6 ms·

I'm a Kenyan and I can tell you that this will do more harm than good. NGO money has been distorting our economy for years now... giving people livelihoods they

by mwambua 10y ago

I'm a Kenyan and I can tell you that this will do more harm than good. NGO money has been distorting our economy for years now... giving people livelihoods they can't sustain, making job opportunities that create no value and making our government vestigial. The poor people that you're supporting elect the same corrupt politicians every year because they have no idea that the government is supposed to be supporting them. I pay 30% tax as a lower-middle income worker but I see very little of this used productively. The majority of voters don't pay taxes and rely on aid for everything from farm inputs to school fees. As a tax-payer who understands what taxes should do for me... I live with very poor infrastructure and amenities while the government squanders away money. If developed countries keep propping up our poor majority, they'll never learn to find innovative solutions to their problems and elect governments that will create sustainable wealth. - Frustated Kenyan

dluan 10y ago
Curious what you think about more independent schemes like microfinance or loans for education. Have you noticed any difference between that and outright aid?
- mwambua 10y ago
  Yeah, those schemes tend to work a little better. If the recipients of mircro-financing are subject to the risks associated with taking credit, they tend to invest it better. For instance, the mobile micro-loans given by Safaricom (http://www.safaricom.co.ke/personal/m-pesa/do-more-with-m-pesa/m-shwari http://www.safaricom.co.ke/personal/m-pesa/do-more-with-m-pe...) are actually given by a bank and defaulters are black-listed for loans as little as Ksh. 500 (~ 5 USD). These schemes create opportunities whilst reminding people that poor decision-making has consequences. The only reason that this works is because these schemes are run by banks rather than non-profits. Perhaps there's a little room for more regulation around the margins these institutions should make off of these loans... but at the same time they're opening up credit lines to people who would have never had them.
skunkworks 10y ago
How are poor people supposed to find innovative solutions to their problems and elect governments that create sustainable wealth while they're steeped in desperate poverty? I believe that education is the tip of the spear, but are there any examples where a poor majority has pulled itself up by its bootstraps?
- rayiner 10y ago
  Most of the western world?
  - nathanappere 10y ago
    (So all Kenya needs to do is create a colonial empire and exploit other countries ?)
    - patrickaljord 10y ago
      The western world was already the most advanced and richest part of the world before they started colonizing, which indeed made them even richer. Note that the people they conquered whether it were the Incas or else were also empire with colonial ambitions, except they were way less advanced.
    - MichaelBurge 10y ago
      The United States seemed prosperous enough even in its early days. Even though it had to pay taxes and such to Britain. I guess the best argument along those lines you could make is that the US depended on imported slaves.
      - colinhb 10y ago
        Also: took land and resources from native Americans and developed and exported them.
    - tormeh 10y ago
      You've got the causality wrong. Europeans exploited other peoples because European societies were more advanced. They did not become advanced because they exploited.
jlg23 10y ago
Wouldn't a basic income reduce the dependency on NGOs? If the situation in Kenya is similar to what humanitarian aid workers tell me about Haiti it's basically people joining NGO programs to make a livelihood but not planning on using learned skills or connections made to make a living independently when the project ends but rather looking for the next program. This is a sincere question, I'm fully aware that a lot of NGOs intend to do good but do more harm :(
- mwambua 10y ago
  You and @skunkworks both raise interesting points. I'll have to think through this some more... I have more experience with code than economic policies; but here's a first go: I have a problem with neither paying taxes, nor helping raise up the underprivileged. However, I believe that the former should facilitate the latter, rather than feeding some official's offshore account. I think that if external funding were withdrawn, then we'd see a lot more done to fairly distribute government revenue and our government would be motivated to increase that revenue by improving our balance of trade. I'm a little biased towards capitalism... so I believe in equal and opposite reactions. The developed world deserves to eat what it's worked for too. Maybe we need a little negative pressure to see that. https://www.youtube.com/watch?v=L-DgV2vixSo https://www.youtube.com/watch?v=L-DgV2vixSo
skybrian 10y ago
Assuming they spend the money, why doesn't it help the businesses who sell things to them?
tootie 10y ago
This is the inverse of what NGOs do. Put money in the hands of consumers and let them drive local markets to produce what they actually want and need.
- dragonwriter 10y ago
  It is actually an NGO doing this, and its not the only NGO that fits something closer to that description than its inverse.
TheMagicHorsey 10y ago
Your government is already vestigial, I'm sorry to say. Giving aid is the worst thing possible if its given to the state. But giving it to the citizens is perhaps better, because they can directly improve their lives by investing in their children, in better tools, and in things like cattle that can directly generate sustainable income. Free money won't destroy your society. It's how that free money comes into your society that is disruptive. If the money comes in top down it distorts the economy. But if its given from the bottom, then perhaps things can get better. Its not an experiment that has been tried before.
- chrischen 10y ago
  It's unclear what the effects of a basic income would be in an undeveloped country. For example, if a poorer country raised minimum wage too much it could destroy the economy whereas the same raise in a more developed country will have better short term effects. This could end up being unethical economic experimentation.
  - StephenCanis 10y ago
    That's a bad example since raising minimum wage increases the cost of doing business. Artificially changing the cost of business inputs causes problems in the economy - not the fact that people are earning more money. Giving people money allows them to buy livestock, supplies for their children or food and shelter. This will help to improve their quality of life and spur the local economy. I'm hard pressed to see how this could be considered unethical.
  - azernik 10y ago
    I think more scary is the macroeconomic effects of a large amount of cash on currencies and prices. $30m is a relatively small amount (compared to a total GDP of e.g. more than $50b for Kenya), but of concentrated in poor areas could have unintended effects.
  - devishard 10y ago
    > It's unclear what the effects of a basic income would be in an undeveloped country. This is true, but given the evidence we do have (GiveDirectly's previous programs and previous basic income programs in developed countries) I see no reason to believe the effects will be anything but positive.
babayega2 10y ago
I'm Burundian in East Africa and there is a saying in my country that "free things make you stupid". NGO had been giving almost free loans to households ( $50 to $100) and some have been addicted to free stuffs and now that most NGOs have left the country, that's when we find out our true poverty : poverty starts in the head. We were stupid. But naturally, The Pareto principle [1] made that 20% of clever households acquired business minded practices and they're economically independent now. But the rest is still begging and waiting the return of NGOs. [1] : https://en.wikipedia.org/wiki/Pareto_principle https://en.wikipedia.org/wiki/Pareto_principle
MarkMc 10y ago
Here's a hypothetical question: Imagine GiveDirectly performed a rigorous randomised control trial where they found that the people who received the grant had significantly higher income after 2, 5 and 8 years compared to the control group. Would that be enough to change your mind that they are "giving people livelihoods they can't sustain"?
nkoren 10y ago
I upvoted your comment not because I agree with it, but because yours is an important voice to be participating in the discussion, and I'm glad you're here. And actually, I do agree with everything you say about how NGO money distorts the economy. But Basic Income is different, and I urge you to try to understand those differences. Traditional NGO/charity consists of giving money/stuff/services to the poor. The problem with this is that if you are a poor person who depends on that money/stuff/services, and you manage to find a job to get yourself out of poverty, then the money/stuff/services you've been depending on will no longer be available to you. This is a problem, because those NGOs are much more stable then your marginal getting-out-of-poverty job. So the person in poverty is faced with a choice: do you trade the certainty of the NGO hand-outs for the hard work and the increased uncertainty that comes with a paying job? The rational decision, in this case, is to stay poor and continue to rely on hand-outs. This is how people get into the "business of being poor". They're not being stupid. They're making a rational choice based on the fact that they've been given a reason not to work. But Basic Income is different, as I say -- because it is unconditional. It should never be withdrawn. If you are poor, you get the basic income. If you get a job, you still get the basic income. So there is no downside whatsoever to getting a job. This is a profound difference from traditional NGO hand-outs. In every place where an unconditional Basic Income has been experimented with, it has resulted in an (often quite significant) net increase in economic productivity. That is very different from traditional NGO hand-outs. So please don't think that they're the same thing. I'd urge you to research the subject more deeply.
- jkraker 10y ago
  My take: If institution of a basic income is not accompanied by development efforts within a population to create meaningful opportunities to work, it's not really doing what the population really needs. I don't see a difference between charity and basic income in an environment where extensive economic development is really what is needed. If I don't have an opportunity to work even if I want to work, what difference does it make what the money that is given to me is called?
  - nkoren 10y ago
    It's simple: a lot of the actual needed "work" in impoverished communities is informal. These communities are quite good at self-organising -- but barter can only get you so far. What cash grants give you is better liquidity for conducting mutually-beneficial exchanges of goods and services locally -- as well as the means of acquiring external resources for facilitating those transactions. In this context, most low-level jobs are self-creating. Higher-level jobs require a more educated populace -- but it's been shown that when a Basic Income is given, people will naturally seek out greater education -- either travelling to find it remotely, or paying for education services locally. The jobs can't be "brought in" before the populace has the education to fulfil them. One thing which Basic Income doesn't address, however, is infrastructure creation (or at least infrastructure which can't be sensibly paid for by end-user fees). So there's definitely still a need to address that, Basic Income or no. But for various reasons that should really be done by the government, rather than an NGO.
sdiq 10y ago
>The majority of voters don't pay taxes and rely on aid for everything from farm inputs to school fees. I am a Kenyan too and this is not true. Everyone pays taxes. Though a poor jobless Kenyan should not be paying income taxes, the same group of people still pay VAT for everything else they purchase, bar a few exceptional goods and services.
flubert 10y ago
>they have no idea that the government is supposed to be supporting them. >elect governments that will create sustainable wealth. Some people would say that individuals create wealth, and the governments are systems that exist because of the existing levels of wealth in a society. If you want a "generous" government, then you first need a "prosperous" society. Which governments are you thinking of that create sustainable wealth? I'm curious to get a Kenyan perspective on private property rights (i.e. do you think that is a crucial step for creating a "wealthy" society).
- crdoconnor 10y ago
  Individuals don't build highway systems, rail networks, school systems, transparent and fair courts or the myriad of other things which make countries wealthy. Africa doesn't need the American cult of the individual to develop. It needs (among other things) America to stop covertly supporting the illegal and corrupt transfers of wealth to tax havens.
amalag 10y ago
Shh, don't bust the bubble of people living in Silicon Valley who think they can solve the world's problems. It is absolutely ridiculous but they will never figure it out. People need to work, this is a nice project in East Africa: http://workingvillages.org/ http://workingvillages.org/
alecdbrooks 10y ago
Not to dismiss your experience as a resident of a country that's received significant aid, but there's substantial evidence that cash transfers work, which GiveDirectly has compiled[0], including the following benefits: —Adults more likely to work, even five years later. —Children are healthier and get more education. —Adults do not spend the extra money on things like alcohol or tobacco. —Adults make significantly more when surveyed years after receiving the cash grant. GiveWell, which has spent a lot of effort evaluating GiveDirectly, does have some lingering concerns [1] that programs like GiveDirectly's might worsen inflation or hurt people who don't receive a grant and live nearby. Research on these questions isn't conclusive, but suggests some minor, short-term effects. I suspect broadening programs to more recipients will mitigate the latter problem. [0]: https://givedirectly.org/research-on-cash-transfers https://givedirectly.org/research-on-cash-transfers [1]: http://www.givewell.org/international/technical/programs/cash-transfers#Recommendationsandconcerns http://www.givewell.org/international/technical/programs/cas... Update: Fixed formatting and added to final paragraph.

by mwambua 10y ago

dluan 10y ago

Curious what you think about more independent schemes like microfinance or loans for education. Have you noticed any difference between that and outright aid?

mwambua 10y ago
Yeah, those schemes tend to work a little better. If the recipients of mircro-financing are subject to the risks associated with taking credit, they tend to invest it better. For instance, the mobile micro-loans given by Safaricom (http://www.safaricom.co.ke/personal/m-pesa/do-more-with-m-pesa/m-shwari http://www.safaricom.co.ke/personal/m-pesa/do-more-with-m-pe...) are actually given by a bank and defaulters are black-listed for loans as little as Ksh. 500 (~ 5 USD). These schemes create opportunities whilst reminding people that poor decision-making has consequences. The only reason that this works is because these schemes are run by banks rather than non-profits. Perhaps there's a little room for more regulation around the margins these institutions should make off of these loans... but at the same time they're opening up credit lines to people who would have never had them.

skunkworks 10y ago

How are poor people supposed to find innovative solutions to their problems and elect governments that create sustainable wealth while they're steeped in desperate poverty? I believe that education is the tip of the spear, but are there any examples where a poor majority has pulled itself up by its bootstraps?

rayiner 10y ago
Most of the western world?
- nathanappere 10y ago
  (So all Kenya needs to do is create a colonial empire and exploit other countries ?)
  - patrickaljord 10y ago
    The western world was already the most advanced and richest part of the world before they started colonizing, which indeed made them even richer. Note that the people they conquered whether it were the Incas or else were also empire with colonial ambitions, except they were way less advanced.
  - MichaelBurge 10y ago
    The United States seemed prosperous enough even in its early days. Even though it had to pay taxes and such to Britain. I guess the best argument along those lines you could make is that the US depended on imported slaves.
    - colinhb 10y ago
      Also: took land and resources from native Americans and developed and exported them.
  - tormeh 10y ago
    You've got the causality wrong. Europeans exploited other peoples because European societies were more advanced. They did not become advanced because they exploited.

jlg23 10y ago

Wouldn't a basic income reduce the dependency on NGOs? If the situation in Kenya is similar to what humanitarian aid workers tell me about Haiti it's basically people joining NGO programs to make a livelihood but not planning on using learned skills or connections made to make a living independently when the project ends but rather looking for the next program. This is a sincere question, I'm fully aware that a lot of NGOs intend to do good but do more harm :(

mwambua 10y ago
You and @skunkworks both raise interesting points. I'll have to think through this some more... I have more experience with code than economic policies; but here's a first go: I have a problem with neither paying taxes, nor helping raise up the underprivileged. However, I believe that the former should facilitate the latter, rather than feeding some official's offshore account. I think that if external funding were withdrawn, then we'd see a lot more done to fairly distribute government revenue and our government would be motivated to increase that revenue by improving our balance of trade. I'm a little biased towards capitalism... so I believe in equal and opposite reactions. The developed world deserves to eat what it's worked for too. Maybe we need a little negative pressure to see that. https://www.youtube.com/watch?v=L-DgV2vixSo https://www.youtube.com/watch?v=L-DgV2vixSo

skybrian 10y ago

Assuming they spend the money, why doesn't it help the businesses who sell things to them?

tootie 10y ago

This is the inverse of what NGOs do. Put money in the hands of consumers and let them drive local markets to produce what they actually want and need.

dragonwriter 10y ago
It is actually an NGO doing this, and its not the only NGO that fits something closer to that description than its inverse.

TheMagicHorsey 10y ago

Your government is already vestigial, I'm sorry to say. Giving aid is the worst thing possible if its given to the state. But giving it to the citizens is perhaps better, because they can directly improve their lives by investing in their children, in better tools, and in things like cattle that can directly generate sustainable income. Free money won't destroy your society. It's how that free money comes into your society that is disruptive. If the money comes in top down it distorts the economy. But if its given from the bottom, then perhaps things can get better. Its not an experiment that has been tried before.

chrischen 10y ago
It's unclear what the effects of a basic income would be in an undeveloped country. For example, if a poorer country raised minimum wage too much it could destroy the economy whereas the same raise in a more developed country will have better short term effects. This could end up being unethical economic experimentation.
- StephenCanis 10y ago
  That's a bad example since raising minimum wage increases the cost of doing business. Artificially changing the cost of business inputs causes problems in the economy - not the fact that people are earning more money. Giving people money allows them to buy livestock, supplies for their children or food and shelter. This will help to improve their quality of life and spur the local economy. I'm hard pressed to see how this could be considered unethical.
- azernik 10y ago
  I think more scary is the macroeconomic effects of a large amount of cash on currencies and prices. $30m is a relatively small amount (compared to a total GDP of e.g. more than $50b for Kenya), but of concentrated in poor areas could have unintended effects.
- devishard 10y ago
  > It's unclear what the effects of a basic income would be in an undeveloped country. This is true, but given the evidence we do have (GiveDirectly's previous programs and previous basic income programs in developed countries) I see no reason to believe the effects will be anything but positive.

babayega2 10y ago

I'm Burundian in East Africa and there is a saying in my country that "free things make you stupid". NGO had been giving almost free loans to households ( $50 to $100) and some have been addicted to free stuffs and now that most NGOs have left the country, that's when we find out our true poverty : poverty starts in the head. We were stupid. But naturally, The Pareto principle [1] made that 20% of clever households acquired business minded practices and they're economically independent now. But the rest is still begging and waiting the return of NGOs. [1] : https://en.wikipedia.org/wiki/Pareto_principle https://en.wikipedia.org/wiki/Pareto_principle

MarkMc 10y ago

Here's a hypothetical question: Imagine GiveDirectly performed a rigorous randomised control trial where they found that the people who received the grant had significantly higher income after 2, 5 and 8 years compared to the control group. Would that be enough to change your mind that they are "giving people livelihoods they can't sustain"?

nkoren 10y ago

I upvoted your comment not because I agree with it, but because yours is an important voice to be participating in the discussion, and I'm glad you're here. And actually, I do agree with everything you say about how NGO money distorts the economy. But Basic Income is different, and I urge you to try to understand those differences. Traditional NGO/charity consists of giving money/stuff/services to the poor. The problem with this is that if you are a poor person who depends on that money/stuff/services, and you manage to find a job to get yourself out of poverty, then the money/stuff/services you've been depending on will no longer be available to you. This is a problem, because those NGOs are much more stable then your marginal getting-out-of-poverty job. So the person in poverty is faced with a choice: do you trade the certainty of the NGO hand-outs for the hard work and the increased uncertainty that comes with a paying job? The rational decision, in this case, is to stay poor and continue to rely on hand-outs. This is how people get into the "business of being poor". They're not being stupid. They're making a rational choice based on the fact that they've been given a reason not to work. But Basic Income is different, as I say -- because it is unconditional. It should never be withdrawn. If you are poor, you get the basic income. If you get a job, you still get the basic income. So there is no downside whatsoever to getting a job. This is a profound difference from traditional NGO hand-outs. In every place where an unconditional Basic Income has been experimented with, it has resulted in an (often quite significant) net increase in economic productivity. That is very different from traditional NGO hand-outs. So please don't think that they're the same thing. I'd urge you to research the subject more deeply.

jkraker 10y ago
My take: If institution of a basic income is not accompanied by development efforts within a population to create meaningful opportunities to work, it's not really doing what the population really needs. I don't see a difference between charity and basic income in an environment where extensive economic development is really what is needed. If I don't have an opportunity to work even if I want to work, what difference does it make what the money that is given to me is called?
- nkoren 10y ago
  It's simple: a lot of the actual needed "work" in impoverished communities is informal. These communities are quite good at self-organising -- but barter can only get you so far. What cash grants give you is better liquidity for conducting mutually-beneficial exchanges of goods and services locally -- as well as the means of acquiring external resources for facilitating those transactions. In this context, most low-level jobs are self-creating. Higher-level jobs require a more educated populace -- but it's been shown that when a Basic Income is given, people will naturally seek out greater education -- either travelling to find it remotely, or paying for education services locally. The jobs can't be "brought in" before the populace has the education to fulfil them. One thing which Basic Income doesn't address, however, is infrastructure creation (or at least infrastructure which can't be sensibly paid for by end-user fees). So there's definitely still a need to address that, Basic Income or no. But for various reasons that should really be done by the government, rather than an NGO.

sdiq 10y ago

>The majority of voters don't pay taxes and rely on aid for everything from farm inputs to school fees. I am a Kenyan too and this is not true. Everyone pays taxes. Though a poor jobless Kenyan should not be paying income taxes, the same group of people still pay VAT for everything else they purchase, bar a few exceptional goods and services.

flubert 10y ago

>they have no idea that the government is supposed to be supporting them. >elect governments that will create sustainable wealth. Some people would say that individuals create wealth, and the governments are systems that exist because of the existing levels of wealth in a society. If you want a "generous" government, then you first need a "prosperous" society. Which governments are you thinking of that create sustainable wealth? I'm curious to get a Kenyan perspective on private property rights (i.e. do you think that is a crucial step for creating a "wealthy" society).

crdoconnor 10y ago
Individuals don't build highway systems, rail networks, school systems, transparent and fair courts or the myriad of other things which make countries wealthy. Africa doesn't need the American cult of the individual to develop. It needs (among other things) America to stop covertly supporting the illegal and corrupt transfers of wealth to tax havens.

amalag 10y ago

Shh, don't bust the bubble of people living in Silicon Valley who think they can solve the world's problems. It is absolutely ridiculous but they will never figure it out. People need to work, this is a nice project in East Africa: http://workingvillages.org/ http://workingvillages.org/

alecdbrooks 10y ago

Not to dismiss your experience as a resident of a country that's received significant aid, but there's substantial evidence that cash transfers work, which GiveDirectly has compiled[0], including the following benefits: —Adults more likely to work, even five years later. —Children are healthier and get more education. —Adults do not spend the extra money on things like alcohol or tobacco. —Adults make significantly more when surveyed years after receiving the cash grant. GiveWell, which has spent a lot of effort evaluating GiveDirectly, does have some lingering concerns [1] that programs like GiveDirectly's might worsen inflation or hurt people who don't receive a grant and live nearby. Research on these questions isn't conclusive, but suggests some minor, short-term effects. I suspect broadening programs to more recipients will mitigate the latter problem. [0]: https://givedirectly.org/research-on-cash-transfers https://givedirectly.org/research-on-cash-transfers [1]: http://www.givewell.org/international/technical/programs/cash-transfers#Recommendationsandconcerns http://www.givewell.org/international/technical/programs/cas... Update: Fixed formatting and added to final paragraph.