2026/07/24/nx-s1-5894830/summer-school-kenya-nigeria-cash-development-experiment

July 25, 2026

The Start of the Summer School World Tour

Welcome to the Planet Money Summer School World Tour. This is the only international economics degree program where the invisible hand points you to the boarding gate. Final boarding calls are underway. Please run. Your host is Robert Smith. This summer, we are embarking on a journey to learn from other countries and find lessons that might be applicable to where we live. Each episode features a fascinating case study and a local tour guide who also happens to have an economics degree. Don't forget to take notes along the way. Everything discussed could appear on the final exam. If you pass the final exam, you, as well-traveled students, will receive a commemorative diploma adorned with every passport stamp.

The Reality of African Economies: Entrepreneurship and Demographics

Helping us with customs in Nairobi is Professor Tavneet Suri from the MIT Sloan School of Management. Depending on how you count, she is a fourth or fifth-generation Kenyan; her family migrated from India with the British in the late 1800s to work on road and railway construction and stayed in Kenya afterward. Beyond the charm of the land that drew her in, the reason Summer School is stopping in Nigeria and Kenya is that these are places where economics is not just theory, but a living reality. Commerce happens everywhere, with hundreds of people on every block selling various goods.

Professor Suri says that whenever she returns to African cities, she feels a unique vitality. The streets are overflowing with people trying to sell something or jumping onto buses, and entrepreneurship is right in front of you. The importance of this entrepreneurship increases when you consider that, unlike other parts of the world, the population in places like Nigeria continues to grow rapidly. By 2050, Nigeria's population is expected to surpass that of the United States. This vibrant, growing country has many young people who have the potential to play a larger role in the global economy. In fact, it is projected that by 2050, 35% of the world's youth aged 18 to 25 will be concentrated on the African continent, making this region a massive source of labor in the future. In other words, Africa is both the future of the global economy and an incubator for new ideas.

Nigeria's Challenge: The 'You Win' Program Providing Direct Cash Grants to Entrepreneurs

Lariat Alhassan, who ran a paint business in Nigeria's capital, Abuja, was a typical 'one-person company' owner. She handled everything from manufacturing to sales and delivery alone, and without even having an office, she couldn't gain the trust of large clients and couldn't find a path to growth. Then, she heard an advertisement on the radio for a strange contest hosted by the government. It offered a huge cash prize to small business owners, and she initially suspected it was a scam.

This 'Youth Enterprise and Innovation Competition,' commonly known as 'You Win,' was the brainchild of Dr. Ngozi Okonjo-Iweala, who was the Minister of Finance at the time. While 8 million young people in Nigeria needed jobs, banks could not distinguish between good and bad micro-enterprises run by individuals, making loans extremely difficult. The doctor's solution was simple and clear: 'Since they need money anyway, let's just give them the money directly.'

The problem was how to decide who would receive the grants fairly. In a country with deep distrust of the government, it was necessary to dispel the suspicion that only those with specific connections would benefit. The method adopted was to have external government reviewers evaluate business plans submitted by applicants anonymously and then randomly select winners from those who met a certain standard. With the advice of World Bank researcher David McKenzie, this element of chance enabled a scientific evaluation of the program.

Lariat passed the first round of screening out of 24,000 applicants and became one of the 6,000 semi-finalists. She learned how to write a full-scale business plan at a training session held by the government, and after submitting a plan that included a budget and sales projections, she successfully became one of the winners. She received about $65,000 (approximately 10.64 million yen), which was more than 10 times her annual income. With those funds, she hired sales and marketing staff, opened the showroom she had dreamed of, and was finally able to welcome customers with confidence.

The true value of this program was revealed by a rigorous impact assessment conducted by the World Bank. Comparing winners and losers through random selection, the more than 1,200 winners created a total of 7,000 jobs, which were sustained for years. The total cost of the program was $60 million (approximately 9.8 billion yen), and the cost per job created was calculated at $8,500 (approximately 1.39 million yen).

The 'Universality of Entrepreneurship' Demonstrated by the Nigerian Program

Chris Blattman, an economist at Columbia University, vividly describes the shock he felt when he read the report. He said he couldn't believe the results were true and read the details over and over again. And, as a way to deal with the unexpected joy, he immediately wrote a blog post. Blattman evaluated the results as 'truly impressive,' which is why he titled his blog post, 'Is this the most effective development program in history?'

Blattman was particularly struck by the fact that many of the winners were one-person businesses that had received a large sum of money they had never seen in their lives, and despite being chosen somewhat randomly, they utilized the funds very well as a group. He had expected more people to fail. He thought entrepreneurship was rarer and required some special 'magical X-factor.' Certainly, applicants were screened through business plan contest evaluations and multiple stages. But even so, there was no special quality that only a few people possessed. These results suggested that entrepreneurship is far more universal than previously assumed and that this type of program could potentially be applied in many other places.

The Achievements of Entrepreneurial Support and Its Subsequent Expansion

This story was hosted by Alex Goldmark and Noelle King in 2016. The You Win contest ended after a change of government in Nigeria. However, the program was imitated in Kenya and Senegal, and Dr. Ngozi, who conceived the idea, now serves as the Director-General of the World Trade Organization (WTO). Lariat's paint business is still operating today, but she says she is still struggling to raise funds to grow even larger.

The Randomized Controlled Trial Revolution in Busia, Kenya, That Changed Development Economics

This show was hosted by Erika Beras and Alex Myasish. Busia is a small town located on the border of Kenya and Uganda, reached by traveling halfway across the African continent. Carol Naikesa, who grew up in this town, used to wonder why economists were asking villagers strange questions like 'How many goats do you have?' or 'How many TVs or bicycles do you have?' She says she never thought the world would care about calling Busia home. Busia is an international crossroads, with a constant flow of trucks carrying goods. When Carol was a child, they traveled on the back of bicycles called 'boda-bodas,' and she was scared every time a truck came by because of safety issues.

Carol studied computers in Nairobi, but her family wanted her back, and her father helped her get a computer-related job in Busia. This was because economists were conducting some research and needed someone to help with data entry. So, Carol sat at a desk and took a job entering answers for a strange survey. She later met the man who had devised these questions, Michael Kremer, a quiet, bespectacled American economist.

Mr. Kremer had experience as a high school teacher not far from Busia and later earned a PhD in economics. He specializes in development economics, a field that deals with all the factors that hinder growth in poor countries—from infrastructure shortages to public health issues. Even after earning his degree, Mr. Kremer's thoughts never strayed far from Kenya. He advised a friend who had a project to support children in Busia (paying school fees and providing funding for schools) and proposed an experimental method to measure the project's effectiveness. That initial attempt was too small in scale to draw conclusions, but the funding seemed to help a little. A few years later, his friend's non-profit organization was about to take on a larger project: distributing textbooks to students in 100 local schools. Mr. Kremer thought this was the perfect opportunity to test his experimental ideas in earnest.

This method was the Randomized Controlled Trial (RCT). It is a technique that has been the gold standard in medicine for decades, used in measuring the effectiveness of tuberculosis treatments in the 1940s and polio vaccines in the 1950s. This method of randomly dividing two statistically identical groups, intervening in one and not the other, was not yet common in economics in the early 1990s because it was expensive and time-consuming. Meanwhile, Mr. Kremer planned a large-scale, four-year experiment involving 100 schools in Busia. It was to measure the impact of free textbook distribution on student academic performance. The schools were randomly divided into groups. This was often done by listing the schools in alphabetical order and counting 1, 2, 3, 1, 2, 3. They wanted to ensure that these groups were all roughly the same—that is, that no group was an outlier in any way. One way to do this was by surveying the families. And this is when Carol Nyakisa was hired. All the questions she wondered about regarding goats, televisions, and bicycles were meant to check if any of the students' families were significantly wealthier than others.

Thus, the study began. In the first year, only one group of schools received textbooks. In the next year, the second group received them, and this continued until all groups had received textbooks. This process lasted for four years. And when Mr. Kremer got the results, a big surprise awaited him. He had expected that test scores would rise as each group received textbooks. However, there was absolutely no difference in the average scores. Even though all these children had received textbooks, there was no difference at all. Mr. Kremer was shocked at first, feeling it was not what he had expected. Then he was disappointed, because he had wanted this program to succeed and had thought it would.

Mr. Kremer reflected on what he knew about schools in rural Kenya. He knew that many children were falling behind for various reasons. Classes are taught in English, but most children do not speak English at home. There are public health issues like malaria and HIV that cause children to miss school. And children miss school to help with work or family. As he looked back at the data while thinking about these things, he noticed something that hadn't stood out initially. Textbooks were helpful for one specific group: the students who already had higher test scores. Their scores improved significantly. Ultimately, this study led to an important insight. Governments and aid organizations were spending millions of dollars on textbooks. However, much of that money was being wasted. And education reformers began to focus more on children who were not performing well, emphasizing remedial education.

For Mr. Kremer, and for Busia, the textbook study was a turning point. Mr. Kremer wanted to conduct more research like randomized controlled trials that could help solve real-world problems people face. Other economists began to take interest as well. Among them were Mr. Kremer's students. They helped as research assistants and then went on to develop their own projects. And very often, that meant working in Busia, because Busia was a good place to conduct research.

As all these economists started coming to Busia, Carol Nyakisa witnessed it from the front row. At first, there was one "Expert House" rented specifically for expatriates. Later, as the number of expatriates continued to grow, a second Expert House was rented. There were four or five people living in one house. Especially in the summer, the office became filled with so many white people. She says it reached a point where any white person in town was assumed to be associated with them. By 2010, the research being conducted in Busia had begun to reshape development economics. One of Mr. Kremer's students at Harvard, Ted Miguel, evaluated the effectiveness of providing deworming medication to schoolchildren for free, which many organizations had been providing for a fee. The results showed that children who received treatment were much more likely to attend school. Subsequent follow-up studies have shown that this led to better jobs and higher incomes later in life. Today, treatment is standard throughout Kenya.

And among the Kenyan staff who supported the research operations in Busia, some realized they could make a career out of this. Carol was one of them. She started by making suggestions to the researchers. She would read the proposals, think about them, and offer her opinions on what they could do. Having been involved in randomized controlled trials in Busia for years, it was natural for her. And when her suggestions were accepted, she felt like sharing more suggestions in the future. Carol told the economists that many girls were having sex with older men in exchange for money, which increased their risk of HIV infection. Economist Pascaline Dupas wondered if they knew the risks and if they could change this behavior. So, Dupas created a curriculum that taught girls that older men had higher HIV infection rates. The curriculum was provided to dozens of schools, and a randomized controlled trial was conducted to test the results. For Carol, that study was a major issue at the time, and in many ways, it was wonderful. She feels that, as a result, she could see in the data whether fewer girls were engaging in such dangerous behavior. Dupas's study suggested that in schools that received this education, fewer girls became pregnant and unprotected sex decreased. As a result, the curriculum was used more widely.

In 2014, about 20 years after participating in Mr. Kremer's textbook study, Carol Nyakisa left Busia to earn a master's degree at Harvard University. After graduating, she returned to Busia and established her own research organization, which serves as a one-stop shop for researchers who want to conduct RCTs in Kenya. She says she is proud that research conducted in Kenya, and in her own small hometown, is influencing development policy around the world.

The "Missing Middle" and "Human Capital" as discussed by economists

Professor Tavneet Suri, who teaches at MIT's Sloan School of Management and has roots in Kenya, explains the economic concepts that connect the two cases.

First, the problem the Nigerian You Win program tried to solve is called the "missing middle." In many African countries, there are only micro-enterprises run by individuals and large corporations employing hundreds of people, with a critical shortage of mid-sized companies employing about 5 to 20 people. One reason for this gap, in addition to the entrepreneur's own skills, is, needless to say, actual capital. Informal micro-enterprises lack the cash flow records that banks use to make lending decisions. Because there are no tax filings, ledgers, or electronic records, banks believe that they must visit businesses themselves to understand the reality in order to assess the risk of lending, and they consider that process to be extremely costly. The fact that You Win took the approach of bold cash grants, which was like winning a big lottery all at once, was a creative attempt to leap over this institutional gap.

Professor Suri points out that this discussion returns to the major theme of the value of "institutions" discussed in the previous summer school season. Before thinking about lending as a bank, it is necessary to first establish a system equipped with property rights, accountants, and a reliable legal system. This program was a very creative and slightly crazy attempt. If they had tried to design it as a normal loan, they would never have provided such an amount to micro-enterprises as an initial loan. This is because in a situation where the legal system does not function and there are no clear property rights regarding what is owned by whom, it is unclear whether the invested funds can be recovered. Land surveyors and title insurance companies might seem like the most boring things in the world, but they are actually the foundation of a successful economy. Clarifying who owns what is what matters.

And what Professor Suri positions as the root of economic growth is "human capital," that is, investment in education and health. The deworming study conducted in Busia was a prime example of creating a "positive externality" where improving children's health increases school attendance and raises education levels. One child receiving treatment and becoming healthy ultimately increases the productivity of those around them as well. This is consistent with recent research findings that a significant portion of the high growth in Southeast Asia can be explained by educational investment, centered on higher education.

Professor Suri also frankly speaks about the frustration that the results of such research are not necessarily reflected in policy immediately. Furthermore, she pointed out the importance of building relationships with the government and the reality that winning a Nobel Prize provides a certain boost in persuading policymakers. Finally, the professor mentioned the high voter turnout as a sign of a strong desire for civic participation and the vigorous entrepreneurial spirit where everyone tries to participate in economic activity as features of the Kenyan economy that she would like to bring back to the United States, saying that creating the mechanisms to support that is the mission of economists.

#Economy #Podcast #PlanetMoney #Nigeria #Kenya #RandomizedControlledTrial #RCT #DevelopmentEconomics #MissingMiddle #HumanCapital #NobelPrizeInEconomics #Entrepreneurship #YouWin #NgoziOkonjoIweala #MichaelKremer #WTO #MIT #WorldBank #HarvardUniversity #PovertyReduction #EducationInvestment #Finance #SummerSchool #Demographics #TextbookDistribution #Deworming #HIVPreventionEducation #PascalineDupas #TedMiguel #CarolNyakisa #TavneetSuri #RobertSmith #Busia #PositiveExternality #Institutions #PropertyRights