by Kate McFarland | Aug 13, 2016 | Research
Bédia François Aka, a teacher at the Department of Economics at University of Bouaké, has written a journal article in which he investigates the implementation of a basic income in Côte d’Ivoire.
Abstract:
This paper tries to engage the economic and political debate around the proposition of a basic income grant (BIG) in Côte d’Ivoire. We simulate the economic wide and distributional impact of a universal basic income grant (BIG) in Cote d’Ivoire. How the BIG is financed is investigated. We use a microsimulated computable general equilibrium (CGE) model to analyze the effects of a universal basic income grant on the economy and on households. The model is performed using a Côte d’Ivoire’s 2003 social accounting matrix (SAM) based on the 1998 household survey composed of 4,200 households, and 2003 national accounts data. The paper uses a value added tax (VAT) financing approach to provide a reasonable feasible scenario, as we are all consumers. The results suggest that the macroeconomic impacts of the basic income grant are a powerful social protection tool in fighting poverty and inequality towards a welfare state.
The paper is available online as a free PDF file here.
Bedia François, “Quantitative Impacts Of Basic Income Grant On Income Distribution In Cote D’Ivoire: Time To Change Our Societies,” Revista Galega de Economía, Vol. 25-1 (2016).
Photo of women and girls of Côte d’Ivoire CC Krishna (2011)
by Kate McFarland | Aug 9, 2016 | Research
Johannes Haushofer and Jeremy Shapiro have published “The Short-Term Impact of Unconditional Cash Transfers to the Poor: Experimental Evidence from Kenya” in The Quarterly Journal of Economics. The article analyzes GiveDirectly‘s unconditional cash transfers to poor households in western Kenya, and examines their impact on consumption and psychological wellbeing.
Reporter Chris Weller summarized Haushofer and Shapiro’s findings in a column for Tech Insider.
Abstract of the original article:
We use a randomized controlled trial to study the response of poor households in rural Kenya to large, unconditional cash transfers from the NGO GiveDirectly. The transfers differ from other programs in that they are explicitly unconditional, large, and concentrated in time. We randomized at both the village and household levels; further, within the treatment group, we randomized recipient gender (wife vs. husband), transfer timing (lump-sum transfer vs. monthly installments), and transfer magnitude (USD 404 PPP vs. USD 1,525 PPP). We find a strong consumption response to transfers, with an increase in household monthly consumption from USD 158 PPP to USD 193 PPP nine months after the transfer began. Transfer recipients experience large increases in psychological wellbeing. We find no overall effect on levels of the stress hormone cortisol, although there are differences across some subgroups. Monthly transfers are more likely than lump-sum transfers to improve food security, while lump-sum transfers are more likely to be spent on durables, suggesting that households face savings and credit constraints. Together, these results suggest that unconditional cash transfers have significant impacts on economic outcomes and psychological wellbeing.
The article’s conclusion recaps some of the “significant impacts”:
We find that treatment households increased both consumption and savings (in the form of durable good purchases and investment in their self-employment activities). In particular, we observe increases in food expenditures and food security, but not spending on temptation goods. Households invest in livestock and durable assets (notably metal roofs), and we show that these investments lead to increases in revenue from agricultural and business activities, although we find no significant effect on profits at this short time horizon. We also observe no evidence of conflict resulting from the transfers; on the contrary, we report large increases in psychological wellbeing, and an increase in female empowerment with a large spillover effect on non-recipient households in treatment villages (p. 36).
Johannes Haushofer is a professor in the Department of Economics at Princeton University, as well as the founder and scientific director of the Busara Center for Behavioral Economics in Nairobi, Kenya. Jeremy Shapiro is the current president of the Busara Center; previously, he was a co-founder and director of GiveDirectly (from 2009-2012) and a consultant at McKinsey & Company.
The Quarterly Journal of Economics, edited at Harvard University’s Department of Economics, is the oldest professional journal of economics in the English language. It publishes articles in all areas of economics.
References
Johannes Haushofer and Jeremy Shapiro, “The Short-Term Impact of Unconditional Cash Transfers to the Poor: Experimental Evidence from Kenya,” The Quarterly Journal of Economics; published online July 19, 2016.
Chris Weller, “Here’s more evidence that giving people unconditional free money actually works,” Tech Insider; July 25, 2016.
Photo CC Ninara
by Kate McFarland | Jul 29, 2016 | Research
Vijay Joshi, Emeritus Professor of Economics at the University of Oxford, has recently published a new book, India’s Long Road: The Search for Prosperity, in which he argues in favor of a basic income for all citizens of India.
From the product description at Amazon.com:
Vijay Joshi argues that the foundations of rapid, durable and inclusive economic growth in India are distinctly shaky. He lays out a penetrating analysis of the country’s recent faltering performance, set against the backdrop of its political economy and charts the course it should follow to achieve widely shared prosperity.
Joshi argues that for India to realize its huge potential, the relation among the state, the market and the private sector must be comprehensively realigned. Deeper liberalization is very necessary but far from sufficient. The state needs to perform much more effectively many core tasks that belong squarely in its domain. His radical reform model includes a fiscally affordable scheme to provide a regular ‘basic income’ for all citizens that would speedily abolish extreme poverty.
Joshi’s research interests are in macroeconomics, international economics, and development economics. Outside of his appointment at Oxford, he has held various positions in government and business offices; for example, he has served as the Officer on Special Duty in India’s Ministry of Finance, the Director of J. P. Morgan’s Indian Investment Trust, an adviser to the Governor of the Reserve Bank of India, and a consultant to international organizations including the World Bank and the OECD.
Bibliographical entry:
Vijay Joshi, India’s Long Road: The Search for Prosperity, Oxford University Press, 2016.
Reviews focusing on Joshi’s support of basic income:
Ishan Bakshi, “Oxford’s Joshi proposes basic income for all,” Business Standard, July 19, 2016.
Jaimini Bhagwati, “Scrutinising India’s Economic Past Can Guide Us to a Brighter Future,” The Wire, July 20, 2016.
“Govt should wind up subsidies and provide basic income to everyone: Joshi,” WebIndia 123, July 15, 2016.
Photo credit: Chatham House (December 2012)
Thanks, as always, to my supporters on Patreon!
by Kate McFarland | Jul 16, 2016 | Research
Lithuania has received little attention in the global movement for universal basic income. In June of this year, however, Algimantas Laurinavičius and Antanas Laurinavičius, members of Faculty of Economics at Lithuania’s Vilnius University, published a brief investigation into the possibility of a UBI in Lithuania.
In general, the authors present a favorable view of basic income. In their conclusion, for example, they note, “Empirical research has proved that all the experimental basic income programmes decreased the level of poverty – the more generous the programme was, the stronger its effect was on the reduction of poverty” (p. 61).
This suggests that basic income could be a boon to Lithuania, which is “categorized as a country with high income inequality and high level of poverty risk.” Here, though, Laurinavičius and Laurinavičius are pessimistic — concluding that, at present, the Lithuania “state budget or social insurance fund budget are too small to pay-out sufficient benefits of basic income” (p. 62).
To read their full analysis (whether or not on the way to offer a second opinion on the Lithuanian situation), find the article below:
Algimantas Laurinavičius and Antanas Laurinavičius, “The Concept of Basic Income: Global Experience and Implementation Possibilities in Lithuania,” Business, Management, and Education, Vol. 14, No. 1; June 10, 2016.
Photo Lake Galve, Trakai, Lithuania CC Sek Keung Lo (flickr)
Thanks to my supporters on Patreon. (To see how you too can support my work for Basic Income News, click the link.)
by Kate McFarland | Jul 5, 2016 | Research
Dutch sociologist Dick Pels has published a new book, A Heart for Europe: The Case for Europatriotism, which is available for free download from Good Works Publishing Cooperative based in Bristol, UK.
The following is an introduction from the author:
European civilization is the never-ending quest for a more gentle, more relaxed, more trustful and less dangerous society: a society in which people are no longer afraid of each other, of their institutions, or of themselves. But Europe currently finds itself in the eye of a ‘perfect storm’, being chased by the multiple dangers of populist nationalism, Russian revanchism, neoliberal financial havoc, religious terrorism and refugee chaos. Facing these violent challenges, we urgently need to rethink our European ideals of peace, freedom, democracy, sustainability and the good life. It is urgent that we regain the original passion which lay behind the European project, in order to rescue the idea of a civilized European patriotism from the politics of fear which is conducted by both rightwing and leftwing nationalists.
Most of the book does not specifically address basic income; however, Pels does briefly make a case for a Europe-wide basic income in a chapter entitled “The European Good Life”.
While he does not foresee a basic income in the immediate future, Pels believes that Europeans might look forward to “something like an individualized European basic income, which would not only provide citizens with a guaranteed income but also relax the work ethic and relativize the political goal of full employment” (p. 102) — which he goes on to call a “eurodividend”.
Like the first legal state pension introduced in 1889 by Bismarck, who intended to outflank social democracy and to forge stronger ties between the newly united German states, such a ‘eurodividend’ could effectively bind citizens to the European project, while also removing economic imbalances within the eurozone and halting the social race to the bottom. It would lay a common European ‘social floor’ under the national welfare states, which would otherwise retain their diversity. As an individual share in the profits of European unification, the eurodividend would literally ‘make the profits of Europe visible for everyone’ (pp. 102-3).
Another major benefit of a “eurodividend”, according to Pels, is that it permits a more equitable distribution of time. Noting that a good life requires that “we win back command over our own time…from the economic production and consumption spheres,” Pels states, “A European basic income could be one way of distributing this time freedom more evenly and fairly. It would not only benefit the stressed-out multitaskers and burnt-out managers of the rich Northwest, but every EU citizen” (p. 104).
Read more about the book — or just download and read the book itself — at the publisher’s website.
Dick Pels has taught at various Dutch and English universities, and he was the director of the Bureau de Helling, the research foundation of the Dutch Green Party, until 2013. His previous English-language books include Property and Power, A Study in Intellectual Rivalry (1998), The Intellectual as Stranger (2000), and Unhastening Science (2003). He has also co-edited a volume on basic income, Het basisinkomen: sluitstuk van de verzorgingsstaat? (1995), with Robert van der Veen.
A guitarist and singer-songwriter, Pels writes and performs songs in the blues and folk-rock genres. He lives on the historic yacht Nymphaea.
by Sandro Gobetti | Jul 3, 2016 | Research
Article by Luca Santini and Sandro Gobetti (BIN Italia), published on Cadmus journal Vol. 2 Issue 6 may 2016.
Abstract
A feeling of uncertainty about the future as well as the perception that the past classical securities are gone are widely spread among people. Criticism or disaffection affects the majority of the traditional political forces of the European continent. It is not possible to talk about the European crisis without referring to the crisis of wage-based society. All political options of the past century have de facto put labour at the centre of society.
The post-classical era got its start in the ’80s when, for the first time since World War II, the phenomenon of mass unemployment affected Europe. The crisis of wage labour cannot be regarded as a temporary economic conjuncture of an otherwise unlimited growth; all consequences of the phase must be contemplated in order to design at once a society based on new principles.
For years, after the end of the Fordist system, nothing has been done to cope with the conditions of precarious workers. The issue of a guaranteed income is, therefore, crucial and inescapable in order to exit this long-term European crisis. The European Union should take a stand on the protection of human dignity and on the “right to exist”. Could basic income at the continental level be the basis for a social Europe? We are looking forward to it.
Click here to read the article in pdf.
Click here to download Cadmus Journal Vol. 2 issue 6 May 2016.
