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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.
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.
Back in the 1980s, more than one study showed that the bureaucratic overhead of the multitude of welfare programs was stupendously high.
Much cheaper to just give poor people the money.
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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.
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Large cash transfers significantly improved poor people's financial standing. How much did this study cost?
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?
Where are we going and why are we in a handbasket?
Give a third worlder $100 worth of food aid, you are transferring that much food from the US. Give them $100 to spend on food and they added $100 to the local economy in the food service industry (such as it exists).
So crazy it's just common sense.
What's with people using the phrase "free market" when talking about direct government intervention.
a) Well run aid organizations (yes, there are several) have local people who understand what the local people need. Rich westerners may buy another water system or some such shit, but rich white people throwing money doesn't work.
b) Directly giving cash to the poor works has been demonstrated to work much better in a very small scale,
c) Directly giving cash to the poor creates horrible inflation on the medium and large scale
d) directly giving cash to the poor gets it stolen by the local tyrants on the medium and large scale.
e) importing food damages agricultural economies
What's worked so far on a macro scale? Killing thieving dictators and replacing them with less corrupt dicatators is marginal, education helps in many cultures, cell phones are huge, as they lead to women's rights. ,
This doesn't mean that cash makes for very good aid, it just means aid programs suck so badly, that even giving the aid as cash is better than what they are doing. Handing out cash is still a lousy way to help anyone.
I'm going to agree with you in part and disagree in part.
> 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.
One should certainly at least ASK someone what they need and want before spending a lot of money getting them something that they might not even want.
There can also be an arrogance among certain communities in the west where think they know better what people need. They feel sorry for people in a condescending way. I've encountered that with my daughter. "Poor little black girl needs my help" kind of crap, when what she needs is for them to get out of the way and shut the F up.
> 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.
For many years my largest area of giving was helping alcoholics and drug addicts. I've put in a lot of my time and my money helping people get clean and start a new life. Some people decide to spend their money buying themselves a new car, some special their time gardening. I decide rather than buying myself a new car, I'd rather help someone who is in a desperate situation get treatment. I don't use my money to buy myself Starbucks and I don't use it to buy them heroin. I make those decisions because I am responsible for controlling how I spend my resources, not because I want to control other people.
If someone doesn't want to be sober, that's their business. I have no interest in forcing them go to treatment. I won't use my money to give them for crack and meth because I'm responsible for how I spend my money.
As someone else pointed out, in Africa and Central America, donated cash is sometimes used to buy machine guns and land mines. If I choose to use my resources to buy food to share, not land mines, that means I'm being responsible with my resources, not trying to control someone else. I'll never force someone to eat the food I bought to share, only offer it to them.
the cash equivalent to a much larger sum, $532 per month
The Wired.com article contains a footnote that says:
CORRECTION, Sept. 14, 2:55PM: Recipients in the study who got cash received $117 or $532. An earlier version of this article incorrectly said they received those amounts per month.
politicians are like babies' nappies: they should both be changed regularly and for the same reasons
The catch is: if you give out cash, you have to be willing to say "no", if the recipient comes back a day later, having blown the cash on something stupid.
Numerous other attempts have shown: a lot of people will take your cash, and blow it on stupid stuff. Then, they are screwed all over again, having blowing their month's food budget on lottery tickets, or cigarettes, or whatever.
At that point, you have three choices: either give them even more (stupid, stupid), or take away their control by restricting what they can buy (the usual choice), or let causes have consequence - i.e. let them starve until next month. Personally, I'm all for the latter - humas are *supposed* to be smart - but this is apparently not an option....
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Be careful applying the results of this study to the welfare situation in Europe and America. This money was a one-time payment to very poor nations with limited infrastructure. The temptation to oversimplify this into "just give welfare recipients cash instead of assistance programs" ignores the reality of the situation on the ground in these nations.
I used to believe that just giving people money directly was better. I assumed that welfare recipients were mostly people who got stuck in a rut, and just need help getting out, and they can make better decisions about how to spend their money than some big a government organization. Then, I met actually poor and homeless people, talked to the councilors who work with them, and realized how naive I was. The situation is much more complex than the politically-charged stories of someone whose job was replaced by automation. Those are great for putting politicians in office but not for helping people on the street.
There are lots of people who, given a sum of money, have no idea what to do with it. They don't have sufficient math skills to budget, or sufficient literacy to read and understand and pay their bills. A significant portion of welfare recipients have poor education, mental health problems, or drug addiction. As such they are "reactive" with money. They throw it at the thing that has the most short term benefit. So, for example, they might pay their electric bill, then by a new TV, then some drugs, then fall behind on their rent. To help with this, lots of these programs pay the bill directly, or take the form of discounts by paying the bills partially. That way, the person can't choose to spend the money on a TV since the check went straight to the landlord. Or if the rent appears to be so much cheaper, so they are more likely to pay it. Some people take checks to check cashing locations that take 10% off the top. If you live on the poverty level, a 10% hit like that id destructive! So instead the programs give them bank accounts or ATM cards or specialty welfare cards. In Europe and the US much of the welfare state is aimed at these individuals with mental health problems who really can't manage the cash on their own. Giving them cash is disastrous.
An example of this that doesn't involve mental health problems is with young NFL players. The NFL realized that when someone comes straight out of college and gets a multi-million dollar salary, they tend to spend it on hookers and blow. So the NFL began a program of training players how to save and invest. If that seems obvious, consider the humor of walking into the local tax office with a 1040EZ form that shows income of $1 million, showing that you owe the government 20% of that. That's a holy !@#$ wake-up moment that most people don't think about. Similar problems happen with child actors or young musicians.
It's good that we are doing these studies, but I see a lot of responses say "See, we knew all along that giving people cash was better." BUI FTW! But that isn't really what this study is showing us, and we have lots of experience that got us to the system we have today.
Yeah but here's the thing.
The tech is getting better and better, some would say exponentially, but we can just say, real fast, on a year by year basis.
People are getting better too, but on a 100,000 year by 100,000 year evolutionary basis.
You do the math.
Where are we going and why are we in a handbasket?
> 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.
A Pirate and a Puritan look the same on a balance sheet.
And give them $100 worth of food and the dictator just bought a good meal for his army. That's how it works.
You know what they say, it's better 1,000 kids starve then allow one person to misuse the money.
How do we get to feel superior if we can't tell them exactly what to do with the money?
The reason we stopped giving money is because it was being confiscated by corrupt governments and used to fund terrorism of the local populations.
Giving food, etc, means the help is far more likely to go to the people.
The real issue is corrupt governments and we're not about to dispense of them. That's called "colonialism."
Without property rights and security, there is little good that can come with sending cash.
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that soldiers would just come and take it. The say basically the same thing about welfare and food stamps (e.g. that the money never makes it to the ones that need it). They use the same logic to argue against minimum wage increases; e.g. that it'll just raise inflation.
They want you to accept the world as is. That nothing you ever do or try will make the slightest difference. Funny thing is this study says cash is more effective, but that must mean that both cash and food aid are effective, since you can't study how effective something is if it isn't.
One thing I know for certain: cash or food they're both cheaper to drop than bombs. And right now we're bombing a hell of a lot of poor countries.
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Give them trackable stablecoins.
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Where are we going and why are we in a handbasket?
You're right. Any common idiot does "know" that.
Where are we going and why are we in a handbasket?
I agree dealing with adicts is a different kind of problem, the study appears to be focused on international poverty. Maybe they aren’t comparable topics.
I also agree there are places where putting cash out there might not be the best idea, but warlords can just take the food, water, cows etc. too.
General question is what is the point of charity. Everyone can have thier own answer, I would just like mine to provide the maximum benefit to improve lives/minimize suffering.
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Personally? Maybe. Certainly sounds nice. But it should go away eventually. Because I don't want to keep paying the people who used to dig ditches when I want a backhoe to lay my fiber for me. I don't want to have to pay money towards a typists's pension fund every time I write a bash shell script to sendmail. I don't want the abacus union to take their cut whenever I use excel. Technology disrupts established institutions like... paying people to drive trucks. "Trucker" as a job title, will likely start to fade away once self-driving trucks are a thing. That SUCKS.... for truckers. For anyone who likes to buy things that get shipped around on trucks (ie, everyone else), it's a good thing. But it DOES suck for the truckers who lost their job.
So we have unemployment benefits. If you get let go, you CONTINUE TO GET PAID. At least a little bit. For a while. And that's to help you with transitioning you to a new job. To supplement the savings which everyone should have to tide them over. This is real. Current. Here and now. If you didn't know about this then you should step WAY BACK from taking about UBI and socio-economic policy. If technological disruption makes it so it's not a matter of finding a new job in the industry, but retraining and going to a new industry, then unemployment benefits for industries facing automation should get a bigger check for a little longer. So they can go to tech school, college, start a business, or otherwise get the fuck out of the industry that no longer needs them.
This money comes through payroll taxes, (and industry specific bonuses should be industry specific) so it ALREADY IS PAID by the companies letting people go.
UBI is a pipe-dream. Even if you treat it as a replacement for ALL welfare, and convert ALL military spending, you're still only looking at a monthly UBI check around $200/mo. And that might sound super-great to the dregs of society. But it's horrific to anyone actually receiving welfare. And it's, not chump change, but not much to anyone in that 53% that pays more than they recieve between taxes and welfare. And oh yeah, we wouldn't have a military. Which could be a problem in the long-run. If you get into..... revolutionary type stuff, you could default on all the non-discretionary spending. Like social security. The monthly check is more like $800/mo. But this is literally stealing from Grandpa and breaking promises. It's revolutionary in the sense that the social contract is broken and there's fire and blood in the street.
So when you have three jobs and are still one of the "poors", now what?
I eagerly await your insistence that this is not possible, despite it happening to millions of people.
This is a development program. It's not going to people out of work from the auto industry, it's going to third world developing countries. Not enough food to go around, with more people than available jobs (all of which are in the city rather than rural villages).
This article is about people in 3rd world countries... only the wealthiest in those places would have access to video games.
If you give the cash to the men, it tends to get spent on drink and parties, whereas if it goes to women with kids, it tends to get invested in small business and improving the family's health.
And stolen sometimes.
What was your end goal?
-- Tigger warning: This post may contain tiggers! --
In an unrelated story, Apple announced their sales in Rawanda skyrocketted last year.
(-1: Post disagrees with my already-settled worldview) is not a valid mod option.
For Fuck's Sake Slashdot. Fix your damn headlines.
Google's experiment showed no difference between $117 in cash, and $117 in stuff. However, it turns out, $534 in cash gives a much better outcome. The result isn't "cash is much better than stuff." It's "$117 isn't enough, and you really need to get closer to $534."
It's sad that, since this information was in the fucking summary no one read it. But to have self-congratulatory backslapping about the free-market is nonsense on top of that. The free market is good for many things. While it may be better in a charity context, the ability to prevent short term spending (candy, not potatoes), purchase in bulk, get larger donations of goods instead of cash, react to more macro trends, may make it better to ship goods. I mean, the free market should definitely decide a lot of things. But it's not at all clear it has a place with charitable relief.
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Don't give free stuff. It will not be used respectfully.
Don't give cash. It will not be used sustainably.
Give jobs and allow a working industrial economy to take place. That's the only sustainable thing to do.
aaaaaaa
A number of researches have shown that it applies very well to welfare. It helps much more than other welfare systems (which have little benefit) and has much clearer results for reduced crime, increased education, helping people find work, etc.
I'm sure that it won't solve all cases, but it will solve a lot more cases then current welfare systems do, and will cost less.
By cutting out the middleman you will be putting tens of thousands of white NGO workers on the dole. Why would you want to do that?
But the money has to come from somewhere. If a family in a village gets $500 per month and that comes from taxing me $500, then I have $500 less per month, and if my kids get sick I might no longer be able to afford their healthcare, or I may no longer be able to afford to send them to University. We do not yet live in a post-scarcity where machines produce everything for us; we still live in a society where to give to A we must take from B. These studies show benefits to the recipients of the welfare, that's great, but that's only one side of the coin, why don't these studies show where a middle-class family under pressure that are paying the welfare bill can no longer afford their own kids health or education.