11 ms·
Giving money directly to poor people (2013)
- suff 9y agoPerhaps not, but the rate of waste is 10x lower than distributing it through a government agency.
- eutectic 9y ago[citation needed]
- bjelkeman-again 9y agoI work in international development. It is not unusual for up to seven agencies/organisations to be between the contributor of the money and the beneficiary. Example: Citizen pays tax -> 1) Tax office -> 2) Ministry of foreign affairs -> 3) Large INGO -> 4) Local office -> 5) Builder -> 6) School - 7) Pupil It is a simplistic example. There are overheads and most often really burdensome reporting requirements at every level. If there was a 15% overhead at every level, about 32% of the money actually arrives. It is better in many cases, but often not. Not 10x as argued, but an issue nevertheless. Unfortunately it is really hard to do meaningful interventions at scale without these overheads imho. The context is often very hard to operate in. Channeling a portion of the aid directly would certainly help imho.
- ghostcluster 9y agowhen robotic physical labor and the cognitive tasks capable by automated software eliminates the ability for the bottom 50, 60, 80% of the population to compete economically, what's going to happen? simply handing out money might have broader negative unforseen consequences with regard to incentives (witness the prescription oxycontin and heroin epidemic in the rust belt), but of course, doing nothing might be worse.
- quickthrower2 9y agoThis would be more of a problem in a developed country, right? Sounds like these people are closer to self sufficiently, i.e. farming, foraging, building a roof for $40 etc. Where as in developed countries, with the cost of housing and without a job it will be tight. We'd need to helicopter some money, taxed from that automation, IMHO.
- ghostcluster 9y agobut the social incentives are the problem. my understanding is that a lot of the oxycontin epidemic stems from the lack of purpose many people have in their lives without the identity of a job as a role in society. people collecting disability benefits and developing a drug habit as a way of escaping from it temporarily. if we just broaden the handouts from taxes on the large corporate winners, couldn't that make this problem worse? unless there's something else driving it.
- jarfil 9y agoHaving a job is not the only source of purpose there is. Handing out money may not be an incentive to work harder, but it can let those people look for different ways of achieving satisfaction other than just getting high. People with no money tend to think they need to use any money they get ASAP on fast rewards, only when they have enough money to save do they start thinking about saving any at all. Of course this will hardly work to get those already addicted to change their ways overnight, but some long term financial stability can change the worldview of new generations so they plan for their own future instead of living like they were to die tomorrow.
- ghostcluster 9y ago> Handing out money may not be an incentive to work harder, but it can let those people look for different ways of achieving satisfaction other than just getting high. The problem is we already do this in the US, and we've seen the concurrent rise of a new drug epidemic arise alongside it among the same demographic who are receiving disability.
- bo1024 9y agoThe subtitle doesn't match the article's content at all! Bizarre. The article compares two ways to give money directly to poor people: unconditionally, or with conditions such as their children must attend school regularly. It gives some arguments that the conditional approach is preferable because it addresses "deeper" or generational causes of poverty.
- Already__Taken 9y agoSeems daft, It's already illegal not to send your kids to school. The problem with conditions is it seems to turn into some kind of punishment and usually doesn't account for nuance.
- exolymph 9y ago> It's already illegal not to send your kids to school. In every single country?
- pbhjpbhj 9y agoIf the government where you are doesn't know you have kids, and the kids are working to help feed the family, then you almost certainly don't care if it is illegal. If you get money commensurate with what the kids could earn/provide then it makes a big difference. FWIW it's not illegal in the UK to keep your kids at home, the Education Act simply requires you ensure they have provision of an education.
- fpoling 9y agoThere is no proven link that education helps people to get out of poverty. 60 years ago in many African countries the average education was higher than, say, in South Korea. Yet it did not help with economic growth at all. What it seems certain is that the level of education is a consequence of country wealth, not a cause of it. I.e a richer country can afford for kinds to stay in education longer. The book "The Tyranny of Experts" by William Easterly shows rather convincingly that it is luck of fairness or even basic respect that makes population poor, not the amount of money or education.
- pw 9y agoFunny to see this just after I submitted: Ask HN: Would you donate directly to poor Kenyans? (https://news.ycombinator.com/item?id=16890224 https://news.ycombinator.com/item?id=16890224)
- RobinL 9y agoYou can find discussion of the latest evidence here: https://givedirectly.org/blog-post?id=8949137018980120769 https://givedirectly.org/blog-post?id=8949137018980120769 I'm a trustee of the UK partner organisation. One of the reasons I was attracted to GiveDirectly in the first place was their commitment to robust evaluation and transparency. This is a good introduction: https://www.ted.com/talks/joy_sun_should_you_donate_differently https://www.ted.com/talks/joy_sun_should_you_donate_differen...
- anovikov 9y agoIn addition to many valid comments here, i have to add that these things will work only as long as they are applied to a tiny minority of population. In essence, there won't be so many ways to invest the $500 to make $90 a month, as mentioned in the article. When a tiny fraction of people get that money, they benefit. When everyone will, there won't be much to invest it into - just to spend, and poor will remain poor, because being poor is a matter of class, not money (something which is a no-brainer for Brits to understand, for example). It's not about what you do or even what you have, but of who you are. Sadly, there is almost no way to change it with $1000, or even $100,000.
- deleted 9y ago[deleted]
- erpellan 9y agoA lot of the objections to direct giving seem to coalesce to: "But [some non-zero percentage] will just blow the cash on drugs and sex. So nobody should get anything!"
- johnchristopher 9y agoAnd then it descends into a bar conversation about incentives, macro-economics, game theory until someone stumbles over the drinks mumbling "but the AI and self driving cars" while the waitress is hoping HN drunks are gonna tip enough to compensate for the low wage industry she's trapped in.
- mcny 9y agoThere are some things like infrastructure that probably makes sense to centralize such as transportation or telecommunication. I think it still makes sense to run these things paid for by the government as opposed to people voting with cash. However, I might be wrong. There are real limits to how much money we have. So a question like do we spend on a local transit subway system are difficult because there is so much politics. Even trying to get the F train go express in Brooklyn had so much opposition. When I read the article headline I thought of course cash does not solve everything. We still need roads and bridges and fiber optic cables. However, if the period have the cash maybe they can decide for themselves what they want to prioritize. Too bad we can't have a single tax system around the world so we could hand the same tax brackets around the world. That would make it so much easier to raise taxes on the top bracket without worrying about money fleeing the jurisdiction and we'd be able to fund things like a basic income.
- lopmotr 9y ago> without worrying about money fleeing the jurisdiction and we'd be able to fund things like ... That's a terrible idea. Freedom to leave is a powerful force to keep governments from going too far out of control. North Korea is horrible to its people so it has to lock them in. You're effectively wanting the same thing but for everyone. America has important things to attract value producers so that they'll tolerate paying the tax because they're still better off than trying to earn money in some worse country despite lower taxes. It's up to the government to squeeze as much out of them as it can without losing them.
- hekfu 9y ago> > without worrying about money fleeing the jurisdiction and we'd be able to fund things like ... > North Korea is horrible to its people so it has to lock them in. You're effectively wanting the same thing but for everyone. It would be nice if people paid taxes for the infrastructure that enables businesses worldwide,but that would turn us into north Korea? What? North Korea isn't horrible because of taxes friend (in fact, most of the most horrible places on earth have an official tax of zero, you just need to bribe everyone) What flawed logic enables this? >America has important things to attract value producers so that they'll tolerate paying the tax because they're still better off than trying to earn money in some worse country despite lower taxes. It's up to the government to squeeze as much out of them as it can without losing them. Ah, randian ideas of value producers and moochers, instead of participants in a society and economy. I see
- aaron695 9y ago(2013) The data surely must be better by now.
- nimish 9y agoI don't see why giving poor people direct cash transfers requires 100% effectiveness when giving wealthy people tax cuts on the off-chance it will trickle down is considered dogma.
- koboll 9y agoNo one considers that dogma. No one even takes it seriously. It's a smokescreen for returning big donors' investment in political campaigns, and for the belief that corporate profits inflate the economy.
- nimish 9y agoNo one considers it? Did you miss the giant tax code overhaul that was based on this? It's economic orthodoxy in the US government and corporate sector.
- akvadrako 9y agoI thought The Economist was explicit in their support of free markets. How does that jive with the government micro-managing people's finances?
- DoreenMichele 9y agoThe article is not about the government micro-managing people's finances. And giving away money with some strings attached is perfectly compatible with being pro free market if those strings help create the human capital and other capital out of which thriving free markets grow.
- DoreenMichele 9y agoI thought this was going to be another UBI article. Pleasantly surprised to see data on CCT and UCT programs, but somewhat frustrated that this basically is an article about what works in less developed countries. It doesn't appear to really have lessons for the US. In the US, there is plenty of capital and infrastructure. Nonetheless, there are systemic problems that make poverty excessively hard to escape. One of those is the general dearth of affordable housing* in the country. This is worse in some places than others, but it is a problem everywhere. A second issue is that jobs are moving to big cities. More affordable small towns are being gutted. This means people can go where the jobs are and face a high cost of living, or go where things are cheap, yet still be unable to earn enough due to lack of earning opportunities. I think we have a potential solution available: Remote work and online earning opportunities. But one problem I see is that people in big cities are more likely to be clued in about such. Small towns and rural areas seem to be into Facebook and not terribly internet savvy. I think if we can make a concerted effort to increase the supply of affordable housing and also work on finding ways to help Americans outside of big cities to get more savvy about using the internet to improve their bottom line, we don't need to continue to live in fear of some dystopian future where robots have all our jobs and UBI seems like our only hope. * https://www.geekwire.com/2018/every-100-families-living-poverty-west-coast-no-30-affordable-homes/ https://www.geekwire.com/2018/every-100-families-living-pove...
- LMYahooTFY 9y agoThe title is quite awful buzzword bilge IMO. There are very obvious depravations suffered by impoverished people and those things all have literal price tags. This requires zero critical thought by anyone on HN. What conditional and unconditional handouts demonstrate is the in the same vein as other social problems we face: Do we offer people the freedom to choose a path and possibly take a bad one? Or do we block all paths but the one we're pretty sure is 'the correct one'?
- DoreenMichele 9y agoI don't see why we can't do both. I would like to see some attempts to help people find a good path forward, and some attempts to just be generous and kind hearted. I met a man recently who told me he was once within a day of being homeless. His last day in housing, having not paid his mortgage in months due to a serious back injury, he ran into someone who knew him who offered to not only get his mortgage caught up, but keep paying it while he recuperated until he was able to return to work. One of the big differences between The Haves and The Have Nots is The Haves frequently had access to resources even when something had gone terribly wrong in their lives. The Have Nots either never had access to such resources or the resources ran out before their level of need was met. That man was able to rebuild his life. How many homeless people could rebuild their lives if someone was willing to gift them many months of rent? Most people on the street will simply never see that level of generosity. And then we blame them for failing, not recognizing that others are doing better not due to personal virtues per se, but simply good fortune or kindness done to them.
- deleted 9y ago[deleted]
- throw2016 9y agoThe language of 'poor people' and 'giving' is loaded with assumptions. For instance why is somebody poor and others not? Why do some get access to a stable wholesome upbringing while others have to struggle with access to basics? We can't make claims of equality when things seem distinctly unfair for those born into poverty and the intense struggle and suffering they have to endure to survive for no fault of theirs. Access to quality food, a stable environment, learning resources, good education in the early years are critical for future success. We know how important these things are for middle class and rich families when it comes to their kids and future outcomes. But how is someone born in poverty supposed to get this? And we aren't even talking about things like networks and connections. For those lucky enough not to endure those conditions there is an unfortunate affinity among some to make glib comments about poor people, 'hard work' or social mobility that gloss over the advantages received and fail to comprehend how debilitating poverty is. Poverty itself is hard work, access to basics are 10x harder. Social mobility and easier opportunities from the 1950 that could help build fairer societies are disappearing in the 80s.[1][2][3] The whole point of society is to ensure all brains are properly utilized and people do not simply suffer due to an accident of birth. These are serious structural problems that need serious solutions not talk of 'giving'. [1] http://www.sgi-network.org/docs/studies/SGI11_Social_Justice_OECD.pdf http://www.sgi-network.org/docs/studies/SGI11_Social_Justice... [2] https://www.theatlantic.com/business/archive/2016/07/social-mobility-america/491240/ https://www.theatlantic.com/business/archive/2016/07/social-... [3] https://www.weforum.org/agenda/2016/10/us-social-mobility-might-be-even-worse-than-you-thought https://www.weforum.org/agenda/2016/10/us-social-mobility-mi...
- stephengillie 9y agoEssentially, this is paying people to take care of themselves, benefit themselves, and benefit society. A form of "trickle-up economics", if you will. This adds to the value they receive back from society for improving themselves and their situation. It's reminiscent of EIC in the USA. This may be the best distribution method for this sort of funding. Now the only question is the same as UBI - who funds it? Why is this tested in Kenya instead of Detroit or Wyoming? Is it because the daily income of a Kenyan is a rounding-error to an American? That won't scale.