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International: World Bank releases draft report supporting basic income

World Bank building. Picture credit to Financial Express.


The World Bank has released a draft report, published on the 20th of April, titled “The changing nature of work”, in which basic income is suggested as policy to “be read through the lens of ‘progressive universalism’”. This progress to a universal system should depend, according to World Bank analysts, on “basic social insurance” and also on a reliance on “flexible labour markets”, in a relationship that would not do without, though, targeting social assistance schemes.


The reason for maintaining conditional social assistance is, in this context, to “prioritize those at the bottom of the [income] distribution”. This maybe contrary to the (universal) basic income principle, but World Bank analysts consider important to identify those “who are the most vulnerable, where they live, and how vulnerable they are”. To address rising inequality and profound changes in the nature of work in the next few decades, basic income-like schemes are seen in this report as having “pros and cons”, which “may address challenges in coverage and take-up programs”. The advantages referred relate to more coverage and reduced stigmatization, but at the same time warnings are made to new possible challenges in administrative ruling and financing.


The report underlines the need to relax strict work regulations, stating that “stronger social protection systems can go hand in hand with more flexible labour markets”. A particular concern for labour costs to firms is expressed, especially when compared to technology. The World Bank’s view is that labour costs should generally go down (including unemployment benefits and minimum wages), associated with a “reformed social assistance and insurance systems”.


On the other hand, basic income – in the report often stated as “guaranteed minimum” – “may also ameliorate possible work disincentives”. That is clearly connected with the usually known as “poverty traps”, where people choose to remain eligible for social assistance, rather than risk going into formal employment and end up with less money (due to taxation). It is also linked to reduced administrative costs. Moreover, the report recognizes the importance of maintaining typical welfare services, like public health and education, and be careful in scrapping existing benefits, as some are not as prone to be immediately replaced by a basic income.


From a definition standpoint, World Bank analysts defend that basic income “is a process that serves the poor first, it recognizes that wider coverage is desirable (…) and allows countries to claw back benefits from the rich.” However, in their view, the progressive system envisioned should be a three-legged stool, as mentioned above: basic income, to cover “against catastrophic losses”, mandated social insurance, to “achieve an adequate level of savings”, and market-based voluntary savings, to complement the previous two.


Historically, the report recognizes, conditional benefits have gone a long way in achieving social security in many regions, both high and low income. That, combined with generally low uptake rates (60% in high-income countries and 20% of the poorest households in low-income countries), shows that there is room for improvement, although it remains unclear how conditional and unconditional social assistance should play out together, given this context, in the near future. Also, for financial reasons, the report advises low income countries to increase coverage (estimates put the elimination of poverty on a double-digit spending percentage relative to GDP, for those countries) of existing programs and enhance delivery platforms, instead of opting right now for a basic income. As far as financing is concerned, a particular emphasis is put on taxing “superstar corporations”, limiting their ability to escape taxation through loop-holes and tax havens, plus levelling the tax grounds between them (e.g.: Google, Facebook and others, which are usually less burdened with taxes than most other companies) and other companies. Eliminating energy subsidies, introducing or expanding carbon taxes and imposing inheritance or estate taxes are also possible routes for funding the “new social contract”, as envisioned by World Bank analysts.


More information at:

World Development Report 2019 Overview, “World Development Report 2019: The Changing Nature of Work”, The World Bank, 20th April 2018

About Andre Coelho

André Coelho has written 280 articles.

Activist. Engineer. Musician. For the more beautiful world our hearts know it's possible.

The views expressed in this Op-Ed piece are solely those of the author and do not necessarily represent the view of Basic Income News or BIEN. BIEN and Basic Income News do not endorse any particular policy, but Basic Income News welcomes discussion from all points of view in its Op-Ed section.

One comment

  • Stephen Stillwell

    Including each adult human on the planet equally in money creation provides a consistent global basic income.

    Simply accomplished by allowing each to claim a quantum of secure capital for deposit in trust with their local deposit bank by signing a local social contract. This secure capital is a limited right to loan an amount of money into existence to finance secure sovereign investment, administered by local fiduciaries.

    A right doesn’t cost anything, so the only cost involved is the banking, and drafting the social contracts, which should be done anyway.

    Perhaps due to the complex nature of the process, the inequity of current money creation isn’t recognized as the foundational flaw in our Shared global economic system. Though the effects of distributing the economic security provided by State only to those with existing Wealth should be apparent.

    The interest paid to service global sovereign debt is the largest stream of income and represents the economic security provided by State. This money is primarily paid to Wealth, securing their fortunes while they need only invest the interest. Interest paid primarily by each.

    Money creation no longer relies on the value of gold to guarantee the value, though that was the rationale for charging interest. The cooperation and acceptance of each guarantees the value now, we have replaced the gold, we own ourselves, the interest is ours.

    Correcting this inequity, and establishing each human structurally as an equal financier of our Shared global economic system provides a global basic income for no additional cost beyond the fixed sustainable interest paid to create money.

    The flexible structure created will create a global BI of ~20 USD equivalent/month, without changing any taxation or social programs, because the interest on sovereign debt is being paid. If an individual Share is valued at 1 million, and the sovereign rate is 1.25%, each nation could borrow the value of all Shares available to fill their treasuries and pay 1 thousand/capita/month that will go directly to each… same as suggested BI schemes, but this way each nation also has a treasury full of money.

    Or just allow increased borrowing to increase the global BI as the economy expands. Or any variation within the limits established.

    Simple dismissal of the correction without argument against is an academic failure.

    Dismissal based on a desire to promote single state welfare distribution schemes with no path to global inclusion ignores the demand of UBI for all.

    If you can get any of the gatekeepers to actually address a simple rule of inclusion it will best my attempts of a dozen years or so.

    Thanks so much for your kind indulgence

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