In Canada, certain conditions apply to the unconditional and not everyone qualifies for universal benefits. [version française]
The Basic Income Earth Network (BIEN) defines a Basic Income as a periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement.
I do not think this idea will ever be fully implemented in Canada nor anywhere else in the world. This causes me little concern because UBI will forever exhibit the traces of its origins in the very imperfect social safety net we have today and have always had. Human institutions evolve from common ancestors: two very different policies are still linked by evolutionary history. A horse’s leg corresponds to the bones in our middle toe, not the same function at all, yet equivalent from an evolutionary point of view.
There are no social programs in Canada that are universal. Some condition always applies to reduce the amount and eventually eliminate the benefit completely. This is quite apart from any discussion of whether the program is sufficient, necessary, feasible or even appropriate.
When Canada implemented income tax in 1917 one of the features of this temporary program was the personal exemption: $1,500 for singles and $3,000 for others, $24,500 and $50,000, in today’s dollars. While this benefit was cash, it was hardly a transfer, since you just got to keep some of the money you already had. It was individual, a couple getting twice the benefit of an individual. It was unconditional in the sense that there were no strings attached, no work requirement, no declaration of any means (property or possessions) other than income. It was universal, except that the amount depended on revenue. The 4% of earnings on the first $1,500 dwindled to nothing if you had no income.
Fast forward 99 years to when the Canada Child Benefit (CCB) was introduced in 2016. Today we distinguish between reimbursable tax deductions and non-reimbursable tax deductions. The personal exemption is one of the later. Benefits only pay down your tax burden. You get no benefit if you pay no income tax. The Canada Child Benefit is one of the former and is a bona fide Basic Income, even if certain conditions apply.
The Canada Child Benefit (CCB)
The Canada Child Benefit is paid out even if no income tax is due. It is clearly a cash transfer.
Is the CCB universal? It’s paid to all families with children. Or is that all children with families? Of course you can’t send a monthly cheque to a toddler. The caregiver receives the money with no strings attached. When Universal Basic Income is distributed to all adults, its universality is never questioned in proposals such as BIEN’s or Andrew Yang. Is restricting the benefit to children less legitimate because they are dependants? In fact, children “without families,” that is “maintained by an agency” also receive the benefit. The amounts are identical; just the name of the program changes. I think that this settles the question: it is a benefit for children, not a benefit for families with children.
Is the CCB individual? If you consider that it’s paid to families, then no. If, however, as I argue, it benefits individual children and is just turned over to their caregivers, then yes.
Is the CCB unconditional? All social programs have some condition which excludes some recipients or reduces benefits. Universality and unconditionality are inextricably linked.
Both arise from a desire to allocate or distribute ostensibly scarce resources according to the opposing principles of fairness and efficiency. The issue is presented as a trade-off: Either the quantities are sufficient to fulfill the needs of the recipients and not everyone receives the benefit or everybody receives a diminished allocation and no one has enough.
The application of such conditions which eliminate recipients or slash benefits is what is referred to as means-testing. This exists in Canada. The welfare system is the classic example. Benefits are cut dollar for dollar if your earnings exceed a paltry threshold. For example, in Quebec, welfare provides $690 per month: 29.6% of what it takes to avoid poverty. Any earning above $200 is deducted 100% from your cheque. The welfare system intrudes into your private life: a couple receives 29% less than two individuals, so undeclared roommates are committing fraud, as far as the authorities are concerned.
Another way of distributing scarce resources is what is known in Canada as income testing. Benefits depend on how much revenue you declare on your income tax returns, which brings us back to the personal exemption of 1917.
You may not agree that this taxation feature qualifies as an embryonic social program and find it far-fetched to call it a cash transfer. Identity of form and function is not required to establish evolutionary kinship.
Means-Testing vs. Income-Testing
Means-testing and income-testing certainly have the same ancestor: the need for a fair and efficient distribution of putative scarce resources. In form they are virtually identical yet in the Canadian context, their function could not be more different.
Means-testing is a human activity whereby a bureaucrat gathers information on helpless and vulnerable people to determine how little they deserve. It is directed specifically at lower-earning people to make sure that they don’t receive more than they deserve. It is an evil system in which, if you are not destitute enough, requires that you divest of your property or savings regardless of your interests. Means-testing is a social policy tool reserved for those living in poverty and designed to punish them for their condition.
Income-testing is an algorithm which applies in the same way to everyone based on tax returns. The testing part of income-testing is achieved through tax self-reporting. Canadians don’t consider filing your income tax as an invasion of their private life. In any case, the government already knows how much tax you’ve paid because your employer turns over your tax deductions to the authorities every month and has been doing so since 1943. Revenue Canada doesn’t know or care what you do with your take-home pay nor tell you how to spend it. Unlike with means-testing, there is no stigma attached to phasing out benefits for the rich.
No one questions the practice of taxing back from the rich funds equivalent to the Canada Child Benefit from which they derive no important advantage and thereby recover some of the cost of a program which is immensely useful for everybody else. Conscientious objectors to means-testing will insist that even when this clawback is done specifically for the purpose of recouping UBI payments, it does not infringe on the principle of universality because it is done in separate operations, the right hand not knowing what the left hand is doing. In Canada, we tend to view this as an elaborate and unnecessary fiction. Covering up the mechanism does little to hide the process, which serves no other purpose than to claw back UBI from the rich.
In the FAQS page of BIEN, under the caption: “WHY PAY MONEY TO THE RICH WHEN THEY DON’T NEED IT?” we read:
“It is efficient to pay the same level of income to everybody of the same age and then tax it back from those who don’t need it. The alternative is to means-test incomes so that only those who are poor receive them: but that results in complexity, stigma, errors, fraud, and intrusive bureaucratic interference in people’s lives.”
First of all, “those who don’t need it” is a very unfortunate choice of words. There is no more reason to ask the rich than the poor to justify their needs, as means-testing does. Only the poor bear the brunt of the evils of means-testing. “Taxing back,” never questions your needs. That is all that “income-testing” is.
This distinction between means-testing and income testing is not hotly debated within BIEN: Most mainstream member philosophers and economists dismiss it out of hand, considering both concepts violations of the principles of universality and unconditionality. I can’t accept this argument because it is based on concepts which aren’t actually found in the real world. At least not in Canada!
UBI vs. NIT
Another thorny issue in the Basic Income community which may seem quibbling to the un-initiated is the distinction between Universal Basic Income and the Negative Income Tax. Every party to the debate agrees that in terms of net income in the pocket of the beneficiary, these measures are identical. Also, their net cost to the state is also the same. Finally, both programs can be engineered so that the beneficiary is unable to tell the difference. Doesn’t that make all discussion of their relative merits moot? Perhaps I am missing something. Let me quote Davide Tondani in full:
From the distributive point of view, the constraint of equal spending leads to distributive outcomes where NIT is effective at the bottom of the distribution, while UBI also distributes income to the middle incomes. This seems to suggest that in NIT, a minority of “poor” citizens are financed by people with middle and high pre-tax income. In UBI, a minority of wealthier citizens redistribute part of their income to people with lower incomes. Greater efficiency in fighting poverty by NIT and the presence of high marginal tax rates on low incomes reduces the labour supply formed by the same individuals. On the other hand, in UBI the lower benefits for poor people associated with lower marginal tax rate provide an incentive for low-income people to participate to the labour market. Preference for NIT seems to favour redistribution towards a wider range of low-income people. In the absence of a legal constraint to accept a job offered by the government, no personal effort in terms of a more intensive labour supply is required from these individuals. Opposite to this is a model of “residual welfare,” UBI on the other hand is less efficient in raising low incomes, but is more sensitive to inequality and social inclusion, and supporting labour supply and citizenship.—page 18
Tondani comments further on how identical outcomes can arise from divergent aims:
“Although NIT and UBI policies tend to lead to very similar, if not identical, distributive outcomes there is great epistemological difference between the two. Treating them as equal can thus lead to the risk of very real confusion about the real distributive aims of the policy maker.”—Tondani page 44
So there is no confusion about outcomes, only the aims of the policy-maker. I don’t see why motivation is relevant when outcomes are identical. If the road to hell is paved with good intentions, it might as well be paved with bad ones.
Shouldn’t good policy even backed by bad intentions be preferred over bad policy supported by good ones?
Scarcity vs. Policy
A final point about scarcity. The paucity of resources is often presented as a fact. It’s actually a policy decision, a choice of priorities.
A frequently heard argument is that if you give resources to those who don’t need them and provide free services for those who can afford to pay for them, you are depriving others who don’t have the resources and can’t afford the services. This argument only works if the resources and the services are scarce. This is not a question of objective fact. Scarcity is a question of political choice, the setting of priorities. For example, public housing could be more abundant if battleships and fighter jets were scarcer.
It is not often that rationing of a resource is unavoidable.
Conclusion
What social programs are, the intentions behind them, and their history is of little importance in comparison to what they do.
I have argued that the Canada Child Benefit is a Canadian-flavoured Basic Income which is as close as it gets to a UBI in the real world. It is universal because all humans go through childhood, it is individual because strictly based on headcount and it is unconditional because you don’t have to do anything special to deserve it, and you can do with it as you please, no questions asked. Furthermore, it is a regular, predictable, cash transfer paid monthly, for which you can sign up before you are even born. Does it deviate in some way from the ideal, orthodox form of Basic Income? Of course! Where do we find ideal forms in the real world?
Some will claim the Child Benefit is not important as a putative example of a UBI or will argue that the Child Benefit is not close enough to being a UBI to qualify as such. How close is close enough? What constitutes important? There is no objective way to decide these questions. The answers are not falsifiable.
Will calling the CCB a Basic Income hurt the brand and confuse people about what a Basic Income really is? The confusion has nothing to do with the shortcomings of the Canada Child Benifit as a Basic Income. Every example helps promote the concept, regardless of deviations from the ideal. And the more familiar the public is with Basic Income, the more likely it will spot the points to improve in existing implementations such as the CCB. It is the scarcity of concrete examples to point to that makes it difficult for people to establish connections. The more examples you find, the better people will understand. Far from confusing people, a consistent terminology with variegated examples will help crystallize the concept in peoples’ minds.
Basic Income is not something that can be summed up in a definition, it is a living thing, constantly adapting to a changing local environment. It is less man-made than responsive to conditions. Certain conditions apply.
By: Carlos Alvarado Mendoza y Jonathan Menkos Zeissig Translation: Julio Linares The Spanish version of the article can be found here.
Recently, the Central American Institute for Fiscal Studies (Icefi) proposed for Central America the implementation of a universal basic income (UBI), seeking that the States of the isthmus have a minimum guarantee of social protection, while contributing to counteract the impact of the Covid-19 pandemic. A UBI, accompanied by other public, social and economic investments, would accelerate the fulfillment of the 2030 Agenda for Sustainable Development and, by proposing a change structural in the welfare and economic growth model, could be the basis for the discussion of new social, political, economic and prosecutors in Central America.
Central American governments have implemented actions in order to contain the spread of the virus and reduce the impacts on people’s health and economic activity. However, these states have faced a complex scenario, although to varying degrees in each country, as the pandemic has exacerbated structural problems mainly related to the lack of equity in access and care of public health systems, the weak health care system and social protection and the low capacity to generate formal employment and productive transformation, which has as a consequence lead to high levels of inequality and poverty. Indeed, prior to the crisis, 45 out of every 100 Central Americans (about 22.5 million people) lives in conditions of poverty; furthermore, 82 out of every 100 poor Central Americans lives in Guatemala, El Salvador, and Honduras.
According to estimates by the Institute, the current crisis could cause the loss of up to 1.9 million jobs, and induce a significant increase in general and extreme poverty. Especially in Guatemala, El Salvador and Honduras, the current crisis could add at least 4.9 million people to poverty, according to data from the Economic Commission for Latin America and the Caribbean (ECLAC), which would further erode the weak social fabric of these countries of the region (Economic Commission for Latin America and the Caribbean (ECLAC), 2020, “Latin America and the Caribbean in the face of the COVID-19 pandemic: economic and social effects”, Special Report COVID-19 No. 3). Among the main measures that have been implemented by most Central American governments to limit the impact on the population, in terms of ensuring income, food security and basic services, particularly for vulnerable groups, are: food delivery; the creation of new monetary transfers; suspension of payment for basic services (particularly water, power and telephone); and, the increase in the amount of previously existing monetary transfers. Likewise, different types of protection programs have been put in place for workers in the formal sector, among which are teleworking, paid absence from work, unemployment insurance, reduction of working hours, among others. Additionally, additional direct support has been provided to individuals and families, consisting of credit payment facilities, support for workers in the informal sector, among others.
Although the measures adopted by the governments of the region are limited and of a temporary nature, they indicate the urgent need to implement permanent actions, from a long-term perspective, that make it possible to guarantee the gradual reduction of poverty in the countries of the region until they are eliminated and the rights of the people by strengthening States through the universal provision of social protection that allows rebuilding the social fabric of those countries.
Faced with the above, the Icefi has urged the Central American States expand and strengthen their social protection systems in a way that protect the population, prioritizing traditionally excluded groups and the most vulnerable, the economic and financial damages derived the crisis and accelerate the process of economic recovery. To achieve these objectives quickly and effectively, the Institute proposes the implementation launch of a universal basic income (UBI) that eliminates extreme poverty and significantly reduces general poverty. In its III Report Central American fiscal policy ―whose first chapters were published in July―, the Institute has calculated the costs and effects of the application of a universal basic income.
For the implementation of a UBI, the Icefi proposes to assign a sum monetary to each member of society, equivalent to the amount associated with the international threshold of extreme poverty (USD 1.90 per day in parity of 2011 purchasing power). From that account, you would also be paying the achievement of the 2030 Agenda of the Sustainable Development Goals (SDGs), in particular goals 1, 2, 3, 5, 8, 10, 12, and 16. The application of a UBI has an operational simplicity that pays to its rapid execution, avoiding creating more bureaucracy, opening paths to corruption and keeping beneficiaries in the trap of poverty. By being assigned unconditionally, it would allow not only to eradicate extreme poverty, decrease overall poverty, reduce inequality in income distribution, increase levels of economic activity and create the conditions for new jobs, but also the measure should provoke the modernization of fiscal policy and rebalancing necessary of responsibilities between citizens, companies and the government. From that account, when proposing a structural change in the welfare and economic growth model, UBI could be the basis for discussion of new social, political, economic and fiscal pacts in Central America.
The initial estimates made by the Institute suggest that the annual investment required for the implementation of a UBI ranges from 1.2% and 7.5% of GDP for the six countries of the region, Honduras being the country that would require more investment due to the size of its GDP and the number of inhabitants of the country. Similarly, Nicaragua would require an investment of approximately 5.8% of GDP; while in Guatemala and El Salvador, investment necessary would reach between 5.0% and 5.3% of GDP, respectively. In contrast, the countries that would face the least fiscal pressure to implement this policy are Costa Rica and Panama, whose investment would be around 2.2% and 1.2% of GDP, respectively.
Figure 1: Central America: necessary increase in public spending by the central administration to implement a UBI from threshold poverty level (2020-2030, figures as percentages of GDP).
At the Institute’s discretion, the implementation of a UBI could be carried out gradually, as shown in Figure 1 ―in a maximum period of ten years and serving the population in the territories with the highest poverty and less development, consistent with the achievement of the Sustainable Development Goals and with the necessary institutional, fiscal and economic restructuring that guarantees the effectiveness and sustainability of this policy over time. This way of gradually achieving the universality of basic income would allow States to advance comprehensively in the universalization of other public goods and services related to education, health, water and environmental sanitation, housing, among others.
According to estimates by the Institute, among the greatest impacts of executing this agenda, in addition to the elimination of extreme poverty, is the generation of 2.0 million direct jobs; the increase average of 20% in the rhythm of economic activity, mainly driven by domestic production; as well as improvements in the indicators of social welfare and equality. For the general fulfillment of the SDG2030 Agenda in the Central American region, the Institute has identified various probable sources of financing, among which the increase in tax collection stands out. As a result of the reduction of illicit capital flows, smuggling, evasion of taxes and fiscal privileges; as well as by the increase of some taxes that, additionally, could improve the global progressiveness of the tax system. In some states, indebtedness can also be considered as a financing mechanism. Additionally, the Institute reiterates that, on the side of public spending, it is possible to generate spaces additional prosecutors through two channels: by eliminating the items that are not oriented towards development goals, so that resources can be reallocated to programs that have such an orientation; as well as by improving efficiency of those that can generate better results in economic and social terms.
Table 1: Fiscal Space on the Taxation Side
The gradual implementation of a universal basic income, together with the advancement of public investments that guarantee the fulfillment of development goals, and a comprehensive fiscal reform ―more income, public spending based on results, greater transparency and an effective fight against corruption – are the elements that will allow Central Americans to successfully face this health and economic crisis, expanding rights and rebalancing social responsibilities. For this reason, the Institute urges all of society – peasant movements and promoters of individual human rights, workers, businessmen, academia, political parties and governments in office – to promote an open and sensible national dialogue, with a vision of the future, that has as objective of transforming States through a social, economic and fiscal pact that changes current political and socioeconomic trends and sets Central America on the path of sustainable, inclusive and democratic development to which the great majority aspire.
In particular, the states of the countries of the region must advance in the strengthening of their social protection programs, a central element of policy that allows reducing existing inequalities, not only in terms of income, but also from an inclusive perspective in economic terms and social that promote social cohesion. Furthermore, for Icefi, reducing the exacerbation of the poverty conditions in which more than half of Central Americans live may be possible by universalizing access to social protection programs, since the current context has only accentuated the existing limitations in terms of of the economic and social model. A better Central America is possible to the extent that an inclusive development model is formulated and built in economic, social and environmental terms, so that a universal basic income ensures a minimum base of protection that is accompanied by policies that guarantee for all a quality education; access to timely, effective and efficient health services; have public services of economic and social infrastructure that favor social cohesion; and that all implemented policies are consistent with an environmentally friendly strategy.
Mongolia is an East Asian country located between the two giant powers of the world: China in the South, and Russia in the north. As a classic example of a mineral-rich developing country, Mongolia has an export-driven economy in which 90% of the exports come from its minerals[1].
The country’s quick and vigorous action on preventing the spread of COVID-19 resulted in a notable success in fighting the pandemic so far. The country has relatively few cases with 310 confirmed cases and still no deaths in the middle of September 2020. But this success has come at a price.
According to the UN, in the first quarter of 2020, Mongolia’s economy contracted by 10.7 per cent, and government revenue fell by 8.6 per cent year on year, whilst expenditure went up 19.3 per cent[2]. On the other hand, the country struggles to boost its export-driven economy that is tightly tied to China. Asian Development Bank (ADB) estimates show that Mongolia will suffer significant investment and consumption shocks in addition to negative global demand spillovers in 2020. In addition to that, there is mounting international debt[3].
However, Mongolia is an interesting country that the world can learn some lessons from regarding the role of states in the ongoing health crisis of COVID-19. The country perhaps was the first developing country that introduced a resources-to-cash scheme[4], and with the COVID crisis this scheme is back on the agenda.
With the outbreak of COVID-19 during the winter of 2019-2020, Mongolian citizens were promised a cheque of up to 96,480 tugrugs (USD 34), but this promise was not a usual handout like in other countries. Mongolians who were born before April 11th 2014 are shareholders of a company called Erdenes Tavan Tolgoi (ETT) that manages a massive coal deposit on the state’s behalf; do these cash payments are dividends distributed by the company to its shareholders[5].
In 2019, the company made USD 1 billion and 30 million from its sales. For this reason, the dividend per share was calculated to be MNT 90, which results in MNT 96 thousand being given to each individual’s 1,072 shares. Minister D.Sumiyabazar said that the amount of the dividend will be raised further if the company’s revenue goes up[6].
As mentioned above, this resource-to-cash payment was not a new experience for Mongolians. In 2004, the government started to experiment with universal resource-financed payments for children. In 2010, the child-oriented payments were replaced with the new Human Development Fund (HDF) that was financed from mining dividends to provide a universal basic income that was paid monthly to every citizen. Mongolians monthly received MNT 21 thousand between 2010 and 2012 through the HDF. This experience provided a unique perspective on public ownership and revenue sharing in the mineral sector as citizens got a direct and equal share of their country’s wealth as co-owners of their country[7].
However, these payments were based on election promises and resulted in a vast deficit in the HDF as the expenditures were exceeding the actual mineral revenues[8]. In 2012, HDF was stopped and child-oriented payments were brought back.
On the other hand, in 2011, through a new scheme, every citizen received 1,072 shares in the ETT. Mongolians could use these shares for different purposes including tuition fees for students, health insurance coverage, or cash through a stock repurchase program by the government. Around 1.08 million Mongolians have kept all their shares and are entitled to a full dividend payout of MNT 96,480 (USD 34)[9].
Although these cash transfers have reduced poverty and inequality, and increased the transparency of the company’s actions and performance, the experience has taught the important lesson that it is not enough just to give cash payouts if the scheme is poorly designed and implemented[10]. As mentioned above, these cash payments have been used as tools to win elections, and this has resulted in an increased debt and an increase in inflation. In this regard, in 2019 the country passed an Election Law that prohibited the political parties from using the promise of cash transfers for elections.
Although the cash payments that were promised a few months ago are different from the previous cash transfers, as “The board (of ETT) has approved for the first time to distribute dividends to shareholders according to the Company Law. In the past, the state used its preferential rights to buy stakes from some people in cash. This time, it’s not a cash payout but a legal dividend distribution”, Minister D.Sumiyabazar said[11], we can still see something of the old tendency: a connection between elections and cash transfers.
On May 1, it was announced by the Minister of Mining and Heavy Industry that 100 thousand MNT was going to be distributed, but one month later there was still no payment. Erdenes Tavan Tolgoi company had already transferred 60 billion MNT to Mongolian Central Securities Depository but it is obvious that the government was holding it up due to the parliamentary election[12].
As we can see, the Mongolia experiment contains very important lessons in regard to the resource-to-cash payments. This experience underlines the importance of independent institutions from governments being tasked with the distribution of basic income type payments. If we understand these experiences and learn from them, it could provide a new perspective for governments in their fight with COVID-19.
Despite all kind of criticism regarding the government’s approach on resource-to-cash payments; people are losing their jobs, hopes, and voices all over the world, and this kind of resource-to-cash scheme gives a sense of certainty and security to people (without the burden of stigmatization), especially in such uncertain and volatile times.
COVID-19 doesn’t distinguish between rich or poor, and neither can we. More than ever we need schemes that don’t differentiate between people, because in these unprecedented times no-one knows if they will be the next one who is going to be affected by this crisis one way or another.
In the current turbulent times, there is a fierce debate emerging how cities should adjust to rapidly changing economic and technological trends. Smart City Education Inside invited two experts to discuss the prospect of cash transfers to enhance sustainability and provide equitable educational opportunities for students.
Smart City Online Education Inside is a joint project between the Digital Education Institute, III, and the Talent Circulation Alliance. Under the supervision of the Bureau of Industrial Development Taiwan, the project launched a series of panel and keynote speaking events for those interested in education technology, sustainable learning, and sustainable society.
On Tuesday (8/11), Mr. Ameya Pawar, who had served two terms on the Chicago City Council and was the first Asian and Indian American elected to major office in Illinois, shared his presentation “Dignity, Decency, and Agency: The Case for Universal Basic Income.” Income inequality, wealth inequality, and decades of policies favoring wealthy corporations and big banks over working people, drew him to the idea of Universal Basic Income (UBI).
Pawar believes that every aspect of society is impacted by inattention to poverty, it is necessary to invest in mitigating it at both the national and local level.
“What leads us to believe that people will do something wrong or bad or do less if we help them a little bit?” Pawar asked. “To achieve sustainability, people need to have built-in resilience,” he said.
In response to the idea that giving cash may make people less willing to work, Pawar said that research has shown that is not the case. “Giving people money does not change the fact that people, as human beings, want to be productive; instead, it gives people more choices and breathing room in their lives,” he said.
On Thursday (8/13), we invited Mr. Sean Kline, who is the Systems Entrepreneur in Residence with RSA Future of Work Center, to share his presentation “Child Focused Development in the Digital Era.”
Kline believes, as services and technology become the dominant drivers of the economy, some segments of the population have been left behind. That’s why, a more modern and robust social safety net is needed to help transition and adapt to this rapid technological change is needed. While the government is putting tremendous conditions on how low-income families use public benefits, it is capable of giving people money in the form of large tax deductions. These unequal requirements demonstrate trust for one group and mistrust for the other. In fact, unconditional cash is administratively easier to deliver especially if it is provided universally.
With children being an important focus of Kline’s work, he suggests that lacking investment in children not only shapes their life’s trajectory, but shapes the trajectory of potential economic growth for society as a whole. Sharing examples of universal children’s saving accounts, baby bonds, and basic income and how they have benefited children, he believes that these are the primary methods to support children universally in the digital age.
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 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.
