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A new era of international development aspires to increase the dignity and capabilities of those in poverty. Yet narratives accompanying aid often reinforce stigmatizing views of those in poverty as deficient in their circumstances or ability. We find that typical deficit-focused narratives risk undermining the very goals of aid—to empower recipients to pursue their goals and experience dignity rather than shame. In contrast, narratives crafted to counter stigma and leverage culturally-resonant forms of agency better enhance recipients’ beliefs in themselves and investment in their skills, without reducing donor support. As models of agency differ across sociocultural contexts, program designers need conceptual tools and methods for identifying effective narratives. We present “local forecasting” as a particularly efficient methodology for this need.