Piles of cash and a town of solutions in Kenya, Nigeria (Summer School)

What It Covers

Planet Money's Summer School examines two African economic experiments: Nigeria's You Win competition, which distributed $60 million in cash grants to small businesses via randomized selection, generating 7,000 jobs at $8,500 per job, and Kenya's Busia town, where randomized controlled trials reshaped global development economics and earned researchers a Nobel Prize.

Key Questions Answered

• •Cash grants over loans: Nigeria's You Win program gave selected entrepreneurs up to $65,000 in non-repayable grants — roughly 10 times annual income — rather than loans. The $60 million program created 7,000 durable jobs at $8,500 per job, a cost-per-job ratio that outperformed most conventional development interventions studied by World Bank researchers.
• •Randomized selection reduces bias: You Win addressed corruption risk by removing applicants' names from submissions, using judges outside Nigeria, and selecting many winners randomly after eliminating clearly weak plans. This design also enabled rigorous impact measurement, since randomly chosen winners formed a natural control group comparable to non-winners for statistical evaluation.
• •The "missing middle" business gap: African economies typically show many micro-businesses with one to two employees and large corporations, but few mid-sized firms with five to twenty employees. The barrier is not entrepreneurial spirit but capital access — banks cannot assess creditworthiness without electronic cash flow records, tax returns, or functioning property rights systems to secure loans against.
• •Randomized controlled trials in economics: Michael Kremer's textbook study in Busia, Kenya applied medicine's gold-standard RCT methodology to development economics in the early 1990s. Splitting 100 schools into randomized groups revealed textbooks only raised scores for already high-performing students, redirecting millions in aid spending toward remedial education — a finding replicable only through controlled experimental design.
• •Human capital compounds through positive externalities: Investments in health and education generate returns beyond the individual recipient. A deworming program in Busia increased school attendance and later raised adult incomes, demonstrating that health spending produces education gains simultaneously. Research on Southeast Asia's growth miracle attributes a significant portion of GDP growth to higher education investment, not primary schooling alone.