USA: Cash transfers to victims of Hurricane Harvey: a useful experiment
GiveDirectly, a nonprofit organization currently most known for unconditional cash transfers in East Africa, has decided to distribute cash among Hurricane Harvey victims, starting with those afflicted in Rose City, Texas with a population of about 500 people considered for the project. However, depending on occupancy of the affected areas, the estimation is to cover at least 3000 people with the cash aid.
As with their other initiatives in Kenya, Uganda, and Rwanda, GiveDirectly is proposing to transfer money to hurricane victims in Texas as an unconditional payment. Unlike the projects in East Africa however, where the transfers were via payments to phones through methods like mobile banking, the transfer for Harvey victims is being delivered via prepaid debit cards containing US$1,500. This initiative also differs from the African experiments in the sense that it is not designed as a basic income pilot: beneficiaries are targeted by applying “a range of criteria to select locations: degree of damage sustained, income levels, access to other aid resources, and size”, as transmitted by Piali Mukhopadhyay from GiveDirectly. Moreover, Hurricane Harvey cash transfer will not be monitored via a control group, so there is no comparison between treated and non-treated groups. Clarifying the “unconditional” reference above, it applies only to the way beneficiaries spend the money, which is completely free from control / conditions.
Disaster victim assistance is changing, from an in-kind-based approach to cash-based programming. Cash transfers were used after the Pakistan floods in 2010, and useful lessons were learnt about cash distribution systems, and in 2016 the method was discussed in a United Nations report. GiveDirectly’s project is therefore part of a trend. Experience so far suggests that providing cash rather than services is an efficient way to provide disaster relief because it supports the local economy at the same time as providing the goods and services that disaster victims know that they need.
Whilst these experiments are not Basic Income pilot projects, the results are useful indicators of how different methods for distributing cash might work, and therefore of what the best methods for distributing Basic Incomes might be in different contexts; and the results might also inform a longer-term debate about how Basic Incomes might be preferable to longer term development aid.
More information at:
Ben Paynter, “This experiment will test if giving cash to victims is the best disaster relief”, Fast Company, November 7th 2017