Humanitarian hipsters take note: The hottest thing buzzing in the aid and development world these days is the cash transfer!
See that guy on the corner with a cardboard sign asking for money? If he was an aid expert, he’d say what he really wants is an ‘unconditional cash transfer.’
The New York Times recently enthused about new research done in Kenya that discovered if you give poor people money without any strings attached, they actually spend it on things they need like food or home improvements. The researchers discovered that having more money resulted in “increased asset holdings” as well as “psychological well-being.”
Before you say “Duh” here are others who reported this as big news
Economist Pennies from heaven
So why is this somewhat obvious finding – that giving money to poor people improves their lives – being treated like a surprise and big news?
Consider these well-known words of wisdom: Give a man a fish and he eats for a day but teach him to fish and he eats for a lifetime.
Many critics of traditional aid, or of charitable endeavors in general, have long attacked what they see as the dis-empowering nature of simply giving the poor food, clothing, drugs or even a fish.
The controversial economist Dambisa Moyo is perhaps the poster child for this perspective, arguing in her book Dead Aid that this approach (other than for disasters or emergencies) just further entrenches the poor in dependency and also undermines governments in poor countries. Bill Gates, a proponent of foreign aid, once (very uncharacteristically) called Moyo’s ideas evil.
Those who at least partially agree with Moyo’s contention, that traditional aid often doesn’t work to reduce poverty and inequity, often contend that what’s needed is to move away from old-fashioned aid and employ anti-poverty investments or strategies that are, well, more akin to teaching a man to fish rather than handing him a dead cod. Yet now some of the same cognoscenti are all excited about cash transfers as the next, new big thing for fighting poverty and inequity.
Chris Blattman The Cashonistas rejoice
Amanda Glassman Cash transfers and the deeper causes of poverty
(Editor’s note: Glassman, Blattman and Charles Kenny have given me a bit of grief on Twitter for implying that they share the same views on foreign aid and development as Moyo. Fair enough. I didn’t mean to imply that. All I meant was that many experts who advocate moving away from the charitable mindset on aid and development – which I think they all do – nevertheless favor the cash transfer, which looks a lot like simple charity to me.)
Because the proponents of this approach are mostly economists and academics, they don’t call this ‘giving money to poor people.’ That would be too obvious. So they call it a cash transfer. And there are two flavors – conditional and unconditional. Conditional cash transfers mean giving people money with conditions, with strings attached. Unconditional cash transfer is, essentially, like handing a fiver to that guy on the corner with the cardboard sign.
What’s so fascinating is that these experts appear to be saying we don’t even need to give the poor guy a fish. We don’t have to actually engage with this poor fishless wretch to teach him anything. Just give the guy money and walk away. Easy peasy!
Perhaps the next most obvious question the experts can try to answer is if the concentration of wealth worldwide has anything to do with why people are poor – and if rather than just finding a new patronage approach to fighting poverty we can adopt an equity approach. Those tax havens seem like a good place to start.
New suggested mantra: You can give a man a fish or some money and he will be able to buy a beer to chase down his fish and chips. Or you can teach him how to get more money by fighting to repair the many structural root causes of his poverty. I don’t think that will catch on….