by Kate McFarland | Dec 10, 2016 | News
The charity GiveDirectly, which is now preparing to launch a large-scale basic income experiment in Kenya, has been giving direct cash donations to poor individuals in Kenya and Uganda since 2009. Now donors and other interested parties will be better able to observe the effects of these cash transfers: in November 2016, GiveDirectly launched a new website, GDLive, which reports live and unedited updates from donation recipients.
As GiveDirectly explains in a blog post, “With GDLive, donors can see when (to the hour), how much, and to whom cash transfers were sent, and learn more about recipients’ lives. Respect also means a commitment to honesty: We aren’t cutting a single recipient’s answers and we’ll show everything they have to say about how GiveDirectly has impacted their lives: the good stories and the bad. We encourage recipients to be as honest as possible.”
To protect privacy, GDLive does not publish individuals’ last names or specific villages. The organization also gathers consent from recipients at multiple stages before publishing their testimonies.
In 2016, about 6500 households in Kenya received cash through GiveDirectly. As of October 19, GiveDirectly reports, about two-thirds consented to sharing their stories on GDLive.
Follow GDLive at live.givedirectly.org.
See also:
Michael Cooke (November 22, 2016) “Human stories are not the opposite of data” GD blog.
Reviewed by Genevieve Shanahan
Photo of GiveDirectly recipient, CC BY-NC-ND 2.0 PROcoolloud
by Hilde Latour | Nov 26, 2016 | News
In a recent IMPAKTER interview, as part of a series exploring the UN Sustainable Development Goals, Ian Bassin (Chief Operating Officer, Domestic, of GiveDirectly), explains how his organization is moving from unconditional cash transfers (UCTs) towards unconditional basic income (UBI) in Kenya.
GiveDirectly traditionally provides UCTs to the extremely poor, operating in Kenya and Uganda.
“We started our program in Kenya because they had a very robust mobile money payment system there, and that’s the means by which we transfer cash to poor households”, Bassin says.
The primary goal of GiveDirectly is to help demonstrate the effectiveness and efficiency of cash transfers. The research done so far shows that giving money to poor people works.
“Poverty in its simplest terms is a lack of money and resources. It is not a lack of capacity or ability”, Bassin notes. “If we’re not doing more with our dollar than the poor could do for themselves, we should probably just be giving them the dollar.”
Recipients of UCTs don’t spend the cash transfer on vice consumption, like alcohol or tobacco, nor does the transfer discourage people from working, Bassin explains. He refers to a recent World Bank Study that has shown UCTs are in fact more likely to reduce than to increase the consumption of vice goods.
“Our recipients use the funds incredibly wisely. […] They tend to spend it on positive goods and what we saw in our original RCT was that after the transfer had ended our recipients saw their incomes rise by thirty-four percent and saw their assets increase by fifty-eight percent.”
Bassin highlights that this research can “help drive cash as a benchmark for decision-making in the aid sector.”
From unconditional cash transfers towards unconditional basic income
GiveDirectly is now planning a major implementation and evaluation of a universal basic income, to launch shortly in Kenya. Instead of giving money to the poor only, a program by which everyone receives cash will be implemented and evaluated.
“A ‘guaranteed basic income’ or ‘basic income guarantee’ is the idea of providing a minimum floor for all members of a community. It’s enough to meet basic needs, so it would be enough to live on without work or other forms of income. It’s guaranteed over the long term so that you can make decisions about major life plans with a minimum level of basic security. And it’s universal in that everyone gets it.”
(…)
“We’re going to be providing whole communities with a regular basic income for 12 years. And we have three of the world’s leading researchers on board to rigorously evaluate it: J-PAL co-founder Abhijit Banerjee, former Chair of the Council of Economic Advisors Alan Krueger, and MIT professor Tavneet Suri. We’ve raised $22 million so far for the project and need to raise another $8m to run the full randomized controlled trial”
(…)
“Six thousand individuals in Kenya will receive a full basic income for twelve years and around 20,000 individuals will receive cash for a shorter period of time.”
Info and links
The full interview can be found here.
Related Basic Income News articles
US / KENYA: Charity GiveDirectly announces initial basic income pilot study
[Kate McFarland]
WORLD: The charity GiveDirectly will start a major basic income trial in Kenya
[Karl Widerquist]
Photo: Bus Ride Kenya-Uganda, 2015, CC 4.0 Jake Stimpson
Special thanks to Josh Martin and Genevieve Shanahan for reviewing this article
by Kate McFarland | Sep 25, 2016 | News
In a blog post dated September 22, the charity GiveDirectly announced that it will begin an initial pilot study of a basic income guarantee in a village in Kenya in late October.
According to GiveDirectly’s announcement, the pilot will “test the operational details of the model and also generate qualitative insights which we will then feed back into the ultimate quantitative evaluation.”
In the same post, the research team laid out some further details concerning its full study (the start date of which remains unspecified). In the full study, experiments will be conducted in two counties in rural Kenya — one in which GiveDirectly has acted previously (with few issues and near 100% participation rates), and one new county.
Villages in these counties will be divided into three treatment groups: one in which all adult residents receive a guaranteed basic income for 12 years, one in which all adult residents receive a guaranteed basic income for two years, and one in which all adult residents receive a lump sum equivalent to the two-year basic income. The amount of the basic income will be approximately $0.75 per day, which will be held fixed across villages in all three treatment groups. Data will also be collected on a control group of villages in which no cash transfers are given to residents.
In the blog post, the researchers mention a particular interest in the question of how a long-term income guarantee impacts risk-taking, such as in starting a business. They go on to add that, given the scale of the experiment, “we have reasonably good odds of detecting impacts not only on individuals, but also on village-level markets.”
GiveDirectly aims to include 40 villages in the first treatment group and 80 in each of the latter two. This would result in roughly 26,000 individuals receiving cash transfers.
There are some minor complications. For instance, according to a blog post published on September 5, lower-than-usual participation rates are being witnessed in some parts of Kenya — which the researchers attribute largely to misgivings and skepticism about the nature of the charitable organization:
We’ve found that people typically refuse out of skepticism. Potential recipients find it hard to believe that a new organization like GiveDirectly would give roughly a year’s salary in cash, unconditionally. As a result, many people have created their own narratives to explain the cash, including rumors that the money is associated with cults or devil worship.
However, the charity is working to improve its outreach to communities and stresses that, contrary to some press, relatively high rates of nonparticipation do not bespeak a “fatal problem” with the experiment.
GiveDirectly has raised over $11 million since April, when the organization announced its plan to fund a major study of basic income. It has also assembled a team of distinguished advisors, including Alan Krueger (former Chairman of President Obama’s Council of Economic Advisers) and MIT economists Abhijit Banerjee and Tavneet Suri (MIT). In July, an article about the work of GiveDirectly appeared in the prestigious Quarterly Journal of Economics.
Reference
GiveDirectly team (September 22, 2016) “New details on our basic income pilot”
Reviewed by Dawn Howard
Photo CC BY-NC 2.0 Evandro Sudré
Special thanks to Kate’s supporters on Patreon
by Kate McFarland | Aug 9, 2016 | Research
Johannes Haushofer and Jeremy Shapiro have published “The Short-Term Impact of Unconditional Cash Transfers to the Poor: Experimental Evidence from Kenya” in The Quarterly Journal of Economics. The article analyzes GiveDirectly‘s unconditional cash transfers to poor households in western Kenya, and examines their impact on consumption and psychological wellbeing.
Reporter Chris Weller summarized Haushofer and Shapiro’s findings in a column for Tech Insider.
Abstract of the original article:
We use a randomized controlled trial to study the response of poor households in rural Kenya to large, unconditional cash transfers from the NGO GiveDirectly. The transfers differ from other programs in that they are explicitly unconditional, large, and concentrated in time. We randomized at both the village and household levels; further, within the treatment group, we randomized recipient gender (wife vs. husband), transfer timing (lump-sum transfer vs. monthly installments), and transfer magnitude (USD 404 PPP vs. USD 1,525 PPP). We find a strong consumption response to transfers, with an increase in household monthly consumption from USD 158 PPP to USD 193 PPP nine months after the transfer began. Transfer recipients experience large increases in psychological wellbeing. We find no overall effect on levels of the stress hormone cortisol, although there are differences across some subgroups. Monthly transfers are more likely than lump-sum transfers to improve food security, while lump-sum transfers are more likely to be spent on durables, suggesting that households face savings and credit constraints. Together, these results suggest that unconditional cash transfers have significant impacts on economic outcomes and psychological wellbeing.
The article’s conclusion recaps some of the “significant impacts”:
We find that treatment households increased both consumption and savings (in the form of durable good purchases and investment in their self-employment activities). In particular, we observe increases in food expenditures and food security, but not spending on temptation goods. Households invest in livestock and durable assets (notably metal roofs), and we show that these investments lead to increases in revenue from agricultural and business activities, although we find no significant effect on profits at this short time horizon. We also observe no evidence of conflict resulting from the transfers; on the contrary, we report large increases in psychological wellbeing, and an increase in female empowerment with a large spillover effect on non-recipient households in treatment villages (p. 36).
Johannes Haushofer is a professor in the Department of Economics at Princeton University, as well as the founder and scientific director of the Busara Center for Behavioral Economics in Nairobi, Kenya. Jeremy Shapiro is the current president of the Busara Center; previously, he was a co-founder and director of GiveDirectly (from 2009-2012) and a consultant at McKinsey & Company.
The Quarterly Journal of Economics, edited at Harvard University’s Department of Economics, is the oldest professional journal of economics in the English language. It publishes articles in all areas of economics.
References
Johannes Haushofer and Jeremy Shapiro, “The Short-Term Impact of Unconditional Cash Transfers to the Poor: Experimental Evidence from Kenya,” The Quarterly Journal of Economics; published online July 19, 2016.
Chris Weller, “Here’s more evidence that giving people unconditional free money actually works,” Tech Insider; July 25, 2016.
Photo CC Ninara
by Kate McFarland | Jul 11, 2016 | News
On Tuesday, July 5, Alan Krueger — the former Chair of President Obama’s Council of Economic Advisers — announced in a Tweet that he would be joining the research team at GiveDirectly, assisting the charity organization as it designs and implements a long-term, large-scale basic income pilot in Kenya.
GiveDirectly reported this announcement in its blog on July 7.
An interesting coincidence is that GiveDirectly’s announcement of Krueger’s involvement came on the same day that Jason Furman, Krueger’s successor as adviser to the President, spoke against universal basic income at a workshop on automation co-sponsored by the White House.
Krueger is currently Bendheim Professor of Economics and Public Affairs at Princeton University, where he researches such topics as subjective well-being and trends in contingent and freelance work.
Photo of Alan Krueger CC Ralph Alswang, Photographer.
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