It is Possible to Just Give Money to the Poor

Abstract

Meghnad Desai of the London School of Economics recently suggested that, rather than 'giving fifty billion dollars of overseas aid', we should simply 'find the poor and give them one dollar a week . . . That would probably do more to relieve poverty than anything else'. Two experiences in Mozambique of simply handing out money show this is possible. Payments to demobilized soldiers over a two year period and single payments to flood victims were of the order of magnitude suggested by Desai. Rural people had no difficulty cashing cheques and used the money prudently. The money stimulated the rural economy and thus had a development impact. Administrative costs were between 5 and 10 per cent, much less than in other aid projects. Using the Mozambique experience, this article concludes by suggesting that Desai's proposed one dollar per person per week could be paid as a family grant bi-monthly, which would keep administrative costs low.

Conditional Cash Transfer Programmes: The Recent Experience in Latin America and the Caribbean

“…It has also been found that poor and vulnerable families tend to be those that fail to fulfil the conditionalities needed to obtain the income transfer (Escobar and González de la Rocha, 2009), and that the conditionalities can create opportunities for corruption among those responsible for certifying them (de Brauw and Hoddinott, 2008). Moreover, there is no clear evidence of the effectiveness or efficiency of making social benefits conditional (Draibe and Riesco, 2009;Veras Soares, Ribas and Osorio, 2007;Veras Soares, Ribas and Hirata, 2008), owing to the difficulty of separating the effects of the conditionalities from those of the transfers (Hanlon, Barrientos and Hulme, 2010).…”

“…However, there is no conclusive evidence of this, and some assessments of Bolsa Família even show the opposite effect, whereby the proportion of people seeking work is significantly higher in households using the programme (Camilo de Oliveira and others, 2007). The argument of the potential negative impact of conditional transfers on job seeking has been refuted by several authors (Alzúa, Cruces and Ripani, 2010;Hanlon, Barrientos and Hulme, 2010;Samson, 2009), who show the positive synergy between transfers and the employability of recipient families. In the study by Alzúa, Cruces and Ripani (2010), for Progresa in Mexico there was an increase of between 5% and 7% in the wage paid to male beneficiaries per hour of work.…”

“…47 To assess whether the impact of CCTs is sustainable, it is not enough to measure the proportion of total family income represented by transfers and analyse the extent to which this brings people above the indigence or poverty lines or enables them to maintain income levels in times of crisis. For programmes to have an impact on poverty, the time during which transfers are provided must also be considered, because guaranteeing them beyond the short term (thus overcoming the insecurity of subsistence problems) will place recipient families in a better position to invest in children's capacities and small enterprises, as well as improving their economic inclusion (Hanlon, Barrientos and Hulme, 2010). It is also vital to take into account the effectiveness of exit strategies when in comes to building the capacities of and enabling autonomy of households.…”

The contribution of Bolsa Família to the educational achievement of economically disadvantaged children in Brazil

“…Good reviews on CCT programmes and their effects are now available, including Rawlings and Rubio (2003), Morley and Coady (2003), Rawlings (2005), Rawlings and Rubio (2005), Villatoro (2005), Cohen and Franco (2006), Reimers et al (2006), Lomelí (2008), Fiszbein andHanlon et al (2010 In my review of the literature I focus on educational effects, particularly on studies concerned with children's learning outcomes and progression in the education system.…”

“…Hanlon et al (2010) recognise four principles underpinning CCT programmes: (i) cash transfers as necessary for the fulfilment of the basic human right to a minimum income; (ii) governments as responsible for funding a non-contributory welfare programme able to reach the most destitute; (iii) commitment to long-term provision and large-scale coverage; and (iv) recognition of the productive capacity of the poor and its importance within a broad strategy for development. Common features are also underscored by several other authors, including Simões (2006), Valencia Lomelí (2008, and Barrientos & Santibáñez (2009).…”