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Research Finds Outright Grants of Cash are an Effective Form of Aid to the Poor

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Re: Research Finds Outright Grants of Cash are an Effective Form of Aid to the Poor

#61

Post by tsotha »

aspensmonster wrote: post #46
jlgreco wrote: post #39

Earlier quoted context omitted.

That seems like a reasonable definition of "extremely rare". Platinum is extremely rare, several hundred tons of it are mined every year. (A number that sounds incredibly heavy, but pales in comparison to the numbers of common metals.) Half a percentage is "extremely rare" compared to numbers like 50%. Most people in America have absolutely no experience with the sort of poverty that is nearly inescapable in many und…

Well, I can see it didn't take long at all for the Oppression Olympics to get underway. Edit: -1? Impress me.

Predictable as the sunrise in these kinds of posts.

Re: Research Finds Outright Grants of Cash are an Effective Form of Aid to the Poor

#62

Post by yaix »

The only way countries have /ever/ developed is by the production of value, products that a market wants to buy, usually an export market. Handing out free money doesn't help to achieve that goal. It just perpetualtes dependence.

It seems to be the "new hip thing" within the aid-industrial complex, though. I hope it will not do too much damage to these societies, like many of the previous "effective forms of aid" did.

Re: Research Finds Outright Grants of Cash are an Effective Form of Aid to the Poor

#63

Post by twotwotwo »

jcroll wrote: post #52
justinpombrio wrote: post #50

Earlier quoted context omitted.

Presumably because $20 goes further in Kenya than in wealthier countries.

My only point is that to me, giving cash to Kenyans and giving cash to beggars seems morally equivalent. Not saying you shouldn't do either but I do think if you give Kenyans cash but have qualms with giving beggars money, well I don't think that makes much sense.

If giving $20 to a Kenyan does more good, and you think the most moral thing is to direct your efforts where they do the most good, then there's how they're not morally equivalent.

Re: Research Finds Outright Grants of Cash are an Effective Form of Aid to the Poor

#64

Post by tedsanders »

yaix wrote: post #62

The only way countries have /ever/ developed is by the production of value, products that a market wants to buy, usually an export market. Handing out free money doesn't help to achieve that goal. It just perpetualtes dependence. It seems to be the "new hip thing" within the aid-industrial complex, though. I hope it will not do too much damage to these societies, like many of the previous "effective forms of aid" did…

I think the argument is that initial capital can jumpstart that production of value. If you spend 10 hours a week maintaining your straw roof, and then someone buys you a metal roof, you can now spend those 10 hours a week on an exportable trade/product.

Re: Research Finds Outright Grants of Cash are an Effective Form of Aid to the Poor

#65

Post by twotwotwo »

cjbprime wrote: post #30
hristov wrote: post #27

The problem with cash grants is something that does not show up when there is a Columbia professor watching things. And that is that the money gets stolen. Many poor countries suffer from corrupt callous and cruel leadership. And this means that the people in power tend to steal from the poor. Thus, if some organization tries to give cash to the poor there is a high likelihood that the money will be stolen and sent t…

I don't think this has been a significant problem for Give Directly, which sends money to people directly via the M-PESA cell phone network, in reasonably small amounts at a time, and with unpredictable timing. There's no easy access point for a corrupt official to swoop in and become involved.

Right. That's important to make this program work, and it's an unusual set of circumstances. Not many places have both extremely poor people and a high-quality mobile payment network!

Bad stuff can still happen: people could potentially be swindled or harassed out of their cash once they get it. But at least getting it there is a huge step.

Also, perhaps one thing you can take from this is that a full-featured mobile payment network needn't be thought of just as conveniences for the first world. It also makes stuff like this possible.

Re: Research Finds Outright Grants of Cash are an Effective Form of Aid to the Poor

#66

Post by yaix »

nostromo wrote: post #31
hristov wrote: post #27

The problem with cash grants is something that does not show up when there is a Columbia professor watching things. And that is that the money gets stolen. Many poor countries suffer from corrupt callous and cruel leadership. And this means that the people in power tend to steal from the poor. Thus, if some organization tries to give cash to the poor there is a high likelihood that the money will be stolen and sent t…

Don't you have it exactly backwards? I've heard (from people like Andrew Mwenda) that say that Western aid to African governments ends up not helping the citizenry and just props up bad governments. Aid that completely bypasses corrupt governments and goes directly to citizens seems to be less likely to be stolen by middlemen. If you look at Give Directly ( http://www.givedirectly.org/faqs.php ) they send cash direct…

My guess is that companies will offer to "write nice proposals" for groups of poor people to get free money and then charge 30% as a fee from them.

Re: Research Finds Outright Grants of Cash are an Effective Form of Aid to the Poor

#67

Post by yaix »

tedsanders wrote: post #64
yaix wrote: post #62

The only way countries have /ever/ developed is by the production of value, products that a market wants to buy, usually an export market. Handing out free money doesn't help to achieve that goal. It just perpetualtes dependence. It seems to be the "new hip thing" within the aid-industrial complex, though. I hope it will not do too much damage to these societies, like many of the previous "effective forms of aid" did…

I think the argument is that initial capital can jumpstart that production of value. If you spend 10 hours a week maintaining your straw roof, and then someone buys you a metal roof, you can now spend those 10 hours a week on an exportable trade/product.

I know that argument, but it is incorrect.

Production needs to be efficient in order to compete. Efficiency needs knowledge. These "groups of poor" lack that knowledge. And the amount of free money is way to low to produce anything with enough surplus value. How many unskilled carpenters, metal workers, and hair stylists do they need? I am currently in Kenya, and the amount of barber shops is amazing.

Production of value is stuff that a country can export, to earn hard currency that can buy knowledge to increase the country's production efficiency. Like Taiwan did, and Korea, and Malaysia, and China, and any country that has ever successfully developed in the past 70 years.

But the aid curse will not allow it, unfortunately.

Re: Research Finds Outright Grants of Cash are an Effective Form of Aid to the Poor

#68

Post by nostrademons »

yaix wrote: post #67
tedsanders wrote: post #64

Earlier quoted context omitted.

I think the argument is that initial capital can jumpstart that production of value. If you spend 10 hours a week maintaining your straw roof, and then someone buys you a metal roof, you can now spend those 10 hours a week on an exportable trade/product.

I know that argument, but it is incorrect. Production needs to be efficient in order to compete. Efficiency needs knowledge. These "groups of poor" lack that knowledge. And the amount of free money is way to low to produce anything with enough surplus value. How many unskilled carpenters, metal workers, and hair stylists do they need? I am currently in Kenya, and the amount of barber shops is amazing. Production of v…

I think both these explanations are missing that there are many factors behind successful economic development, and increasing one factor of production will help if it is the limiting factor, but hurt if it is already abundant.

If you give money to people who already have technical know-how, a willing market, a solid distribution network, and a stable legal system but just lack access to capital, it will usually have very good returns. If you give it to people who have none of these, it will get spent on whatever good happens to be available, usually booze. If you replace the government of a country that has capital, an educated populace, and solid infrastructure but suffers from endemic corruption and lack of solid legal foundations, you will probably also help spur economic development.

What I wish more poverty-alleviation problems did was focus on identifying and eliminating bottlenecks to economic growth. The casual American readership loves to think there's one solution and then loves to argue over what it is, but I don't think it works that way. Poverty is complex; the reason that inner-city Baltimore is poor is very different from the reason Kenya is poor, which is different from why rural China is poor.

Re: Research Finds Outright Grants of Cash are an Effective Form of Aid to the Poor

#69

Post by twotwotwo »

cjbprime wrote: post #3

If you find this persuasive, consider donating to http://www.givedirectly.org/ , which performs unconditional cash transfers to the poorest people in Kenya. Give Directly is the subject of this writeup[1] on GiveWell, and this excellent episode[2] of This American Life. [1]: http://www.givewell.org/international/top-charities/give-dir... [2]: http://www.thisamericanlife.org/radio-archives/episode/503/i...

More from one of cjbprime's sources: GiveWell does a lot of evaluation of charities, trying to find where an individual donor's dollar can make the most difference. They hold donations to GiveDirectly to a pretty high standard, comparing it against stuff like antimalarial bednets and deworming, and think it comes out looking alright. In addition to cjbprime's link, they've written:

1) Cash transfers intervention report--talking about where recipients spend the money, GiveWell's worries about transfers, and studies on the topic: http://www.givewell.org/international/technical/programs/cas...

2) The Case For Cash--posted after their recommendation of GiveDirectly, talking about how a one-time cash transfer can have long-term benefits and how giving to the third-world poor differs from giving to the U.S. poor: http://blog.givewell.org/2012/12/26/the-case-for-cash-2/

3) Responses to objections on cash transfers--mostly about more in-the-weeds issues, like how to interpret their numerical comparisons among cash, bednets and deworming: http://blog.givewell.org/2013/07/31/responses-to-objections-...

They produce a lot of thoughtful research with a lot of effort to ground their recommendations in reality--browsing around their site a bit is a pretty rewarding use of time if you're interested in this kind of thing.

Re: Research Finds Outright Grants of Cash are an Effective Form of Aid to the Poor

#70

Post by repiret »

jcroll wrote: post #52
justinpombrio wrote: post #50

Earlier quoted context omitted.

Presumably because $20 goes further in Kenya than in wealthier countries.

My only point is that to me, giving cash to Kenyans and giving cash to beggars seems morally equivalent. Not saying you shouldn't do either but I do think if you give Kenyans cash but have qualms with giving beggars money, well I don't think that makes much sense.

I believe there are people with the necessary character to be economically successful, but who have never had the economic opportunity to move beyond their basic needs and are therefore poor. I also believe there are people who have had many economic opportunities, but have squandered them, and are therefore poor.

In the context of the adage "give a man a fish and he'll be fed for a day, teach him to fish and he'll be fed for life," one can expect cash given to the first group to be spent on fishing rods, while cash given to the second to be spent on fish.

I find giving cash to the first group to be morally different than giving cash to the second group, and I suspect that poor Kenyan villagers are likely to belong to the first group, while beggars in wealthy developed countries are likely to belong to the second.

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