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In addition... <blockquote>To get the cash, applicants had to form a group with others in their village and submit a proposal showing how they planned to use t

In addition... <blockquote>To get the cash, applicants had to form a group with others in their village and submit a proposal showing how they planned to use the money</blockquote> It's not clear how selective they were, but it does sound more involved than just "fill out this form and get your cash." So it's a group of people that were selected, or at least self-selected, for some minimum amount of initiative and ambition. The title of the article invites comparisons to social safety net programs in the developed world, but this sounds more like a combination of the educational and small business grant programs. It also seems like it would not be broadly applicable - you couldn't just carpet an area with $400 grants and expect the same kind of success rate.

ma2rten 13y ago
In addition... The simple fact that someone came after those people to check what they did with their money, for the purpose of the research, probably influenced the result (at least if they knew or suspected that beforehand). If they said they would use the money for business, but then instead spend it alcohol and gambling, that would be very embarrassing. If on the other hand, a program like exists this for a long time and everyone knows nobody will check what you do with the money, abuse would become very likely, imo.
- waps 13y ago
  I think you've just hit the nail on the head. Gifts in this program have the same function as loans would traditionally have : they are supposed to be invested in improving one's life. They were obviously not free, the money was traded for promises that carry a social cost if one doesn't deliver. A basic income would have no such effect. If it's enough to live on, why would everyone invest it in becoming a better and more capable individual ? (note the question is not "anyone", but "everyone". The aggregate effect of free money is what will determine the outcome. Not what exceptional individuals might achieve with it, but what a lazy drunkard would achieve with it matters)
  - klenwell 13y ago
    Ah yes, the undeserving poor. Alfred P. Doolittle gave a pretty good accounting of what they might do with it in Shaw's Pygmalion: I ask you, what am I? I'm one of the undeserving poor: that's what I am. Think of what that means to a man. It means that he's up agen middle class morality all the time. If there's anything going, and I put in for a bit of it, it's always the same story: "You're undeserving; so you can't have it." But my needs is as great as the most deserving widow's that ever got money out of six different charities in one week for the death of the same husband. I don't need less than a deserving man: I need more. I don't eat less hearty than him; and I drink a lot more. I want a bit of amusement, cause I'm a thinking man. I want cheerfulness and a song and a band when I feel low. Well, they charge me just the same for everything as they charge the deserving. What is middle class morality? Just an excuse for never giving me anything... Don't you be afraid that I'll save it and spare it and live idle on it. There won't be a penny of it left by Monday: I'll have to go to work same as if I'd never had it. It won't pauperize me, you bet. Just one good spree for myself and the missus, giving pleasure to ourselves and employment to others, and satisfaction to you to think it's not been throwed away. You couldn't spend it better.
  - karlmdavis 13y ago
    Don't this: > The aggregate effect of free money is what will determine the outcome. And this: > Not what exceptional individuals might achieve with it, but what a lazy drunkard would achieve with it matters) Contradict each other? The "aggregate effect" = "lazy drunkards" + the effect of "exceptional individuals" + the effect of everyone else. So it really isn't the lazy drunkards that matter; it's the overall effect that does. If, on average, it improves society then isn't that a win? Very often, when talking about basic incomes and similar programs, people seem to say things like "twice as many people will take advantage of the system and be lazy." To me, that's not a sufficient criticism: it all depends on the percentages. If a program increases the percentage of bottom feeders from 1% to 2%, say, but also doubles the quality of life of everyone else, that would be a huge win to me. Obviously, the numbers I chose in my example are probably unrealistic, which just further illustrates how important it is to actually determine what the numbers are/will be.
    - 13y ago
- notahacker 13y ago
  Absolutely. The problem with these kind of studies is how difficult it is to generalise from them. One of the cited examples concludes making people accountable for the money was less efficient even though accountable people spent the money better because it cost "up to $1800" per $150 loan for followup studies. That hires a well-educated person for a year in a developing country, which strongly suggests that you'd reach a wholly different conclusion if the programme was designed and administered 100% locally. Of course, there's also the issue that if a particular group doesn't have any followup studies associated with the research, then observations of how they spent the money are inevitably less accurate. Then there's the simple observation that repayable grants can be passed on to others (less admin costs) and are sustainable on a larger scale in an economy. Teach a man to fish and his interest repayments can teach his neighbours to fish, provided those neighbours also reasonably expect to get a positive return on the rod they invest in. That latter bit is important in assuming the net effect doesn't involve very expensive fishing rods and depleted fish stocks... Whilst loan based aid is not unproblematic (there's some hideously expensive administration and profiteering in some microfinance problems, and poor people many people do use them as expensive consumer loans) the same technology that earns Kenyan grants such rave reviews for their effectiveness can also be applied to strings-attached microfinance: M-PESA can potentially cut the cost of receiving microloan repayments even more effectively than it cuts corruption in doling out the aid. Just because the desperately poor don't spend all their grant money on prostitutes and alcohol (which isn't that surprising if you've ever visited a developing country) doesn't necessarily mean they can't be efficiency helped in other ways
Freeboots 13y ago
The selection process is usually along the lines of 'the poorest of the poor'. Organizations such as this identify an area or ethnic group, then a village, then a family. The recipients are selected, then approached, in such a way that minimizes self selection. The idea is to bring a poor family up to the standard of their slightly less poor neighbours. Then the village up to the standard of other villages. then the province. etc. I personally dont see the invited comparison, at least not directly in the title, given the context of a 'Global Impact' article. This could be simply my lens, and yours. I work in development field (mostly cambodia), so i automatically apply it to what i see here. You seem more involved with the situation in US(?) an rightly say that it would not apply in the same way.

ma2rten 13y ago

In addition... The simple fact that someone came after those people to check what they did with their money, for the purpose of the research, probably influenced the result (at least if they knew or suspected that beforehand). If they said they would use the money for business, but then instead spend it alcohol and gambling, that would be very embarrassing. If on the other hand, a program like exists this for a long time and everyone knows nobody will check what you do with the money, abuse would become very likely, imo.

waps 13y ago
I think you've just hit the nail on the head. Gifts in this program have the same function as loans would traditionally have : they are supposed to be invested in improving one's life. They were obviously not free, the money was traded for promises that carry a social cost if one doesn't deliver. A basic income would have no such effect. If it's enough to live on, why would everyone invest it in becoming a better and more capable individual ? (note the question is not "anyone", but "everyone". The aggregate effect of free money is what will determine the outcome. Not what exceptional individuals might achieve with it, but what a lazy drunkard would achieve with it matters)
- klenwell 13y ago
  Ah yes, the undeserving poor. Alfred P. Doolittle gave a pretty good accounting of what they might do with it in Shaw's Pygmalion: I ask you, what am I? I'm one of the undeserving poor: that's what I am. Think of what that means to a man. It means that he's up agen middle class morality all the time. If there's anything going, and I put in for a bit of it, it's always the same story: "You're undeserving; so you can't have it." But my needs is as great as the most deserving widow's that ever got money out of six different charities in one week for the death of the same husband. I don't need less than a deserving man: I need more. I don't eat less hearty than him; and I drink a lot more. I want a bit of amusement, cause I'm a thinking man. I want cheerfulness and a song and a band when I feel low. Well, they charge me just the same for everything as they charge the deserving. What is middle class morality? Just an excuse for never giving me anything... Don't you be afraid that I'll save it and spare it and live idle on it. There won't be a penny of it left by Monday: I'll have to go to work same as if I'd never had it. It won't pauperize me, you bet. Just one good spree for myself and the missus, giving pleasure to ourselves and employment to others, and satisfaction to you to think it's not been throwed away. You couldn't spend it better.
- karlmdavis 13y ago
  Don't this: > The aggregate effect of free money is what will determine the outcome. And this: > Not what exceptional individuals might achieve with it, but what a lazy drunkard would achieve with it matters) Contradict each other? The "aggregate effect" = "lazy drunkards" + the effect of "exceptional individuals" + the effect of everyone else. So it really isn't the lazy drunkards that matter; it's the overall effect that does. If, on average, it improves society then isn't that a win? Very often, when talking about basic incomes and similar programs, people seem to say things like "twice as many people will take advantage of the system and be lazy." To me, that's not a sufficient criticism: it all depends on the percentages. If a program increases the percentage of bottom feeders from 1% to 2%, say, but also doubles the quality of life of everyone else, that would be a huge win to me. Obviously, the numbers I chose in my example are probably unrealistic, which just further illustrates how important it is to actually determine what the numbers are/will be.
  - 13y ago
notahacker 13y ago
Absolutely. The problem with these kind of studies is how difficult it is to generalise from them. One of the cited examples concludes making people accountable for the money was less efficient even though accountable people spent the money better because it cost "up to $1800" per $150 loan for followup studies. That hires a well-educated person for a year in a developing country, which strongly suggests that you'd reach a wholly different conclusion if the programme was designed and administered 100% locally. Of course, there's also the issue that if a particular group doesn't have any followup studies associated with the research, then observations of how they spent the money are inevitably less accurate. Then there's the simple observation that repayable grants can be passed on to others (less admin costs) and are sustainable on a larger scale in an economy. Teach a man to fish and his interest repayments can teach his neighbours to fish, provided those neighbours also reasonably expect to get a positive return on the rod they invest in. That latter bit is important in assuming the net effect doesn't involve very expensive fishing rods and depleted fish stocks... Whilst loan based aid is not unproblematic (there's some hideously expensive administration and profiteering in some microfinance problems, and poor people many people do use them as expensive consumer loans) the same technology that earns Kenyan grants such rave reviews for their effectiveness can also be applied to strings-attached microfinance: M-PESA can potentially cut the cost of receiving microloan repayments even more effectively than it cuts corruption in doling out the aid. Just because the desperately poor don't spend all their grant money on prostitutes and alcohol (which isn't that surprising if you've ever visited a developing country) doesn't necessarily mean they can't be efficiency helped in other ways

Freeboots 13y ago

The selection process is usually along the lines of 'the poorest of the poor'. Organizations such as this identify an area or ethnic group, then a village, then a family. The recipients are selected, then approached, in such a way that minimizes self selection. The idea is to bring a poor family up to the standard of their slightly less poor neighbours. Then the village up to the standard of other villages. then the province. etc. I personally dont see the invited comparison, at least not directly in the title, given the context of a 'Global Impact' article. This could be simply my lens, and yours. I work in development field (mostly cambodia), so i automatically apply it to what i see here. You seem more involved with the situation in US(?) an rightly say that it would not apply in the same way.