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Want to end poverty? Give poor people money.

Want to end poverty? Give poor people money.

Dylan Matthews of Vox writes that there is an increasing body of evidence suggesting that simply giving poor people money is an effective means of fighting poverty:

A recent randomized trial found that Kenyans who received no-strings attached cash from the charity GiveDirectly built more assets, bought more goods, were less hungry, and were all-around happier than those who didn’t get cash.


But voters and politicians generally prefer giving people specific goods — like housing, food, or health care — rather than plain old cash, for fear that the cash might get misused by unscrupulous poor people. ….

Now, the World Bank’s David Evans and Anna Popova are out with a new paper reviewing what evidence is out there about aid to the global poor and alcohol/tobacco consumption.* They found 19 studies which attempted to measure the effect of cash transfers — both no strings attached ones and ones families receive if they fulfill certain conditions, like school attendance — on the purchase and consumption of “temptation goods”; the studies contained a total of 44 estimates of cash’s effect in various contexts. 82 percent of those estimates showed that the transfers reduced consumption of or spending on alcohol and tobacco. The vast majority of those weren’t statistically significant, so the best conclusion is that there’s no evidence transfers affect drinking or smoking behavior.

Chris Blattman, a professor at Columbia University, however, wonders if the poorest of the poor in Kenya and other developing countries are different than those who ask him for money on the streets of New York:

The average person in Uganda or Liberia is very poor, and the average person does just fine with cash. But a homeless person in NYC is not average (at least not the ones who stand outside my grocery store for years). The poorest of the poor in developed and developing countries might be different.

That would be easier to believe if I didn’t have a cash transfer experiment (stay tuned) where we gave cash to the poorest men in the urban slums of Liberia. We sought out men who, as often as not, made their living through theft or drug dealing, were often homeless, and were rampant users of alcohol, marijuana, and sometimes harder stuff. (We even specifically recruited the guys hanging out in front of grocery stores begging.)

As best we can tell, they saved and invested most of their money, and spent little on “bads”.

I am curious: can anyone suggest reports or studies on the homeless in urban America? Are there agencies that give cash to the poorest and most hardcore homeless in the US? Particularly good program evaluations?

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Ann Fontaine

Give women money -- better chance it will be spent to improve everyone around her.

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Paul Woodrum

To the contrary, Druid, if people have enough to eat, are healthy, and have money to spend, they will be able to further their education, search for a job and care for their families. If they are hungry, sick, and poor, nothing much will happen. The cycle of poverty will just go on.

Why not tap into Jesus: "I was hungry and you gave me food...I was naked and you clothed me, I was sick and you took care of me...as you did it to one of the least of these who are members of my family, you did it to me."

All those Republican governors and legislators who are denying medical care and health insurance to their people because the Affordable Care Act is associated with our first black President, might also want to tap into what Jesus had to say.

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DruidThaxted

The problem with food direct health care and just giving cash to people is it still does nothing to attack the causes of personal poverty. After the resource is used up they're still poor. The question is how to lift people out of the cycle of poverty and release them from the cycle of dependence.

Jesse Snider

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Sara Miles

Why is it so hard to believe that poor people are poor because they don't have money? And why is it so easy to believe, instead, that poor people are poor because, one way or another, they must be "bad": sinful, stupid, unclean, crazy, sick, culturally lacking, short on family values, drug users, criminals, uneducated, unfaithful, unscrupulous, etc...

Perhaps it's too scary to accept that directly giving poor people cash will actually make them less hungry and happier…because then we'd have to do it.

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