The Freiburg Institute for Basic Income Studies (FRIBIS) is offering six positions for doctoral study.
The closing date is the 28th February.
FRIBIS is an interdisciplinary institute that aims to combine scientific research with political and civil debates as well as political consultation relating to the Universal Basic Income. FRIBIS supports a worldwide network of scientists, political decision-makers and societal actors who have the joint goal of providing answers to the global challenges of our time by means of a Universal Basic Income. Accordingly, all members of the Junior Scientific Group are expected to work through interdisciplinary cooperation. We are specifically looking for applicants from the following disciplines:
• Education • Social Anthropology • Computer Science • Psychology • Theology, especially Caritas Science and the Economics of Carework • Economics
We also encourage the application of people from related disciplines
Further details of the positions can be found here.
A silent division between the rural and the urban has been rapidly deepening in recent decades in our country. The recovery of the rural world as a space for full and dignified life has been postponed for too long. Since the times of the Agrarian Reform, there has not been a project in Chile to take the countryside out of its deterioration as the country’s “backyard” at the service of the export-oriented agro-industry, energy production and reception of waste from the city, a role to which it has unfortunately been relegated.
Non-urban areas offer the possibility of facing the great challenges of our time: those who inhabit them can take care of the biodiversity of their territories, defend them from damaging extractive projects and dedicate themselves seriously to developing projects of food sovereignty.
But all this is possible only with a minimum level of economic security. This key element would allow, for example, to break the dependence on agribusiness or industries as harmful as salmon farming in the southern coasts of our country. This model has disrupted populations that had had little previous access to money, entramping them in precarious and dangerous forms of work. A Universal Basic Income could be a first step to strengthen the position and possibilities of rural inhabitants to make other life projects a reality.
A practical way in which the implementation of a Universal Basic Income could recognize this historical debt and urgent transformation project would be by prioritizing provinces or regions with a high proportion of rurality for its roll-out. This would allow an early evaluation of the effects of this policy in revitalizing local economic circuits that in many cases are completely depressed, as well as encouraging a return to the countryside of people who perhaps cut off their relationship with their ancestral territories due to the need to have cash. but they still have the tools, the possibilities and the desire to make life outside the city something meaningful.
It would be an opportunity for the flourishing and recovery of activities such as eco and small-scale agrotourism, non-invasive grazing, or the cultivation of grains, fruits or vegetables that have been lost because they do not fit with the agro-exporting model, but that strengthen and enrich our bio-food heritage. It could also stop the urgency of deforestation by increasing the arable areas for commodities such as forest plantations in the south of the country. It could, in short, break with vicious circles that have undermined the social-ecological foundation of much of the Chilean territory due to the urgency of having income (often very low) on a day-to-day basis.
Having a resilient countryside is essential for a society that is entering the period of most important ecological transformations since the emergence of the modern human species. Challenges as important as increasing drought and desertification can be better faced if those who inhabit these territories in crisis have a guaranteed income.
In sum, leaving an urban-centric perspective makes the potential positive effects of having a UBI in Chile even more evident, and its implementation more urgent.
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.
This article briefly discusses the findings of my book A Critical Analysis of Basic Income Experiments for Researchers, Policymakers, and Citizens Published by Palgrave Macmillan 2018[1]
If the public debate over Universal Basic Income (UBI) is going to benefit from the many UBI experiments happening around the world, the journalists, policymakers, and citizens involved in the debate need to understand what UBI experiments can and—more importantly—what they cannot do. UBI experiments can increase our knowledge of some of UBI’s effects, but they cannot do what many journalists, citizens, and policymakers seem to expect them to. In December 2016, MIT Technology Review perfectly illustrated the common overblown expectations of UBI experiments when the ran the headline: “In 2017, We Will Find Out If a Basic Income Makes Sense.”[2] As much as we might want UBI experiments to be definitive tests of UBI’s efficacy, there is no some crucial piece of information that experiments can find and that will make the difference in most people’s decision whether to support or oppose the introduction of UBI.
Social science experiments are not like medical experiments. A vaccine trial, for example can directly address the bottom-line question of interest to just about everyone: is the vaccine is safe and effective? Researchers can conduct a random control trial (RCT) by selecting an “experimental group” of—say—1000 people who get the real vaccine and a “control group” of 1000 people who get a placebo. They observe both groups to see whether the experimental group is less likely to contract the disease and more likely to suffer medical complications. Vaccine trials are imperfect tests. RCTs might have difficulty determining whether the vaccine is truly safe and effective in the long run, among people of all ages, and for people with all possible complicating risk factors, but reporting differences between the control and experimental group in an RCT gives people useful and relatively straightforward information on the bottom-line question that interests them about vaccines. If comparison of the experimental and control groups indicates that a vaccine is both safe and effective, people should take it. If that comparison indicates it’s either unsafe or ineffective, people should not. If there is good reason to believe the test is inconclusive, researchers should conduct more tests.
We can give a UBI to an experimental group for a while and compare their behavior and life outcomes to a control group but that comparison is not a test of UBI in the sense that a vaccine trial is a test of the vaccine. If a UBI experiment is not a test, what is it? It is an indirectly and often inconclusive method of increasing our knowledge of some but not other aspects of UBI. UBI experiments cannot be decisive tests in the way vaccine trials are because they say much less about the long-term effects of a fully implemented, national UBI program than vaccine trials do about the long-term effects of a fully implemented, national vaccine program, and because to the extent RCT findings do say something about a national program, ethical disagreement affects how we evaluate those effects.
Unlike a vaccine, UBI has many effects that depend heavily on how people interact with each other in local and national markets and in nonmarket settings. The change in behavior of one randomly selected worker who receives UBI might be very different from the change in behavior of 100 million workers who all receive UBI. Employers’ reaction to the changes in behavior of one randomly selected worker with a UBI might be very different from their reaction to the changes in behavior of 100 million workers who all have UBI. The educational effects of experimental UBI on one randomly selected five-year-old child in a 3-year UBI might be very different from the educational effects on 5 million five-year-old children in a country that has a fully implemented UBI, which will be in place for their entire school career.
The things we want to know about UBI are far more complex and difficult to observe than the things we want to know about vaccines. How much will UBI raise beneficiaries’ incomes once they and other people they interact with their behavior in reaction to UBI and to each other’s reactions? How much will that increased income raise beneficiaries’ welfare—according to what measures of welfare? Will beneficiaries react to UBI in ways that make it more expensive or in ways that policymakers believe are desirable or undesirable? What is the relative ethical importance of each of these factors in evaluating UBI?
Ethical disagreement affects how we evaluate almost all of UBI’s effects. For example, if the experimental group works less than the control group is that a good thing because it empowers disadvantaged people to command better wages, to demand improved working conditions, to pursue more education, or to spend more time with their families? Or is it a bad thing because it allows them to violate some principle that non-wealthy people must work as much as possible? Empirical findings are vulnerable to spin and misuse if people use them not to help make up their minds but as ammunition to support their already considered beliefs on issues like these.
UBI experiments will produce better or more quantifiable information about some effects than others. This innocuous fact makes the experiments vulnerable to the streetlight effect—drawing attention to questions that are easier-to-answer but less important at the expense of questions that are harder-to-answer but more important. For example, RCTs might be able to say something about the short-term effects of UBI on economic insecurity, but that information does not answer the questions we really want to ask about economic security, such as whether new born children whose families will never face food or housing insecurity because of a national UBI tend to grow into heathier, better educated, happier, more productive, and more pro-social adults than children who grow up with food, housing, and other economic insecurities.
RCTs can answer the question of whether the control group works more hours than the experimental group, but they can’t answer whether employers will respond to a national UBI by offering better wages and working conditions and whether these workplace improvements will partially reverse the initial decline in labor hours. Like a bright light, UBI experiments will draw the attention of everyone—even the most rational, knowledgeable researchers—toward quantifiable numbers produced by the comparison between the control and experimental groups and away from the more important but hard-to-answer questions.
Partly because of the complexity of UBI’s effects and partly because of ethical disagreement, UBI does not lend itself to a simple, bottom-line question analogous to the question of whether vaccines are safe and effective. In the medical sense, UBI is both safe and effective. UBI will raise the incomes of net beneficiaries without holding them to any obligation to work or prove they are needy, and it will not make them break out in hives or develop any other medical complication. The central disagreement about UBI is not over the unknowns but over the ethical value of its well-known effects: is it right or wrong for a government policy to raise the incomes of low-income people whether or not they work? It is reasonable for people to have made up their minds one way or the other based on their answer to this ethical question.
Little if any empirical investigation addresses the question of whether UBI can significantly raise net-beneficiaries’ incomes whether or not they work, because there is overwhelming evidence and very little disagreement that it can; the disagreement is whether it should. Empirical investigation of the effects of UBI does little to settle that basic moral disagreement. We could ask the question, is a UBI of $X sustainable, but for most relevant levels of X, that question is in little doubt and the answer to it will only be decisive for the group of people who support a UBI of $X if it is sustainable. UBI opponents and skeptics are not by-and-large driven by the belief that proposed levels are unsustainable. If they were, the political debate would be made up of UBI supporters who disagree about how high it should be.
The above issues make it impossible for researchers to formulate a bottom-line question analogous to whether a vaccine is safe and effective or to give a definitive answer to any of the bottom-line questions of interest to people with different ethical positions. The ethical evaluation of the many tradeoffs involved and even the question of whether some effects should be considered positive or negative are in the eyes of the beholders.
That being the case, why do people conduct UBI experiments at all? People conduct UBI experiments partly for strategic political reasons and because even with all these difficulties, more knowledge is better than less. Not everyone has a strong opinion about UBI, and reasonable people who do have strong opinions remain open to changing their minds about it or about some aspect in light of new knowledge.
But information is not knowledge. More information only produces better knowledge if people understand it and its relevance. The researchers who conduct experiments do not have the ability to clear up all the potential misunderstandings discussed above. Researchers are trained to conduct experiments and report their findings to other specialists. To the extent that researchers present their findings to nonspecialists, it is usually to help them understand the research on its own terms—e.g. this is what an RCT is; this is a control group; this is an experimental group; these are the measured differences between the control and the experimental group. If laypeople’s eyes haven’t already glazed over, they almost certainly will when researchers add a bunch of caveats about the limited relevance of that comparison. As caveats get longer, journalists, policymakers, and citizens become more likely to skip to the numbers. A full understanding of the caveats is likely to leave people disappointed at how little experimental findings indicate about the actual market effects of a fully implemented, long-term, national UBI program.
Researchers could combine their experimental findings with evidence from other sources and use tools such as simulation models to translate differences between the control and experimental group into estimates of actual market outcomes. They could combine these results with yet more data and modeling to connect estimates of market outcomes to estimated answers to the various bottom-line questions relevant to people with differing ethical positions. But this would involve doing several more nonexperimental studies in addition to the UBI experiment. And their results would be driven more by the assumptions of those models and those other sources of evidence than by the actual findings of the experiment they are reporting on.
My recent book, A Critical Analysis of Basic Income Experiments for Researchers, Policymakers, and Citizens, examines the difficulty of conducting and reporting the results of UBI experiments in an effort to help researchers, policymakers, and citizens gain as much useful knowledge as they can from the information UBI experiments do provide.[3] This article is an attempt to summarize some of the most important arguments from that book.
The book discusses several general problems that virtually any UBI experiment will have to deal with: community effects, long-term effects, observer effects, the streetlight effect, the difficulty of separating the effects of the size and type of program being studied, the practical impossibility of testing a genuine UBI under most circumstances, and the problems created by using a means-tested program as an experimental approximation of UBI.[4]
Although the book does not take a position on whether people should or should not conduct UBI experiments, it discusses the scientific and strategic reasons for having or not having experiments and the record of past experiments in achieving their goals. Virtually all experiments have succeeded in gathering useful information. Not all have successfully led to a more-knowledgeable public debate over UBI. For example, experiments conducted in the 1970s were badly misunderstood, and their findings were often misused by people intentionally or unintentionally misleading the public.[5] From UBI supporters’ point of view, some experiments have been a strategic success in building the movement and others have not. Arguably, the 1970s experiments had a negative effect on the movement at the time but are having a positive effect on the movement today. Experiments conducted in Namibia and India about 10 years ago appear to have had a large positive effect in building the worldwide UBI movement. The effects of the more recent experiments remain to be seen.[6]
The book’s goal is not to criticize contemporary experiments but to offer some useful analysis for the people commissioning, designing, conducting, reporting on, and reading about them. To get the most out of an experiment, all of those people need to know what questions about UBI’s effects are important to the debate in the relevant political context, what questions about UBI’s effects are answered by the experiments, and most importantly what the experiments findings do and to not indicate about the important issues in the UBI debate. Researchers and journalists conducting and writing about current and future experiments need to understand how their finding have been misunderstood and misused to make their findings relevant to the contemporary debate.[7]
The book discusses the surprisingly complex political economy that has brought about UBI experiments as a response to a movement more interested in the immediate introduction of UBI than the experimentation with it. UBI experiments are a risky strategy for the UBI movement, but as long as UBI remains a political longshot, experiments present the possibility of shortening the odds.[8]
Anyone deciding to go forward with a UBI experiment should be aware of the inherent complexity of the material and the differences in background knowledge of the people involved. They should, therefore, also be aware that the results are vulnerable to misunderstanding and misuse, and they need to come up with strategies to increase understanding and decrease misuse as much as possible.
That’s a difficult task. The book can do no more than begin the attempt to come up with those strategies. The book recommends the following. Treat experiment(s) as a small part of the effort to answer the questions necessary to evaluate UBI as a policy proposal. It is not enough simply to explain the experiments on their own terms (what is an RCT; what is a control group; what is an experimental group, etc.) with a list of caveats on their limits. Experiments don’t have to be conducted in conjunction with other research efforts to answer all the questions about UBI, but experiments in isolation must not be presented as saying very much at all about UBI as a policy. The true value of an experiment is its small contribution to this larger effort. For nonspecialists to understand this, someone needs to help them understand the limits of experimental methods and the additional evidence that would be necessary to connect experiment findings to the things they actually want to know about a fully implemented UBI program.[9]
In addition to many more specific suggestions, the book stresses four broad strategies to help experiments enlighten the discussion of UBI.
Work backwards from the public discussion to the experiment and then forward again. Anyone commissioning, conducting, or writing about experiments should respect the national or regional discussion of UBI. Find out what people most want to know. Design a study oriented as much as possible toward the questions that are important to that discussion with careful attention to the extent to which experiments can and cannot contribute relevant evidence and the extent to which nonexperimental data and modeling can help.[10]
Focus on the effects rather than the side effects of UBI. The streetlight effect has led past experiments to focused on quantifiable side-effects, such as labor effort and cost at the expense of more important but less quantifiable issues, such as whether UBI has the positive effects on people’s long-term wellbeing supporters predict.[11]
Focus on the bottom line. Although the public discussion varies enormously over time and place, and not everyone agrees on any one bottom line, the desire for an answer to questions is ubiquitous. Therefore, experimental reports must address how people with different ethical positions can use the results toward making an overall evaluation of UBI as a long-term, national policy. Experiments alone cannot provide enough evidence to answer a bottom-line question, but researchers can relate all of their findings to it. Citizens and policymakers often need a great deal of help to understand that relationship meaningfully.[12]
Address the ethical controversy. Researchers cannot resolve the controversy over the ethical evaluation of UBI, nor should they try. But they do the public a disservice by ignoring it. They can better head off spin by recognizing the controversy and explaining what the findings mean to people who hold different ethical positions that are common locally and internationally.[13]
The overall cost-effectiveness of a fully implemented, national UBI is probably the closest thing to a bottom-line question relevant to people on all sides of the relevant ethical disagreements, but issue-specific bottom-line questions for any variable of interest are also relevant. [14] The book discusses claims made by supporters and opponents and tries to identify testable empirical questions about those claims. Several empirical claims that should not be ignored cannot be tested on an experimental scale. Evidence about these claims will have to come from other sources, which will have to be combined with experimental evidence to connect any experimental findings any relevant bottom-line question.[15]
Although experiments alone cannot conclusively answer any questions about a national UBI, the book identifies many claims that UBI experiments can examine if only partially, indirectly, and/or inconclusively. It discusses the implications these limitations have for conducting a study and communicating its results.[16] The book does not take a position on the question of whether UBI experiments should or should not be undertaken. That answer depends on the particularities of the local political context. The question is not whether to have an experiment. Experiments are happening right now all over the world. The question is how to learn the most from them.[17]
The book concludes with a discussion of how to work forward from the experimental results to the public discussion with the awareness of the role those claims play in the political economy of the UBI discussion so that they might be explained in ways that overcome communication barriers and reduce the problems associated with misunderstanding and misuse of experimental findings.[18]
I wish I could say this strategy fully resolves the problem, but that isn’t possible. A social science experiment is a very limited tool, and its implications are inherently difficult to understand. The effort to treat experiments as a small and incomplete part of a wider effort to answer all the important empirical issues about UBI will help but won’t eliminate misunderstanding.[19]
There will always be gaps in understanding between the people involved in the discussion of such a complex issue and such complex evidence. If a nonspecialist learns everything specialists know, they become a specialist. But experimentation and communication can always be improved. I hope this book, this summary article, and this special issue make a small contribution to that effort.
[1] This article summarizes and draws heavily on the book, A Critical Analysis of Basic Income Experiments for Researchers, Policymakers, and Citizens, Karl Widerquist, Palgrave Macmillan 2018. I summarized that book very differently in the article, “The Devil’s in the Caveats: A Brief Discussion of the Difficulties of Basic Income Experiments,” Karl Widerquist, CESifo Forum 19 (3), September 2018, 30-35.
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.
