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Significant impacts on economic outcomes – Cash in the News

This week, the 2013 randomized controlled trial on GiveDirectly’s work, led by Johannes Haushofer and Jeremy Shapiro, was published in the leading economics periodical, The Quarterly Journal of Economics. As Chris Weller summarized in Tech Insider, “the result: People who received the money were happier, more satisfied with life, less stressed, and depressed less often. They also spent more on investments… and made more money.”

And from Country Director Will Le in Kenya: “In the 30 days ending July 15 we enrolled 712 new households in the program, bringing our total enrollment since March 2016 to 3,739 households… For the month of July 2016, GD Kenya sent transfers of +100M KES to 2,700 households!”

GIVEDIRECTLY IN THE NEWS AND BLOGS

1. Here’s More Evidence that Giving People Unconditional Free Money Actually Works
Tech Insider, Chris Weller, July 25, 2016
Data came from the NGO GiveDirectly, which for the last five years has been wiring small amounts of money to random groups of people in East Africa. The goal is to see what kind of improvements extra cash makes on people’s lives. A larger experiment, involving 6,000 people over the course of a decade, is slated to begin later this year.

2. Be Part of an Experiment to End Poverty
Start with something, July 24, 2016
“Give a man a fish, feed him for a day; teach a man how to fish and feed him for a lifetime”. The recently launched GiveDirectly experiment turns this well-known notion on its head.

3. The Short-Term Impact of Unconditional Cash Transfers to the Poor: Experimental Evidence from Kenya
The Quarterly Journal of Economics, Johannes Haushofer and Jeremy Shapiro, July 19, 2016
We use a randomized controlled trial to study the response of poor households in rural Kenya to large, unconditional cash transfers from the NGO GiveDirectly… Together, these results suggest that unconditional cash transfers have significant impacts on economic outcomes and psychological wellbeing.  

CASH TRANSFER NEWS

4. Tanzania hands out cash to help its very poorest kickstart businesses
Reuters, Kizito Makoye, July 24, 2016
A 2013 World Bank report suggested that Tanzania cash transfer programme had proved to be a successful method for reducing income poverty, and women beneficiaries are more likely to prioritise the welfare of children.

5. Over Two Thousand Liberians Benefit From Social Cash Transfer
Front Page Africa, Edwin Genoway, July 22, 2016
UNDP and the Ministry of Gender, Children and Social Protection (MoGCSP) launched the Social Safety Net Cash Transfer (SCT) programme as part of efforts to support national EVD recovery strategies.

6. Evidence from a Randomized Evaluation of the Household Welfare Impacts of Conditional and Unconditional Cash Transfers Given to Mothers or Fathers
World Bank Group, Richard Akresh et al, June 2016
This study conducted a randomized control trial in rural Burkina Faso to estimate the impact of alternative cash transfer delivery mechanisms on education, health, and household welfare outcomes. The two-year pilot program randomly distributed cash transfers that were either conditional or unconditional and were given to either mothers or fathers. Conditionality was linked to older children enrolling in school and attending regularly and younger children receiving preventive health check-ups.

EFFECTIVE ALTRUISM

7. ​The Cold Logic of Doing Good
The Conversation, Clive Hamilton, July 21, 2016
The aim of effective altruism (EA) is to do “as much good as possible per dollar spent”. Its premise is that much giving is wasted because it goes to causes where the benefits per dollar are low when, if only the donors knew, there are causes whose benefits per dollar are high.

BASIC INCOME

8. You Want A Basic Income? Here’s How We Might Actually Do It
Fast Company, Ben Schiller, July 25, 2016
The idea of a universal basic income (UBI) potentially solves a lot of problems at once. By sending a regular payment to all citizens, we could end abject poverty, deal with technological unemployment, reduce the overall cost of government, give more autonomy to people, and gain support from across the ideological divide as we do it (in theory, anyway). In its long history, some form of UBI has been supported by everyone from Martin Luther King to the libertarian economist Milton Friedman, indicating its unusual appeal.

9. Free Lunch: Radically misunderstood
The Financial Times, Martin Sandbu, July 22, 2016
Proposals for a universal basic income — an unconditional payment from the state to citizens to secure against penury — are in vogue again, as they have periodically been since a version of the idea was first articulated in detail by Thomas Paine more than two centuries ago. The pattern should be well known by now: some the greatest thinkers of an era advocate it, but the radicalism of UBI ultimately suffers a narrow political defeat. So we should perhaps not be surprised by angry attacks on UBI now that the idea is again gaining wide currency. Still, the strength of the invective is striking.

10. We’re About to Live in a World of Economic Hunger Games
Time Magazine, Rana Foroohar, July 19, 2016
Stern rejects the conventional solutions such as education reform being the key to helping people move up the socio-economic ladder or infrastructure projects that put them to work en mass. These, he argues, amount to too little too late. He believes that technology-driven labor market change will simply happen too broadly and too fast. The only way to provide “a dignified way to transition people” to this new economy during the next 15 years or so is to give all American a universal basic income (UBI), something that keeps them out of poverty and ensures social stability. It’s a kind of salve for an economy moving out of the period of mass job disruption and into job creation.