26 May 2009

Just give them the damn money

Everyone is talking about unconditional cash transfers at the moment.

As I've said before, I'm a big fan. Poor people aren't stupid, they know what they want and need, they just don't have as much money as they might like. Forget your community empowerment programme and just give them the money.

And with fast-developing technology such as M-Pesa the logistical hurdles for handing out cash are falling.

An additional potential benefit of this kind of programme is the transparency and accountability that comes from the framing of the numbers in an understandable way - an understandable sum per person rather than just millions and millions of dollars.

John Quiggin illustrated this point well in a comment a couple of years ago:
"It's commonly observed that despite receiving over $500 billion in aid in the 50 years since the shift to independence, Africa is still poor and, on the whole getting poorer. The implication is that the aid must have been wasted or stolen, and of course, quite a bit of it has been. But an aggregate number over 50 years isn't very helpful.

Much more useful in thinking about the likely impact of aid is the amount per person per week. With (very roughly) a billion people in Africa and a billion in the developed world, the aid that's been given amounts to about $10 per person per year, or 20 cents per person per week on each side of the transfer. So, the implied complaint of the average Northerner to the average African can be translated "I've been giving you 20 cents a week for years now, and you're still poor – you must have squandered my generous help"."


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