by Ian Orton | Nov 10, 2013 | Research
The Economist
The evidence that simply giving cash to the poor and vulnerable households is successful is well accepted by those familiar with the BI. Elsewhere, in more mainstream debate this recognition has lagged somewhat behind the empirical evidence, until now where a change seems to be afoot. A recent article in The Economist: “Cash to the poor: Pennies from heaven” charts both the origins of cash transfers (both in their unconditional and conditional forms), and most importantly gives its seal of approval that giving cash, when combined with wider measures, is an effective way forward for addressing inequality and poverty.
The article reaffirms the overwhelming evidence that giving cash improves key human development incomes (increased vaccinations and school attendance/attainment), spending money on improved living conditions, bolsters psychological well being (e.g. reduced levels of the stress hormone cortisone in the blood of recipients), depicts positively the capabilities of the poor by illustrating how transfers unlock and resource their economic potential, resulting in increased micro-economic activity and entrepreneurialism.
However, the article goes far beyond this, showing a nuanced understanding of the different outcomes generated by the incentives of soft and tough conditions (the latter credited with giving more significant results); the fact that pilot projects or one-off basic income-type transfers from Google or Facebook (as has occurred recently via ‘GiveDirectly’ in Kenya), might distort relations between recipient and non-recipient villages therefore skewing regional developmental goals. Moreover, from a Real Politick position the article also recognises the important strategic complementarity between conditions and cash and therefore political viability: conditions are the easiest way to assure political support by reassuring middle-class taxpayers that the poor are not violating the ‘norm of reciprocity’ through something-for-nothingism. And perhaps most importantly it lends weight to emerging concerns about the tendency of politicians and media to transform ‘shame’ and cash transfers into an ironclad collocation, especially in OECD countries, by dispelling this idea: ‘[UCTs] dent the stereotype of poor people as inherently feckless and ignorant’. In short, the article represents something of a popular breakthrough in legitimising cash transfers, whether they be unconditional or the ‘soft’ and ‘tough’ conditional variants.
The Economist, “Cash to the poor, Pennies from heaven: Giving money directly to poor people works surprisingly well. But it cannot deal with the deeper causes of poverty”, The Economist, October 26, 2013.
by Karl Widerquist | Oct 9, 2013 | Research
[Craig Axford]
GiveDirectly.org takes a different approach to charity by giving money directly to those in need, no strings attached. Emily DeCiccio of MSNBC reports that many people’s initial reaction to this type of giving is that people “will just drink away” the money they are given, but that kind of behaviour is rare. Typically those in need use the money on things they really need. According to GiveDirectly.org’s Jacob Goldstein, “there’s a very econ-101 idea going on here, which is each person knows what he or she needs.”
Emily DeCiccio, “Giving cash directly to the poor”
MSNBC, August 27, 2013-09-30
https://tv.msnbc.com/2013/08/27/giving-cash-directly-to-the-poor/
by Karl Widerquist | Aug 26, 2013 | Research
Discussion of BIG has gained strength in the United States recent with editorials in Slate, Bloomberg Businessweek, and it even got a mention from Paul Krugman. Although not by name, the discussion of BIG has now reached the New York Times Magazine. A column by Jacob Goldstein reports very positively on GiveDirectly and the Kenyan study on cash dividends, which essentially follows a BIG model.
See past BI News reports on these issues:
Karl Widerquist, “OPINION: Important study finds that giving money without conditions to the poor increases both employment and wages”
USBIG, “Google Gives $2.5 Million to a Direct Cash Transfer Charity”
BIEN, “New non-profit uses unconditional cash transfers”
If you would like to support GiveDirectly, go to: https://www.givedirectly.org/.
Jacob Goldstein, “Is It Nuts to Give to the Poor Without Strings Attached?” the New York Times, August 13, 2013
Illustration by Andrea Wan, the New York Times Magazine
by Karl Widerquist | Jul 4, 2013 | News
Business Press has been praising GiveDirectly, a direct cash transfer charity. The business press has been reporting very positively on a charity that transfers cash directly to Kenya’s poorest residents. In Kenya, cellphones work like debit cards and it is easy to infer who is poor and who is not by their address or other data. GiveDirectly uses that data and simply sends money to poor people in two low-income districts. Those without a phone can pick up cards and use them in other ways. It is important that charities are able to move with the times and can adapt to what is going on in the world so they can help out those who need it, that is why the use of shared workspaces like Ethical Property, as well as similar others, can be used for charities to come together and work on projects like this so they are able to support what they do in these countries.
Google Giving has donated two and a half million dollars to this charity. They cite the efficiency of it. There may be a few people who aren’t as needy as one would prefer and the phone companies do take some of the transfer but even then, it is more efficient than paying someone to assess every recipient. Also, cash aid creates market demand for food and other needs that could be met by entrepreneurs. Some recipients will use the money to start small businesses or pay school fees.
Intriguingly, the rationale for GiveDirectly that Facebook and Google figures have adopted, mirrors the rationale for a basic income and for projects like ReCivitas’ BIG QUATINGA VELHO and BIG Otjivero. ReCivitas has even less administrative costs than those faced by GiveDirectly. We have also discussed on this page BIG experiments in India. This could beat back the weird perception that a BIG is “impossible”.
For More info see:
Kerry Dolan, “Why Facebook Cofounder Chris Hughes And Google Are Giving Cash Directly To The Poorest,” Forbes, 5/28/2013
Jacqueline Fuller, “Want to Help People? Just Give Them Money,” Harvard Business Review, March 28, 2013
Matthew Yglesias’ article in Slate (see separate BI News report) gives a detailed account of GiveDirectly and its reception.
by Karl Widerquist | Jan 20, 2013 | News
A new Massachusetts-based non-profit, called GiveDirectly, transfers donations to poor Kenyans with no conditions attached whatsoever. According to GiveDirectly, their model of giving is based on a simple, four step process: “1. You donate through our webpage. 2. We locate poor households in Kenya. 3. We transfer your donation electronically to a recipient’s cell phone. 4. The recipient uses the transfer to pursue his or her own goals.” No conditions or restrictions are imposed on the recipient. The nonprofit was founded in 2008 by four people who were then graduate students at the Massachusetts Institute of Technology, Paul Niehaus, Michael Faye, Rohit Wanchoo, and Jeremy Shapiro. GiveDriectly went public in 2012, and it has recently received a grant to expand beyond Kenya.
According to a recent story in the Atlantic Monthly, initial results of the transfers appear extremely positive. Although the popular stereotype of the poor is that they will spend money they receive on vices such as alcohol and prostitution, “recipients are spending their payments mostly on food and home improvements that can vastly improve quality of life, such as installing a weatherproof tin roof. Some families have invested in profit-bearing businesses, such as chicken-rearing, agriculture, or the vending of clothes, shoes, or charcoal.”
Although the GiveDirectly website makes no mention of basic income, the organizers are inspired by, “a wealth of evidence on the positive impacts of cash transfers,” and their values are similar to those usually behind support of basic income. For example, their website compares their values to what they call “industry standard” values (i.e. values of most charities working in Africa; under the value of “respect,” the website reads, “Industry standard: Empower experts to decide what is best for the poor based on an assessment of needs or on personal ideology. Our standard: Empower the poor to set their own priorities.”
GiveDirectly’s website is online at:
https://www.givedirectly.org/
The two following news stories have additional info on GiveDirectly:
Goldstein, Dana, “Can 4 Economists Build the Most Economically Efficient Charity Ever?” the Atlantic Monthly, Dec 21 2012, 9:51 AM ET 4
https://www.theatlantic.com/business/archive/2012/12/can-4-economists-build-the-most-economically-efficient-charity-ever/266510/
Yglesias, Matthew, “Fighting Poverty By Giving Poor People Money” Slate Magazine, Dec. 25, 2012, writes, “I’ve come to think that directly transfering [sic] cash money to people in need is the most underrated tool around for fighting poverty.”
https://www.slate.com/blogs/moneybox/2012/12/25/give_directly_the_new_charity_that_fights_money_by_giving_poor_people_money.html
