Back to List

A sizeable multiplier effect — Cash in the News

Two recent studies released by Unicef’s Office of Research-Innocenti show the positive effects of cash transfers in Africa, on both increased income as well as improvements to families’ overall livelihoods. In the UK, the debate on basic income continues to pick up, with major Labour leaders expressing interest in the idea.

GIVEDIRECTLY IN THE NEWS AND BLOGS

1. Skeptic no longer
Arkansas Online, Gleb Tsipursky, September 2, 2016
Now, I could wait for more research, such as the Oakland study or another forthcoming one by GiveDirectly. This nonprofit, highly rated by the best charity evaluator in the world, GiveWell, focuses on cash transfers to poor households in East Africa. GiveDirectly decided to run the largest study of basic income to date, using $30 million to cover basic living costs of poor East Africans for a decade to settle questions about basic income’s long-term impact. However, I could reasonably predict the future, and conclude that these new experiments will show results similar to previous ones.

2. FG confused about the economy? It’s simple, just give the poor money
Daily Trust, Ahmed Abdulrahman, August 31, 2016
While various countries have used cash transfers since the 1980s – Mexico, for example, gives poor families monthly stipends – it’s relatively new to the nonprofit world. In Kenya, GiveDirectly uses data to identify the poorest households and then transfers them $1,000, the equivalent of a year’s salary, no strings attached. The recipients can spend the cash on whatever they need most.

CASH TRANSFER NEWS

3. Gov’t introduces Single Registry to effect data sharing
Citizen Digital (Kenya), Sofia Ali, September 2, 2016
In a bid to improve the management of the cash transfer programs to the elderly, the Ministry of East Africa Community and Special Programmes in collaboration with World Food Program has developed a comprehensive Single Registry set to gather data of the beneficiaries to the Inua Jamii Programme.

4. Can Unconditional Cash Transfers Lead to Sustainable Poverty Reduction?
Unicef, Innocenti, Sudhanshu Handa et al., August, 2016
We find far-reaching effects of these two programmes, not just on their primary objective, food security and consumption, but also on a range of productive and economic outcomes. After three years, we observe that household spending is 59 per cent larger than the value of the transfer received, implying a sizeable multiplier effect. These multipliers work through increased non-farm business activity and agricultural production.

5. Happiness and Alleviation of Income Poverty
Unicef, Inncoenti, Kelly Kilburn et al. August 2016
This study analyzes the impact of an exogenous, positive income shock on caregivers’ subjective well-being in Malawi using panel data from 3,365 households targeted to receive Malawi’s Social Cash Transfer Programme that provides unconditional cash to ultra-poor, labour-constrained households… Households use the cash to improve their families’ livelihoods, ensuring provision of their basic needs including food, shelter, and clothing. Reduction of these daily stresses makes caregivers happier about their current situations and gives them hope that the future will continue to get better.

EFFECTIVE ALTRUISM

6. ​How to give better
The New Humanist, Toby Lichtig, September 5, 2016
The answer, for me, has been Effective Altruism and consequentialist thinking more broadly. Effective Altruism asks the question, “How can we accomplish the most good in the world?” Importantly, Effective Altruism is not a set of answers or a pre-defined ideology, but a worldview that attempts to apply evidence and reason to arrive at better answers than before.

BASIC INCOME

7. Next Economic Survey might float Universal Basic Income balloon
The Economic Times (India), Meera Mohanty, September 5, 2016
Universal Basic Income, or a single unconditional income that reduces government efforts to ensure last-mile delivery of individual social security schemes, could feature in the next economic survey, India’s Chief Economic Advisor Arvind Subramanian told a packed auditorium of students at an outreach here last week.

8. John McDonnell: I will win the argument to give every citizen in the UK a basic income
The Independent, Ashley Cowburn, September 1, 2016
Shadow chancellor John McDonnell has insisted he can “win the argument” on universal basic income – a radical idea to transform the welfare state – within the Labour party. In an interview with The Independent, following a rally at Ealing Town Hall, the Hayes and Harlington MP said the policy could tackle issues related to poverty and simplify the welfare state. Universal basic income would involve ditching means-tested benefits in favour of an unconditional flat-rate payment to all citizens, whether they are in work or out of work.

9. On the negative income tax as a next-generation, anti-poverty program
American Enterprise Institute, James Pethokoukis, August 31, 2016
The goal: reduce poverty, while also promoting work. One anti-poverty idea receiving much discussion over the past year is the universal basic income. Cut all households checks — varying according to household — large enough to keep them above the poverty line.

10. Finland’s Basic Income Experiment Is Too Timid
Bloomberg View, Leonid Bershidsky, August 31, 2016
Finland’s flirtation with an unconditional, universal basic income has entered a decisive stage: Draft legislation for a pilot project has been presented for public discussion, which will run until Sept. 9. It’s clear that what the Nordic nation wants to try is neither overly ambitious nor particularly useful.