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Cash, goods, or services? The poor say cash

Earlier this month, while leaving a recipient’s home after a chat about his purchases and experience with GiveDirectly, I noticed a new structure beside his house that I hadn’t seen on my way in. “What’s that? Did you buy that with the transfer as well?” I asked, and my colleague Erick, Senior Field Officer, translated.

The recipient explained that no, this structure was actually a pig pen built for him by an NGO that was offering residents of that village the option to go into either pig or chicken rearing. I followed up, “Now that you’ve been the beneficiary of two NGO programs, how would you compare the experiences with the two?”

His response: “If I had wanted a pig pen, I would have just bought one.”

More and more donors and policymakers are seeing the benefits of cash as a way to alleviate poverty—it’s efficient, transparent, and proven to have impact across many outcomes. But the perspective that matters most to me is the recipient’s own.

In a randomized sample of recipients from our two most recent campaigns in Kenya, 95% said they would prefer to receive cash instead of goods or services (n=428). We also asked them to explain their stated preference; the unedited responses, which were transcribed by our staff as accurately as possible from phone conversations, are here.

Many of the themes in these responses explaining why cash is better than goods or services are ones that we would expect—that people have different needs and priorities, and cash enables them to do exactly what is needed. In the words of one recipient, “Its [sic] the wearer of the shoe who knows where it pinches, so he prefers to spend himself.” Other reasons they gave are a bit more surprising:

  • A greater sense of responsibility about the goods or outcomes — “People will treasure what they buy as there is some great value attached to what one buys on their own” and “He will feel more responsible when he spend it by himself”
  • Ability to do multiple things rather than one big project — “People would wish to do several small things with the money” and “He is also able to use the surplus on other miscellaneous expenditures”
  • Ability to respond to shocks — “Cash transfer helps you with time whenever a problem comes up” and “It will help me solve other new other issues that will arise later on with time”
  • Dignity from being able to set your own standards — “Some people might complain when things are bought for them which might not fit their standards” and “He will have the opportunity to buy the things he thinks are of the best quality and are of his taste unlike when GD does the shopping for him”
  • The simple pleasure of having money in hand — “It’s a source of pride and happiness having money and marching, in the company of his wife, to the Mpesa agent to withdraw money” and “Money its self comes with satisfaction and joy”
  • Empowerment — “Because she wants to feel a boss of her own” and “I am mature enough to make my own decisions”

One theme in particular struck me deeply. Some recipients said that even if it were just a matter of asking GD for what they needed, they would be embarrassed to ask for the things they most want. One recipient said “There are needs that are between a couple like under pants that they would be ashamed to ask GD to buy for them.” Another said “there are things which she wouldn’t be free to tell GD to buy for her such as blanket.” If I were running a different program, where recipients had to come and ask me for what they needed, I would want nothing more than to help them buy underwear and a blanket—basic needs that provide both comfort and dignity. The fact that they would feel ashamed to ask breaks my heart, and indicates to me a problem in the system of development. The poor shouldn’t feel that their needs aren’t good enough for donors; donors should be serving the real needs of the poor. Reading these responses has bolstered my confidence that I’m in the right line of work—giving people the autonomy and dignity to do what matters, with pride and confidence rather than embarrassment and shame.

We have a lot to learn from recipients about what makes a great development program, but I feel humbled and honored to be on the right track.