GiveDirectly Planning to Give $30M in Basic Income to East Africa • Hacker News Board

Re: GiveDirectly Planning to Give $30M in Basic Income to East Africa

#91

Post by pbhjpbhj » Fri, May 06, 2016, 8:47 PM UTC

kogepathic wrote: post #40

Interesting concept. I'll be interested to see if it works. I worked with a company building AC mini grids in East Africa. They connected around 130 households in each village to a 220V grid. The expectation was that people would use the electricity for basic needs (e.g. light, cell phone charging) but also for productive uses (e.g. grinding grain to flour, air compressors, saws, etc). The expectation was that as peo…

Your analysis seems largely as expected but this part to me seemed a bit wrong-headed:

>The vast majority though will waste the money on things which benefit them in the short term, but provide no long term economic benefit //

Things like having a TV? Do you have a TV, is it a _waste_ of money too? Would you say most of the people who own TVs would describe them as a waste of money? After you've got a bed, clean water and food, some sort of diversion from the humdrum is probably the next "need" that most people would address. TV can be a benefit, an inspiration, it's just not an obvious direct economic benefit (unless you're running the local TV shop, electrician or repairer).

Part of the problem with providing utilities with an expectation of them being used to create economic benefit is surely that people don't know how to use them for such purposes? Did you address that with your projects - like if you bought this apparatus for this amount you could process millet and run a company earning this amount.

Couple of questions about your electrical mini-grids - was there any cooperative buying, like setting up a TV in a communal building? How was the power being generated?

Re: GiveDirectly Planning to Give $30M in Basic Income to East Africa

#92

Post by hackuser » Fri, May 06, 2016, 8:48 PM UTC

LanguageGamer wrote: post #24

troycarlson wrote: post #4

Recently fascinated by the thought of piping donations directly to poor populations and allowing them to use it as they wish. I watched the documentary Poverty, Inc. [0] regarding the "poverty industry" and how endless foreign aid in these countries is killing the economy. If Toms shoes dumps 1,000 pairs of shoes in the city center every week, how the hell would a cobbler stay in business. Or if the U.S. pumps an end…

I agree, though it seems a distinction needs to be drawn between aid that's providing goods and services that could be produced locally, vs aid that's providing medical goods and services that couldn't emerge from the local economy fast enough to help those being helped (such as perhaps the Gates Foundation does).

That doesn't solve a major problem: Who is to say what these people need? Give them the money, and they decide for themselves.

UCT fits free market theory, including market flexibility (if needs change or the first idea fails, consumers can change their spending much more quickly than donors can change their programs), and promotes democracy and empowering individuals. It also avoids common problems such as donors' bad decisions and their unanticipated consequences, corruption among those controlling distribution of the goods, and perversion of local markets.

As one example, according to a report in Foreign Affairs, the West's focus on AIDS, malaria, and TB, and their relatively enormous market power, took local medical resources away from more standard health care needs such as child birth, and might have resulted in more sickness and deaths than it prevented (IIRC the details of the article from several years go).

Re: GiveDirectly Planning to Give $30M in Basic Income to East Africa

#93

Post by rossdavidh » Fri, May 06, 2016, 8:49 PM UTC

scottrogowski wrote: post #81

While I find UBI to be a fascinating idea worthy of consideration, I vehemently disagree with running this experiment in East Africa. The proposal seems to either be blind-to or minimizing the potential for unintended consequences. Decades of trying to alleviate poverty in Africa have taught us, more than anything else, that the road to hell is paved with good intentions. Giving food tends to act as “dumping” and wea…

So, we do all the colonial stuff you mentioned (and plenty more you could have mentioned), and then when someone suggests we provide Universal Basic Income in that same region, we suddenly get a "conscience" about it and say no way, it might go wrong? I'd have to say, that sounds a little off, to me.

Re: GiveDirectly Planning to Give $30M in Basic Income to East Africa

#94

Post by thescriptkiddie » Fri, May 06, 2016, 8:50 PM UTC

scottrogowski wrote: post #81

While I find UBI to be a fascinating idea worthy of consideration, I vehemently disagree with running this experiment in East Africa. The proposal seems to either be blind-to or minimizing the potential for unintended consequences. Decades of trying to alleviate poverty in Africa have taught us, more than anything else, that the road to hell is paved with good intentions. Giving food tends to act as “dumping” and wea…

Unconditional cash transfers (what is being proposed here) have proven to be more effective than the "dumping" of material aid you're protesting. If you give a village shipments of rice their rice farmers go bankrupt, if you give them cash they can spend it at local businesses or start businesses of their own or import things they couldn't get otherwise. It's also hard to give too much cash (as long as you are distributing it equitably), because if there is excess capital in one place that will only encourage trade.

http://www.poverty-action.org/study/impact-unconditional-cas...

Re: GiveDirectly Planning to Give $30M in Basic Income to East Africa

#95

Post by scotty79 » Fri, May 06, 2016, 8:52 PM UTC

scottrogowski wrote: post #81

While I find UBI to be a fascinating idea worthy of consideration, I vehemently disagree with running this experiment in East Africa. The proposal seems to either be blind-to or minimizing the potential for unintended consequences. Decades of trying to alleviate poverty in Africa have taught us, more than anything else, that the road to hell is paved with good intentions. Giving food tends to act as “dumping” and wea…

> Who knows what unintended side effects of UBI will be?

Care to make a guess?

Re: GiveDirectly Planning to Give $30M in Basic Income to East Africa

#96

Post by pratyushag2 » Fri, May 06, 2016, 8:52 PM UTC

tryitnow wrote: post #76

gshulegaard wrote: post #71

Earlier quoted context omitted.

Article you may be interested in from 2013: http://www.economist.com/news/international/21588385-giving-... Basically UCT (Unconditional Cash Transfers) work well when lack of capital is the primary problem. But often times the cycle of poverty is self-reinforcing because of deeper issues and UCTs don't fix those (such as undervaluing education). Instead CCT (Conditional Cash Transfers) can often be more corrective t…

Makes sense. I like the UCT in principle, but I can't argue with the evidence that CCT does have positive effects. Of course, CCTs may eventually have the same problem as traditional welfare policies: self-perpetuating bureaucracies, contradictory incentives, resource misallocation, etc, etc.

New Incentives does conditional cash transfers (CCTs) in West Africa. CCTs have a lot of research behind them as the parent comment noted.

GD's one-time, large transfers help achieve concrete benefits. Super excited to see the basic income experiment in East Africa evolve.

Re: GiveDirectly Planning to Give $30M in Basic Income to East Africa

#97

Post by ultramancool » Fri, May 06, 2016, 8:53 PM UTC

dragonwriter wrote: post #72

ultramancool wrote: post #67

Earlier quoted context omitted.

> What, people are going to stop wanting luxuries? Not sure about you, but most of the luxuries I own, I've basically only bought because I had money for them. If I didn't have money to blow on them, they really don't bring me that much joy, relatively basic items would suffice. So many things I think of as the real luxuries these days are free or basically free. I can spend hours watching youtube or playing games fo…

You might accurately describe what you would do, but I think the evidence from the world around us is that most people in the US do see sufficient marginal utility in things beyond what it takes $15K-$20K -- or even $30K-$40K -- to afford to exert additional effort to earn beyond that level given the opportunity. So even if we could somehow establish a UBI that would (after accounting for whatever inflationary effect…

> I think the evidence from the world around us is that most people in the US do see sufficient marginal utility in things beyond what it takes $15K-$20K -- or even $30K-$40K

Do we actually have evidence for this? If you're comparing working a skilled vs unskilled labor I think there's a lot more difference than just pay there that must be considered. In a lot of ways the skilled job is lower effort, even if the up front effort requirement was higher, the daily effort requirement is often lower.

You also have to consider than even a relatively low effort job 8 hours a day is a massive effort difference from zero, which is the alternative you're actually comparing to. Basically, if you need to exert several hours a day worth of effort to get by, you better optimize the value you get back from them. But if you don't need to exert any at all to get by, that's a very different situation.

But maybe I'm just an uncommonly lazy turd. It's possible. I just don't have evidence to say it for certain.

Re: GiveDirectly Planning to Give $30M in Basic Income to East Africa

#98

Post by ppereira » Fri, May 06, 2016, 8:54 PM UTC

scottrogowski wrote: post #81

While I find UBI to be a fascinating idea worthy of consideration, I vehemently disagree with running this experiment in East Africa. The proposal seems to either be blind-to or minimizing the potential for unintended consequences. Decades of trying to alleviate poverty in Africa have taught us, more than anything else, that the road to hell is paved with good intentions. Giving food tends to act as “dumping” and wea…

There is quite a bit of anger and little fact in this comment. GiveDirectly has been running UBI programs in East Africa for years now. They have an all-star cast of economists examining their performance. Their pilot programs were very successful, which is why they are scaling out further.

East Africa, and Kenya in particular, was carefully chosen for two reasons. First, Kenya has a mobile phone network that makes it easy to transfer funds electronically to individuals and then for those individuals to get cash from the funds at local stores. I wish we had this in the West, but we don't because of banking regulations. Second, poorer households in certain communities tend to use natural roofing materials rather than aluminum, which makes it easy to target funding by satellite.

The UBI is a political football in the West. The Mincome experiment was cancelled because of a change in government. The potential utility benefits from a UBI are so great that it would be a shame to think that we have to wait for it to be politically palatable in the West before we can get any data on its effectiveness. Also, as far as poverty relief is concerned, money really does help.

Re: GiveDirectly Planning to Give $30M in Basic Income to East Africa

#99

Post by cpeterso » Fri, May 06, 2016, 8:59 PM UTC

scotty79 wrote: post #95

scottrogowski wrote: post #81

While I find UBI to be a fascinating idea worthy of consideration, I vehemently disagree with running this experiment in East Africa. The proposal seems to either be blind-to or minimizing the potential for unintended consequences. Decades of trying to alleviate poverty in Africa have taught us, more than anything else, that the road to hell is paved with good intentions. Giving food tends to act as “dumping” and wea…

> Who knows what unintended side effects of UBI will be? Care to make a guess?

Perhaps people from neighbor countries will emigrate, seeking UBI?

Re: GiveDirectly Planning to Give $30M in Basic Income to East Africa

#100

Post by scotty79 » Fri, May 06, 2016, 8:59 PM UTC

flatline wrote: post #85

oconnor663 wrote: post #84

Earlier quoted context omitted.

This seems to be an argument against operating any charities at all in East Africa. That must be controversial?

It could certainly spell doom for future UBI proposals if the first prominent implementation goes badly, and it could be that it went badly due to factors that are simply not as prevalent in the West.

I think UBI will fare way worse int the West because of how many people rent places to live. UBI will get mostly sucked by landlords.