Unconditional cash transfers (i.e., just giving people money) are the talk of the blogosphere right now:
- The Economist summarizes a recent RCT of cash transfers in “Pennies from heaven” with the tagline “Giving money directly to poor people works surprisingly well. But it cannot deal with the deeper causes of poverty.”
- Chris Blattman’s take: “and the cashonistas rejoice”
- Amanda Glassman on CGD on conditional vs. unconditional cash transfers.
The post that comes closest to my own feelings is from Matt Collin of Aid Thoughts: “When every argument begins with ‘is it better than cash?’” Here’s an excerpt:
…there are a range of public goods (or semi-private goods which have substantial externalities) which we can imagine might increase welfare a great deal more than a cash transfer of equivalent cost: schools, health facilities, roads, a functioning police force. Basically, any semblance of a local or national state. How many of you would vote for your own government to transfer its entire budget evenly across the population and then shut down all its operation for good? It certainly would make it easier to pay the rent next month, if your apartment complex hadn’t been burned down by the marauding hordes yet.
It’s great, read the whole thing. I wouldn’t go as far as Matt in saying that there is a “current bias towards cash transfers”, but otherwise I agree. There’s growing evidence that cash transfers, conditional or not, work pretty well. That means they’re probably better than many forms of institutional aid, some of which don’t have evidence of working at all. That doesn’t mean they’re better than all forms of institutional assistance, or that all forms are even directly comparable to cash. Many public services in health — I’m thinking especially of vaccination and other investments in preventative health — are unlikely to materialize in response to cash transfers alone. In short, I think it’s useful for both individual and institutional donors to think in terms of portfolios: considering giving cash directly, but also simultaneously investing in the public provision of services.
Some older, related posts:
- Responses to objections on cash transfers (GiveWell)
- Is it nuts to give money to the poor? (Chris Blattman)
- How you can literally give a whole family their entire annual income today for $1,000 (Lee Crawfurd, Roving Bandit), commenting on a recent This American Life episode on GiveDirectly.
- Cash Transfers: Sorting Through the Hype (Berk Ozler, WB Dev Impact)