Google-Funded Study Finds Cash Beats Typical Development Aid (wired.com)

Traditional international aid programs typically offer some combination of clean water, livestock, textbooks, and nutritional supplements. A new study funded by Google.org and the US Agency for International Development asks whether the poor would benefit more if they were given cash and free to spend the money as they see fit. Wired: Researchers had two goals: compare an established program to combat childhood malnutrition with giving people the equivalent value ($117 per month) in cash, and compare the cash equivalent to a much larger sum, $532 per month. After a year, results [PDF] released Thursday found that found that neither the established program nor its cash equivalent were able to improve child health, but the large cash transfers significantly improved people's health and financial standing. On the surface, that's not surprising. Of course giving people more than four times as much money gives them access to better nutrition. But the study's co-author Andrew Zeitlin, a professor from Georgetown, says the idea was to provide benchmarks for future programs; it's not unusual for nutritional aid programs to cost $500 or even $800 per month, he says.

The traditional malnutrition program, called Gikuriro, was funded by USAID and administered by Catholic Relief Services. It combined help with water, sanitation, and hygiene with training on nutrition, some small livestock and seeds, and guidance on financial habits like saving. The study focused on households with children under the age of 5 and women of reproductive age, with an emphasis on the first 1,000 days of the child's life. The results indicate that Gikuriro helped recipients increase their savings and increased overall health knowledge and vaccination rates in villages, two of the program's goals. However, neither the malnutrition program nor its cash equivalent led to a more diverse diet, or improved child health, as measured by height and weight. The larger cash transfer, on the other hand, led to improvements in food diversity, a drop in child mortality, an increase in household wealth, and improvements in child health measurements, as well as improvements in village vaccination rates.

Comments

Sure

[balsy2001]

Isn't this one of the basic ideas behind free markets. The invisible hand at work. Why should we assume that what someone from a third world country needs is a cow. I think avoiding cash is based on people's general tendency to want to control others. Don't want them to do something with their charity that they don't approve of with the money.

Re:Sure

[MobyDisk]

The biggest opponents of this kind of thing are the puritanical folks who don't want a single charitable dollar to be used for any non-necessary (in their opinion) expenses.

The biggest opponents of this kind of thing are people who have worked with homeless, or mentally handicapped individuals who don't know how to handle money, or are taken advantage of. The modern welfare systems in the US and Europe do this because experience shows that if you want someone to have a roof over their head, the best way to do that is to put a roof over their head.

That said - this kind of thing does need to be implemented thoughtfully, because it's easy to imagine that organized-crime types will find ways to exploit this to enrich themselves off of charitable giving. As with most things, it all comes down to diligence in the implementation.

Well said. People need to realize that this study wasn't about the welfare system in the US. The situation on the ground in Rwanda is very different from the situation in New York City and the solutions will not be the same. We don't want a knee-jerk reaction that says "replace all welfare with cash" because we've been there before and that doesn't work.

Re:the poors could get a job maybe

[presidenteloco]

So when you get automated out of a job (hypothetical but will be real for say 50% of non-lazy, average competent people soon), would you want your employer who automated your work, and still makes profits, to pay a tax on profit that gives you a bit of universal basic income? Or not?

Even RMS has a policy of not giving cash to pan...

[jedidiah]

> Fortunately you'll never be awarded enough responsibility to have to put your money where your stupid mouth is.

That's just a lame way of saying that you don't have a useful counter argument. In real life, foreign aid gets funneled through multiple intermediaries. ANY of these can skim or steal the whole thing.

Having a fat wad of cash is dangerous in any poor area. You don't need to have gone to Africa to understand this. Some less than "privileged" life experience could have clued you in to this.

Beyond that, we have ample examples from lottery winners of what happens when you give people money when they aren't used to having it.

Again, even those extreme examples aren't even really necessary if you aren't hiding in the suburbs with your head up your ass.

I can point to personally observed examples of poor people being retarded with their money.

Even RMS has a policy of not giving cash to panhandlers.