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So... let's talk briefly about Direct Cash programs and Cash Benchmarking for a second. (
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Many of us already know direct cash handouts fare better than a bunch of other programs.
But how much better?
)Many of us already know direct cash handouts fare better than a bunch of other programs.
But how much better?
In a recent study that took place in Rwanda, USAID compared giving people money (directly), to a job training program.
The results?
Giving cash directly won... by a lot actually.
The results?
Giving cash directly won... by a lot actually.
Whereas the job training program had people knowing more about starting a business, that knowledge didn't show itself in business outcomes and hence overall wealth.
People did work and save more though.
People did work and save more though.
On the other hand, those who did receive cash did better on metrics of monthly income, subjective wellbeing, beneficiary consumption and household livestock wealth.
Another example in which giving cash directly was extremely beneficial was a study conducted in Kenya.
Due to the pandemic, we were clearly able to see how powerful a basic income is.
Due to the pandemic, we were clearly able to see how powerful a basic income is.
Giving people money directly helped them get something to eat. It meant people wouldn't go hungry. It meant they were resistant to external forces. It meant their businesses could survive in the midst of it all. All this was with a very small basic income.
So why is it so hard for people to understand this? Why is simply giving people money seen as radical when evidence proves it to be a better solution to poverty than many others?
For one, it would put a lot of contracts at risk. A bunch of for and non-profit organizations have contracts with USAID. These usually come with grants.
https://www.nytimes.com/2018/09/11/opinion/is-cash-better-for-poor-people-than-conventional-foreign-aid.html
https://www.nytimes.com/2018/09/11/opinion/is-cash-better-for-poor-people-than-conventional-foreign-aid.html
The other seems to be the that we "moralize" the pursuit of cash.
This reminds me of Forbes' video condemning a UBI. He claimed that a UBI would "break the link between effort and reward". The irony of this is how much of his own wealth is passively earned.
This reminds me of Forbes' video condemning a UBI. He claimed that a UBI would "break the link between effort and reward". The irony of this is how much of his own wealth is passively earned.
@scottsantens has a brilliant post on the issue.
I think I'll write a thread on the origins of the argument against cash relief soon enough (if someone hasn't done it by then). https://www.scottsantens.com/steve-forbes-universal-basic-income-ubi-video
I think I'll write a thread on the origins of the argument against cash relief soon enough (if someone hasn't done it by then). https://www.scottsantens.com/steve-forbes-universal-basic-income-ubi-video
At the end of the day however, we should be honest with ourselves. The faster we admit to ourselves the superiority of cash transfers the faster we could actually eliminate poverty.
If your proposal to help tackle poverty isn't better than just giving people money, you may be acting to the detriment of those you seek to help.
Cash benchmarking means that we can analyze how much progress we may have missed out on by pursuing programs that weren't cash based.
Cash benchmarking means that we can analyze how much progress we may have missed out on by pursuing programs that weren't cash based.
It means we can see which projects work and which don't.
But most importantly, it's starting to look like poverty really is just an absence of cash(*acts shocked*)
But most importantly, it's starting to look like poverty really is just an absence of cash(*acts shocked*)
If the wealthy person who one day wakes up feeling generous with the realization that they want to "end poverty" actively seeks to undermine the benefits of direct cash relief, they show nothing but their hypocrisy.
You can read a bit more on this with these resources. https://www.nytimes.com/2018/09/11/opinion/is-cash-better-for-poor-people-than-conventional-foreign-aid.html
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