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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

#81

Post by Freeboots »

breischl wrote: post #17
asperous wrote: post #10

I think the context is super important here. "gave cash to groups of young people so they could learn a trade and start their own businesses." In Uganda. These people were pretty much starving before. “These were mostly farmers who had work 10 to 20 hours a week and earned about $1 a day," With different people, culture, attitudes, environment the effect might be completely different in America, for example.

In addition... To get the cash, applicants had to form a group with others in their village and submit a proposal showing how they planned to use the money It's not clear how selective they were, but it does sound more involved than just "fill out this form and get your cash." So it's a group of people that were selected, or at least self-selected, for some minimum amount of initiative and ambition. The title of the…

The selection process is usually along the lines of 'the poorest of the poor'. Organizations such as this identify an area or ethnic group, then a village, then a family. The recipients are selected, then approached, in such a way that minimizes self selection. The idea is to bring a poor family up to the standard of their slightly less poor neighbours. Then the village up to the standard of other villages. then the province. etc.

I personally dont see the invited comparison, at least not directly in the title, given the context of a 'Global Impact' article. This could be simply my lens, and yours. I work in development field (mostly cambodia), so i automatically apply it to what i see here. You seem more involved with the situation in US(?) an rightly say that it would not apply in the same way.

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

#82

Post by makomk »

twotwotwo wrote: post #65
cjbprime wrote: post #30

Earlier quoted context omitted.

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…

Actually, pretty much only places that have lots of extremely poor people have high-quality mobile payment networks, because they're the only places where there's a market.

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

#83

Post by Freeboots »

cjbprime wrote: post #35
up_and_up wrote: post #32

Earlier quoted context omitted.

Sorry, but people are starving in America: http://abcnews.go.com/Health/US/hunger-children-america-slow... Are you aware that many kids in America grow up without access to even a basic grocery store and decent nutrition? Starvation can be slow and steady.

Yes, but the starving child in Boston in your article went to a nearby world-class hospital where he was given free food. Poverty exists in the US; extreme poverty (living under the purchasing power equivalent of USD $1.25 per day) is extremely rare ( http://www.un.org/esa/socdev/rwss/docs/2010/chapter2.pdf

Im not sure if you're taking purchasing power into account, but if not, be aware that US$1 a day is doable in many countries, but very much not in america. Poverty is relative, just saying.

And for what its worth, i live in cambodia and have lived on such a budget, albeit only for 3 months.

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

#84

Post by lawnchair_larry »

pmorici wrote: post #38
argumentum wrote: post #2

This is only "surprising" to those who think they know how other people should live. I've always favored this approach (a minimum income, or negative income tax .. whatever you want to call it) as a replacement to all other forms of welfare. If I am to spend my tax money on those in need, I do not want more than half of it going to upper middle class bureaucrats and middle class administrators.

How do you feel about things like Social Security Disability benefits? By most accounts there is some very real abuse of that social welfare program that could cause it to not be there for people who legitimately need it. http://www.cbsnews.com/video/watch/?id=50156574n

The cost of the abuse does not exceed the cost of losing the program entirely and leaving the non-abusers high and dry. It's not an ideal situation, but we are worse off if we throw the baby out with the bathwater.

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

#85

Post by Freeboots »

asperous wrote: post #10

I think the context is super important here. "gave cash to groups of young people so they could learn a trade and start their own businesses." In Uganda. These people were pretty much starving before. “These were mostly farmers who had work 10 to 20 hours a week and earned about $1 a day," With different people, culture, attitudes, environment the effect might be completely different in America, for example.

ikr, people in this thread seem to be reading this into the context of the 'living wage' idea floating around. But its nothing like that. These are one off grants to people living in completely different circumstances. In developing countries whose governments are not able to provide basics most developed countries take for granted.

The living wage is an income, not a one off. And its being talked about in terms of developed countries whose government would distribute said income.

The difference is easy to see when you consider what you would do in each situation.

Situation A) You are given 6 months pay to increase your standard of living. Many/most people would invest such a windfall. They would pay debts, buy land, stocks. Many would treat themselves to a nice car or something, but i dont think people who NEED that money would do so.

Situation B) You are told that from now on you will get $1000/m. Forever. Welp. Im going to cut my hours and go for a drink. Again, many people would treat this as a windfall to be saved. But some (more than situation A) would spend it, knowing they will get more next month.

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

#86

Post by csomar »

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 think the idea is to give the money to random people (not necessarily the ones who needed). A beggar is not exactly random.

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

#87

Post by notahacker »

ma2rten wrote: post #20
breischl wrote: post #17

Earlier quoted context omitted.

In addition... To get the cash, applicants had to form a group with others in their village and submit a proposal showing how they planned to use the money It's not clear how selective they were, but it does sound more involved than just "fill out this form and get your cash." So it's a group of people that were selected, or at least self-selected, for some minimum amount of initiative and ambition. The title of the…

In addition... The simple fact that someone came after those people to check what they did with their money, for the purpose of the research, probably influenced the result (at least if they knew or suspected that beforehand). If they said they would use the money for business, but then instead spend it alcohol and gambling, that would be very embarrassing. If on the other hand, a program like exists this for a long…

Absolutely. The problem with these kind of studies is how difficult it is to generalise from them. One of the cited examples concludes making people accountable for the money was less efficient even though accountable people spent the money better because it cost "up to $1800" per $150 loan for followup studies. That hires a well-educated person for a year in a developing country, which strongly suggests that you'd reach a wholly different conclusion if the programme was designed and administered 100% locally. Of course, there's also the issue that if a particular group doesn't have any followup studies associated with the research, then observations of how they spent the money are inevitably less accurate.

Then there's the simple observation that repayable grants can be passed on to others (less admin costs) and are sustainable on a larger scale in an economy. Teach a man to fish and his interest repayments can teach his neighbours to fish, provided those neighbours also reasonably expect to get a positive return on the rod they invest in. That latter bit is important in assuming the net effect doesn't involve very expensive fishing rods and depleted fish stocks...

Whilst loan based aid is not unproblematic (there's some hideously expensive administration and profiteering in some microfinance problems, and poor people many people do use them as expensive consumer loans) the same technology that earns Kenyan grants such rave reviews for their effectiveness can also be applied to strings-attached microfinance: M-PESA can potentially cut the cost of receiving microloan repayments even more effectively than it cuts corruption in doling out the aid. Just because the desperately poor don't spend all their grant money on prostitutes and alcohol (which isn't that surprising if you've ever visited a developing country) doesn't necessarily mean they can't be efficiency helped in other ways

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

#88

Post by notahacker »

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.

Not really. Giving beggars has the side effect of incentivising begging, which many people would not consider to be a morally neutral decision.

One can also reasonably judge that on the balance of probability, aid money will almost certainly have a significant positive effect on the lives of Kenyans. The effect of a comparable amount of cash on the lives of beggars in Western countries is much less unequivocally positive (potentially a net negative if its spent on substances that harm the beggar's health, or the income disincentives them from seeking programs that aim to help them with more than just their next meal)

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

#89

Post by venomsnake »

jcroll wrote: post #49
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...

Why not hand the next beggar you see a $20?

Various reasons - first of all - in the developed world there are social safety networks that should take care of the less fortunate. So a beggar on the street means my government has failed.

Second - begging is lucrative industry in parts of the world.

Third poor != beggar. The people that they gave money to were poor but were also young, employed (in agriculture) and integrated into society.

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

#90

Post by Shivetya »

lawnchair_larry wrote: post #84
pmorici wrote: post #38

Earlier quoted context omitted.

How do you feel about things like Social Security Disability benefits? By most accounts there is some very real abuse of that social welfare program that could cause it to not be there for people who legitimately need it. http://www.cbsnews.com/video/watch/?id=50156574n

The cost of the abuse does not exceed the cost of losing the program entirely and leaving the non-abusers high and dry. It's not an ideal situation, but we are worse off if we throw the baby out with the bathwater.

No one suggests losing the program in its entirety, responses of like yours are straight up hyperbole. It is not a valid rebuttal to those looking to make corrective changes.

Far too many abuses are allowed to go on simply because of such arguments thereby reducing the aid we could give to truly needed people.

I am all for helping those in need, nearly 2% of my gross salary goes to CHOA each year, but damn if I am going to believe that there are people on one if not more of the hundred of government programs who don't deserve to be there. The best way to help people is to get more diligent about policing those we do help. Are they getting the right help is the question that we must answer.

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