A new World Bank report, ‘Exploring Universal Basic Income’

A new World Bank report, ‘Exploring Universal Basic Income’

The World Bank has published a substantial report titled Exploring Universal Basic Income: A guide to navigating concepts, evidence, and practices

Universal basic income (UBI) is emerging as one of the most hotly debated issues in development and social protection policy. But what are the features of UBI? What is it meant to achieve? How do we know, and what don’t we know, about its performance? What does it take to implement it in practice? Drawing from global evidence, literature, and survey data, this volume provides a framework to elucidate issues and trade-offs in UBI with a view to help inform choices around its appropriateness and feasibility in different contexts. Specifically, the book examines how UBI differs from or complements other social assistance programs in terms of objectives, coverage, incidence, adequacy, incentives, effects on poverty and inequality, financing, political economy, and implementation. It also reviews past and current country experiences, surveys the full range of existing policy proposals, provides original results from micro–tax benefit simulations, and sets out a range of considerations around the analytics and practice of UBI.

The report can be downloaded free here.


Brief comment

The report employs throughout a definition of Universal Basic Income that matches BIEN’s definition of Basic Income. Consistency of definition is a commendable characteristic of the report as a whole.

The only caveat is that chapter 4 assumes that a UBI would replace existing social assistance provision. Under these circumstances it is not surprising that in some countries poverty and inequality would increase if the UBI were to be implemented. The authors do not simulate the option of leaving existing social assistance provision in place and reducing it by the extent of the UBI. In the context of a progressive tax system, such schemes would not increase poverty or inequality.

Apart from that, this is a most useful report.

The Latin American Basic Income Network

The Latin American Basic Income Network

It was late October 2019, when different academics and activists from all over Latin America were preparing to meet in the south of Chile to share our ideas and perspectives on UBI for the first time. The idea of forming a regional basic income network had been present for a long time and people were eager to contribute to it.

Suddenly, Chilean police and army went to the streets to suppress unarmed protestors. What started as high-school students protesting the rising metro fees became the a turning point in Chile’s history. The basic income event was sadly cancelled but the seed of something else was planted.

Fast forward to early March 2020, together with Gabriela Cabaña we decided to kick-start the network. Our first call was on Monday, March 9th, one day after the biggest protest turnout in Chile, on the eve when petrol prices went negative and right before the COVID-19 pandemic spread to most countries. We did not know what to expect next.

After the Corona virus hit, the interest on basic income surged tremendously in Latin America. In a matter of months, UBI in Latin America has gone from being almost no-where in the political radar to being the politics of the future, with events discussing the idea in countries like Argentina, Brasil, Colombia, Ecuador, Guatemala and Uruguay.

The Latin American Basic Income Network meets once a month. Since July and with the help of the Institute of Central American Fiscal Studies (ICEFI), the network has started to organize a series of talks in order to contextualize the importance of basic income in the region. You can watch the first one here, featuring Pablo Yanes (Mexico), Nelson Villarreal Durán (Uruguay) and Alejandra Zúñiga Fajuri (Chile), on the present importance of basic income.

Our goal is to produce a Latin American perspective on Basic Income, situating it in the socio-political context of the region on all it’s different dimensions, such as ecology, indigenous perspectives, welfare, democracy and so on. The next talk will be held on August 4th, 16h CDT, titled “Feminist Perspectives on Basic Income” which can be streamed live and viewed here.

Watch out for more news coming from the region! To get in touch, please contact us at: red-latinoamericana-de-renta-bsica@googlegroups.com

A European Basic Income pilot project would be good for Bulgaria

A European Basic Income pilot project would be good for Bulgaria

The EU Commission has said from the 25th September 2020 signatures can be collected from EU residents in connection with a new European Citizens Initiative. If the European UBI family succeeds in gathering 1 000 000 signatures, divided among a minimum of seven countries, then ECI delegates will be able to present a proposal to the European Commission which, if approved, would hopefully convince EU governments to start paying Basic Incomes to all of their citizens.

Bulgaria suffers from a number of problems, and in particular population loss and economically active citizens leave the country for better opportunities elsewhere. Angel Petrov writes:

The population decline carries long-term economic costs. Over time, a shrinking workforce becomes unattractive to investors and unable to subsidise the pension and healthcare needs of an ageing population.

Poverty and inequality are significant problems in Bulgaria. Bulgarian people currently receive the lowest income in the European Union while the cost of living is increasing. This is paradoxically occurring during 25 years of steady rise in productivity and mostly rising GDP. The Gini coefficient (2019) is 40.8 and rising.

The Corona crisis measures

All government ‘aid’ described below is highly bureaucratised and full of conditions, and in addition the funds are often paid late due to the complicated and sluggish administrative processes citizens are subjected to. The aid consists of:

  • Cash payments of €192 only for families with 14 year old children for the duration of the state of emergency (2 or 3 months)
  • over 2 months the unemployment fund will pay 60% of the income of the employees from sectors most heavily influenced by the COVID-19 crisis for up to three months. In addition to employers in sectors where operations have been suspended as a result of the social distancing measures (tourism, sports, culture, etc.), any other employer that can prove a 20% y/y drop in revenue in March is also eligible for the 60% salary subsidy.
  •  The measure has been extended until 30th of September 2020.

This is the main stimulus. However, the working population has doubts that the administrative process will be efficient enough (it is expected that most companies will receive the aid in October and November 2020). Furthermore, many small and medium businesses don’t have the means to pay 40% of the salaries. Some critics see this policy as supporting big companies which will absorb the unemployment caused by the lack of help for small and medium companies.

  • To date (1st August 2020) 129 million leva (64,5 million EUR) have been distributed to 8400 employers, that is 13% of the 1 billion leva (511 million EUR) allocated by the government. Close to 35% from these people have taken aid only for one month.
  • On the 10th of April the Bulgarian Central Bank enacted a moratorium on debt repayments. Overall the number of people who have debts in Bulgaria is almost 3 million. By the 10th of May, 102 000 have applied for temporary cancellation on payments (usually 6 months) towards their loans, and 80 300 have been approved. Changes in these numbers are expected.
  • The processes are not transparent, efficient and timely
  • The measures are conditional and selective and not universal
  • Most of the governments support is expressed in loans rather than direct payments

In conclusion the measures so far have the potential to create another wave of workforce immigration towards Western countries, weakening further the economic future of Bulgaria because:

The case for a UBI emergency pilot in Bulgaria

The unnecessary agony of the Bulgarian nature and people can be prevented, and UBI is a key step that can be collectively taken to compensate over three generations who have given their talents, energy and time towards creating shared wealth spreading beyond the country borders. It’s time for common dividends to be distributed to their rightful owners.

Bulgarian UBI advocates are working hard to unite the people around the idea that once social and economic stability is achieved through unconditional payments of around 1000lv (500 EUR) Bulgarians will have the time and capacity to build a new system that meets their needs and corresponds to a consensus based on democratic values. Due to the inflexibility of the national currency (it is tied to the euro), the dominant proposal on how to implement Basic Income in Bulgaria at the moment is by restructuring the tax system and national budget in a way that will pay the UBI bill with the collection of Value Added Taxes and Excise Taxes paid by the sellers. The idea is for every Bulgarian citizen with an active address registration to own a bank card issued by the Bulgarian Central Bank which will serve people as a payment method to be used to receive a Basic Income that would meet basic needs like rent, utility bills, food, clothes etc.

A UBI emergency pilot hosted in Bulgaria would not a utopia, and the EU could rescue its reputation by supporting it. It is an opportunity to trial universal basic income on a national level using the Bulgarian state financial infrastructure to distribute funds to the people.

The EU Commission would also have a vested interest in embracing the project, as the positive results would increase cohesion and trust, and would give hope to other states that the European experiment is not another way to practice concentration of power.

It’s time for evolution not only for Bulgaria but also for the EU. UBI is a win-win solution and will literally bring Bulgaria back to life. People outside long to return to their roots and work for the wellbeing of their parents and the next generations. The EU owes this to the people of Bulgaria and Bulgarians owe it to themselves, their ancestors, the children, and the European natural environment that happens to be surrounded by Bulgarian borders. We have too much to gain and nothing to lose.

———————————————————————————————————————

RESOURCES:

More details on COVID related government  aid.

Interview (Georgi Nedelchev, in Bulgarian) 

UBI Project Paper (in Bulgarian)

Videos:

Discussion on Universal Basic Income  (in Bulgarian)

Is UBI possible? Discussion (in Bulgarian)

UBI and Poverty (in Bulgarian)

A new overview report from the Stanford UBI Lab

A new overview report from the Stanford UBI Lab

The Basic Income Lab at the University of Stanford has published a useful overview report, What we know about Universal Basic Income: A cross-synthesis of reviews

This report is structured as follows. First, it provides an overview of the reviews. Then it synthesizes the basis of evidence (e.g., experiments, policies, and programs) that has been used to arrive at conclusions about UBI as well as the types of outcomes that have been of interest to researchers and the evidence that exists for these outcomes. The final section highlights gaps in the current state of the evidence and where future research is required.


Readers might wish to be aware of how definitions are used in this report. ‘UBI’ means ‘a cash transfer given to all members of a community on a recurrent basis regardless of income level and with no strings attached’; and ‘UBI-type’ means a cash benefit with some of the characteristics of a Basic Income, but not others. Particular care needs to be taken over the word ‘unconditional’. In this report, ‘unconditional’ can mean that receipt of the income is conditional on having a low income, but is not conditional in any other way.

Marie Claire publishes an article about a recipient of an experiment in Jackson, Mississippi

Marie Claire publishes an article about a recipient of an experiment in Jackson, Mississippi

Marie Claire has published an article by Katia Savchuk that describes the experience of one of the participants in an experiment that gave $1,000 a month for a year to twenty individuals selected by ballot.

… In November 2018, McDonald got a call from Aisha Nyandoro, head of Springboard to Opportunities, a local nonprofit where McDonald had taken a career-readiness class. Nyandoro said she’d picked McDonald’s name in a lottery to get $1,000 a month for a year, as part of an experiment called Magnolia Mother’s Trust that was giving no-strings-attached cash to 20 Black single mothers in Jackson’s low-income housing. When her first check arrived, McDonald had $1.01 in her bank account. …

Click here to read the article.