Can psychosocial interventions make anti-poverty programmes more cost-effective? Evidence from Niger


Published 16.02.23

A community-level film event and group-based life skills training can improve the cost-effectiveness of anti-poverty programmes

People living in extreme poverty face multiple kinds of deprivation. Lack of capital, limited skills, and distance to markets are often some of the first factors that come to mind. Recognising these intersecting barriers, the ‘graduation’ model was originally designed by the non-profit organisation BRAC to deliver several interventions at once: a stipend, a productive asset, livelihoods training, and savings groups. A coach also provides guidance to participants about livelihoods and offers some psychosocial support. This programme has been found to be robustly effective across settings (Banerjee et al. 2015, Bandiera et al. 2017), with sustained and even growing impacts over time (Banerjee et al. 2021).

The multi-dimensionality of extreme poverty includes psychosocial barriers

Too often, extreme poverty also comes with a wide range of psychological and social challenges (Ridley et al. 2020), stemming from factors like discrimination, social exclusion, and low levels of education. These constrain access to information and opportunities, leading people in poverty to have low agency over their fate, and little optimism about their future (Boehm et al. 2015). Perhaps unsurprisingly, they are almost twice as likely to experience depression as higher-income individuals (Lorant et al. 2003).

In other words, people in extreme poverty are less likely to have high aspirations, agency, and social support – psychosocial assets that influence not only well-being but also one’s economic potential (Ridley et al. 2020, Lund et al. 2011). While poverty can deflate aspirations (Dalton et al. 2015), intentionally boosting aspirations can spur future-oriented economic behaviour (Orkin et al. 2023). Social capital and support can also matter – having connections to higher-income individuals is a strong predictor of economic mobility (Chetty et al. 2022).

Addressing those psychosocial constraints through dedicated interventions may therefore enhance the impact of multi-dimensional programmes aiming to reduce extreme poverty.

The psychosocial interventions in Niger: Coupling life skills trainings with a community film event

In a large-scale field experiment carried out with the government of Niger, our interdisciplinary team tested the impacts of including psychosocial interventions in an economic inclusion package designed to help women beneficiaries of the national cash transfer programme develop and diversify income-generating activities (Bossuroy et al. 2022).

What were the psychosocial interventions? As we worked with practitioners to design the programme, we hypothesised that both individual women and their broader communities should be involved, particularly in a more interdependent or collectivist cultural context (Adams and Dzokoto 2003). Building women’s personal sense of efficacy and skills will only go so far in changing behaviour and economic outcomes if their immediate environment – their husbands, local leaders, and other people in their community – are not also supportive (Markus and Hamedani 2019).

So, the interventions included both a community-wide sensitisation event (Figure 1, Panel A), and a week-long life skills training for beneficiaries (Figure 1, Panel B).

Figure 1: Panel A - Community-wide sensitisation                 Panel B - Life Skills Training


The community-level sensitisation was designed to build social support for women beneficiaries to develop income-generating activities. It was based on a twenty-minute film shown on a big screen for the entire village (4-minute clip here). This ‘realistic fiction’ modelled the story of Amina, a woman overcoming economic and interpersonal challenges to start a new business (Bandura 2008). It was followed by a guided discussion facilitated by a social worker. The topics prompted the audience to relate the film to their experiences and values, as well as to set collective aspirations.

The group-based life skills training was tailored to the women beneficiaries, the majority of whom have zero education and were non-literate. It aimed to strengthen their aspirations for economic mobility, their self-worth, and key life skills such as goal-setting, leadership, problem-solving, decision-making, and communication (e.g. Chioda et al. 2021). The training occurred over seven half-days in classroom-like sessions and employed participatory, problem-centred, and personalised learning.

Both the community sensitisation and the skills trainings were designed to situate women’s entrepreneurship as being aligned, rather than in conflict, with local cultural values (Thomas and Markus 2023, Thomas et al. 2020).

The psychosocial interventions achieved strong impacts

We tested three variants of an economic inclusion package to document the impacts of including psychosocial interventions. All three treatment arms included a core economic package of group-based coaching, savings facilitation, market facilitation, and micro-entrepreneurship training. To that core package, one variant added psychosocial interventions (‘psychosocial arm’), one variant added instead a cash grant (the ‘capital arm’, which is closest to traditional ‘graduation’ packages), and the final variant included both components (‘full arm’). All treatment and control groups received small, regular cash transfers each month.

At endline, the psychosocial package showed an impact similar to the capital package on consumption (our main outcome of interest). Eighteen months after the end of the programme, the psychosocial package increased consumption by 11%, or US$ 405 (PPP-adjusted) per household per year, on par with the impact of the more traditional capital package.

Effects on household consumption were mostly driven by increases in the women beneficiaries’ off-farm business revenues for all packages, but the psychosocial package also increased the households’ agricultural revenues, as well as revenues from other household members’ activities.

All packages had positive impacts on psychosocial outcomes such as social support, mental health, self-efficacy, and social cohesion 18 months after the end of the intervention, in keeping with the fact that economic interventions often have psychological benefits (Romero et al. 2021). In addition, the psychosocial package played a particularly strong role in strengthening beneficiaries’ relationships with their community, and increasing the number of people they could turn to for help.

Another way to assess the value of psychosocial components is to look at the impact of adding them to a more traditional graduation package – for instance, by comparing the impacts of the full and capital packages in our experiment. Results show that adding the psychosocial components doubles the impact on consumption and increases the impact on household revenue by approximately 70%.

The high economic returns to inexpensive psychosocial interventions

How do psychosocial components affect the programme’s cost-effectiveness? The question is highly relevant for policymakers: while early graduation programmes have been found effective, they typically cost $1,500 per household or more (in PPP terms) (Banerjee et al. 2015), with a substantial part of the cost driven by the cash grant or assets. This high cost makes some governments hesitate to consider and scale these programmes.

The Niger programme was thus designed to be low-cost and scalable through the national safety net system. The psychosocial package, which did not include the cash grant, was particularly inexpensive, at $258 PPP per household, but even the full package was $579 PPP per household. Remarkably, as early as the 18-month mark, the packages with psychosocial components had impacts on household consumption that were already larger than the cost. Plus, their benefit-cost ratios were larger than the more traditional capital package. Assuming impacts diminish by 50% each year, benefits were 2.98 times larger than costs for the psychosocial package, compared to 2.08 times for the full package and 1.25 times for the capital package. These imply very high returns to investments, even compared to other graduation programmes in the literature.

Going forward: Designing interdisciplinary anti-poverty programs interventions for context

Until recently, the relevance of psychosocial factors to development policies has perhaps been underestimated. In cases where they have been considered, the implementation of psychosocial programs has often been expensive and intensive (e.g. weekly one-on-one coaching by a highly-skilled individual) or imprecise (e.g. ‘soft skills’ training without well-defined psychosocial targets).

While our research shows that psychosocial factors can be targeted in precise, low-cost, and impactful ways, researchers and practitioners will need to determine which psychosocial dimensions pose the greatest hindrance to economic mobility for specific populations and cultural contexts. This may vary between ultra-poor rural households, refugee populations, urban youths, or particularly stigmatised and marginalised populations. Careful interdisciplinary work is needed to assess how psychosocial and economic approaches may be combined to more effectively address the multi-dimensionality of extreme poverty.


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