If you find this persuasive, consider donating to http://www.givedirectly.org/, which performs unconditional cash transfers to the poorest people in Kenya.
Give Directly is the subject of this writeup[1] on GiveWell, and this excellent episode[2] of This American Life.
More from one of cjbprime's sources: GiveWell does a lot of evaluation of charities, trying to find where an individual donor's dollar can make the most difference. They hold donations to GiveDirectly to a pretty high standard, comparing it against stuff like antimalarial bednets and deworming, and think it comes out looking alright. In addition to cjbprime's link, they've written:
2) The Case For Cash--posted after their recommendation of GiveDirectly, talking about how a one-time cash transfer can have long-term benefits and how giving to the third-world poor differs from giving to the U.S. poor: http://blog.givewell.org/2012/12/26/the-case-for-cash-2/
They produce a lot of thoughtful research with a lot of effort to ground their recommendations in reality--browsing around their site a bit is a pretty rewarding use of time if you're interested in this kind of thing.
> They hold donations to GiveDirectly to a pretty high standard, comparing it against stuff like antimalarial bednets and deworming, and think it comes out looking alright.
There's this line of reasoning (coming from African economists that have spoken out against the latter two forms of aid[1]) that if you give the poor money, they can spend it on antimalarial bednets and deworming themselves, which is is effectively the same as the former but with the added benefit of bootstrapping the local economy (provided the facilities are there of course, but that is more likely to develop if the local population has money...).
Of course that's a gross oversimplification of a complicated problem, but it's an interesting counterpoint to traditional forms of aid.
I think there are a couple of general reasons bednets or deworming (and vaccines) are still good things to deliver via aid program rather than sell, without taking away from the awesomeness of GiveDirectly. (And I know you're saying you know such reasons might exist, but I think it's worthwhile to go into them:)
One is logistics: a program to reach everybody unlocks some economies of scale. Much of the cost of these programs is just getting supplies and people to all of these remote villages with impassable roads, the occasional corrupt official or militia, etc.[1] Some of that is effectively fixed cost, and doesn't vary much whether you have two boxes of deworming pills in the back of your truck or 20. The cost per person is lower if you can amortize those fixed costs across everyone.
The other is that sometimes active encouragement is worth it. Even rich countries have policies to try and get folks to vaccinate and for other health goals like getting people off cigarettes or fighting obesity. In poor countries there are two further reasons a push could help: there's not enough accurate, trusted medical info (not even high school bio for everyone; that's part of how "traditional healers" survive), and the cost of a vaccine feels a lot higher.[2]
All that said, I get the frustration that there are so many big problems aid like this _doesn't_ directly help with. There's partly just a problem of scale--you need a lot more resources (whether investment or aid or what) to deal with the lack of infrastructure, etc. But I do think in the meantime, the science and to some extent plain old arithmetic indicate that basic health programs are still doing a ton of good.
[1] Digression, but if you want to read about what it's like to take the long way to a remote old tin mining town in the DRC, http://www.amazon.com/dp/1851689656/ is amazing
PM also followed an American building contractor who was attempting to build a schoolhouse in Haiti. The guy landed in the country pretty gung-ho, ready to apply his extensive experience to building something relatively simple. He had never done aidwork in a developing country. After many delays and run-ins with corruption, he did manage to complete it, but he concluded that just giving them money would have been more efficient.
I might step on a few people's politically correct toes for saying this, but based on my experience with traveling through Africa I'd say that the richer people think you are, the more corruption you have to deal with, and that the "whiter" you look, the richer people presume you are.
(And if we're performing a comparison, neither do other developed countries compared to the people being targeted by Give Directly's program. We should give to wherever it will do the most good, right?)
> We should give to wherever it will do the most good, right?
It's not obvious that the welfare of Kenyans is more important than, for example, the welfare of Americans or Swiss.
> Switzerland doesn't need the money
I don't know much about Switzerland but the same sort of rationale could be used for directing charitable donations to Africa instead of America. Meanwhile, a lot of people in the United States suffer in various ways. The "that country has so much money that people there certainly don't need any donations" line of thought is very obviously wrong.
What's the phrase? "One man's modus ponens is another man's modus tollens."
Yes, I do think it's an obvious logical implication of the above that if you want to donate to where it will have the largest impact on welfare, you should be donating to Africa instead of the US. As a result, I live in the US and do donate to effective aid organizations that aim to help people in extreme poverty, who are usually in Africa. I don't think there's anything very obviously wrong with this.
Since you couldn't be bothered to read the article before leaving what must apparently be a wisecrack: it was a controlled experiment using groups.
> Blattman, an assistant professor of international and public affairs and political science, recently completed a four-year study of a government-run program in northern Uganda that gave cash to groups of young people so they could learn a trade and start their own businesses. The results surprised him and convinced him that outright grants are the best way to give aid.
> The program, funded by a loan from the World Bank, was designed to boost the Ugandan economy after 20 years of civil strife by encouraging young people—ages 16 to 35—to move from agriculture to skilled trades. The grants were only about $400 per person, the equivalent of a year’s income for most people in the area. 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, but there was no follow-up to make sure they used it for that purpose.
> Grant recipients became carpenters, metal workers, tailors and hair stylists. Some of the money—about 10 to 20 percent—went for training, either at an institute or as an apprentice to a local artisan, but most of it was used to purchase tools and raw materials. Some of those small businesses grew large enough to hire paid employees, improving the economic situation in an entire village.
My only point is that to me, giving cash to Kenyans and giving cash to beggars seems morally equivalent. Not saying you shouldn't do either but I do think if you give Kenyans cash but have qualms with giving beggars money, well I don't think that makes much sense.
I believe there are people with the necessary character to be economically successful, but who have never had the economic opportunity to move beyond their basic needs and are therefore poor. I also believe there are people who have had many economic opportunities, but have squandered them, and are therefore poor.
In the context of the adage "give a man a fish and he'll be fed for a day, teach him to fish and he'll be fed for life," one can expect cash given to the first group to be spent on fishing rods, while cash given to the second to be spent on fish.
I find giving cash to the first group to be morally different than giving cash to the second group, and I suspect that poor Kenyan villagers are likely to belong to the first group, while beggars in wealthy developed countries are likely to belong to the second.
If giving $20 to a Kenyan does more good, and you think the most moral thing is to direct your efforts where they do the most good, then there's how they're not morally equivalent.
Not really. Giving beggars has the side effect of incentivising begging, which many people would not consider to be a morally neutral decision.
One can also reasonably judge that on the balance of probability, aid money will almost certainly have a significant positive effect on the lives of Kenyans. The effect of a comparable amount of cash on the lives of beggars in Western countries is much less unequivocally positive (potentially a net negative if its spent on substances that harm the beggar's health, or the income disincentives them from seeking programs that aim to help them with more than just their next meal)
Most people measure morality by looking at the difference between consequences as a result of Action X or Action Y. It's fairly obvious that giving $20 to someone making $1/day is likely to have better consequences than giving it to someone making $40/day (or who has more than the purchasing power of $40/day of social aid available to them). That's why we say the actions are morally different.
I'm surprised you think there's no moral difference. There would be a moral difference between saving someone's life with $20 and treating someone to a meal at Starbucks for $20, right?
Morally they're equivalent, but practically they're not.
While I would like those beggars to receive money, I don't want them to be the exclusive recipients of cash aid, excluding the many poor people who don't happen to be actually begging on the street. I want an organized program that takes the available cash (donations or taxes) and distributes it in a "fair" way among the poor. What constitutes fair is difficult to answer, but I certainly don't have enough information available to make that decision right when someone asks me for money.
No, the opposite. Give Directly finds the very poorest people in a village (as judged by the materials their house is made from), and the Uganda study used self-selected entrepreneurs. Both of these were trying to maximize the impact of each dollar by giving the money to the people for whom it would do the most good.
Giving money to a beggar in the US would not do nearly as much good, both because the US has excellent safety nets (hospitals that will treat you, food banks) and because everything in the US costs more (so you can provide less of it to someone in need per dollar).
Various reasons - first of all - in the developed world there are social safety networks that should take care of the less fortunate. So a beggar on the street means my government has failed.
Second - begging is lucrative industry in parts of the world.
Third poor != beggar. The people that they gave money to were poor but were also young, employed (in agriculture) and integrated into society.
I think the context is super important here. "gave cash to groups of young people so they could learn a trade and start their own businesses." In Uganda.
These people were pretty much starving before.
“These were mostly farmers who had work 10 to 20 hours a week and earned about $1 a day,"
With different people, culture, attitudes, environment the effect might be completely different in America, for example.
<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.
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.
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
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)
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.
> 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.
You're right. That was wrong. I obviously meant it's the effect of A plus B.
It would depend on the amount of "bottom feeders". That's a bad way to define it though, "non-productives" might be better, since it would include pensioners, children, students (including people who go back to studying if this program is introduced, but are older than 0-24 years), really ill people, ... mostly not people I'd define as bottom feeders.
I would say that it's a lot larger than 1-2%. Let's assume that a lower bound on the non-productive people would be 30% of the total (which would mean tax levels need to be, at bare minimum . I would say that various factors are going to make that close to 50% over a period of time that's not very long.
Suppose you'd have the same tax level for these things as you currently have for social programs + medical programs (~50% of total taxes), then here's how much it could be (ignoring administration costs, which would take another bite):
Non-active population => basic income possible using 50% of govt. budget
30% => 11,249
40% => 9,642
50% => 8,035
60% => 6,428
70% => 4,821
(the current labor force participation rate is 65%. Since that is likely to drop, prudence would suggest you take the 50% or 60% figure as realistic. Increases in the govt. budget dedicated to this cannot make these numbers rise by a significant amount. So I would think the 30% figure is the maximum attainable even if the military were to be defunded)
Since even the largest of these numbers is only barely sufficient to live + insurance + ... is this really worth it ? This amount is not of the level that it's going to do what this program needs to do to improve our economic situation : give the poor disposable income.
The basic problem we have is of a different nature. We do not have any economic reason for 70% of the world population to be alive, and that number is growing fast. In the US that number is currently amazingly low, but it's bound to rise as well.
> It would depend on the amount of "bottom feeders". That's a bad way to define it though, "non-productives" might be better, since it would include pensioners, children, students (including people who go back to studying if this program is introduced, but are older than 0-24 years), really ill people, ... mostly not people I'd define as bottom feeders.
You're absolutely right, thanks for the correction.
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.
Context is definitely relevant. In 1832, Georgia held a lottery to allocate all of its unclaimed land. Almost everyone in the state participated. The value of each parcel of land was immense, life-changing for most of the people in the lottery.
(To be fair, educational attainment and lifetime earnings of offspring are a different measure of success though, so that probably accounts for some of the discrepancy in the results as well.)
> Umm, I seriously doubt that "almost everyone" in the state of Georgia in 1832
Touche. My point was that participation was extensive and varied. It remains to be seen whether or not this effect holds for women or minorities, but even if it didn't, that would only support my main point: context matters.
> A small event known in the US as the Civil War... just might have had something to do with this.
The authors address the Civil War in the piece. It would indeed have been a weird oversight for economic historians studying the pre-war South if they hadn't, if that just never occurred to them as relevant.
I don't think it's that different from the situation we have here in America. A lot of people are working low-wage dead-end jobs because they their kids or siblings need to eat. With only a little bit of extra money those people could stop working their jobs, learn new skills, and get better jobs.
Of course it's incredibly different. I won't trivialize how shitty life in the ghetto is if you don't trivialize how shitty life as a subsistence farmer surrounded by simmering ethnic conflicts.
Yes, but the starving child in Boston in your article went to a nearby world-class hospital where he was given free food.
Poverty exists in the US; extreme poverty (living under the purchasing power equivalent of USD $1.25 per day) is extremely rare (<0.5%) in the US, whereas it describes 50% of people in subsaharan Africa.
Im not sure if you're taking purchasing power into account, but if not, be aware that US$1 a day is doable in many countries, but very much not in america. Poverty is relative, just saying.
And for what its worth, i live in cambodia and have lived on such a budget, albeit only for 3 months.
That seems like a reasonable definition of "extremely rare". Platinum is extremely rare, several hundred tons of it are mined every year. (A number that sounds incredibly heavy, but pales in comparison to the numbers of common metals.)
Half a percentage is "extremely rare" compared to numbers like 50%. Most people in America have absolutely no experience with the sort of poverty that is nearly inescapable in many underdeveloped counties.
If you can't get over the "~1.5 million” thing, just consider that this is comparable to the poplulation of The Bronx.
How can that number be true if food stamp benefits net roughly $200, and earned income tax credit is $487 for a single person? Both numbers go up significantly if children are involved.
Sorry, your first world starvationhas nothing to do with the thurd world poverty you have probably never seen in your life. Stop spreading myths or half truths and get out and see for yourself what i amtalking about.
Then you should know enough to see the difference between the poverty these and back in the US. In some of the countries you mentioned some people die because they are poor. In the US, you usually don't die of that poverty. You don't live very well, you struggle to make a living and to eat well, but you don't just disappear and die like that.
At what point does it count as starving? When they don't eat for a week at the end of the month so they can make rent? When they have chronic malnourishment? When they manage to live by visiting food banks or soup kitchens? When they dumpster-dive for discarded food? All this happens in America.
ikr, people in this thread seem to be reading this into the context of the 'living wage' idea floating around. But its nothing like that. These are one off grants to people living in completely different circumstances. In developing countries whose governments are not able to provide basics most developed countries take for granted.
The living wage is an income, not a one off. And its being talked about in terms of developed countries whose government would distribute said income.
The difference is easy to see when you consider what you would do in each situation.
Situation A) You are given 6 months pay to increase your standard of living. Many/most people would invest such a windfall. They would pay debts, buy land, stocks. Many would treat themselves to a nice car or something, but i dont think people who NEED that money would do so.
Situation B) You are told that from now on you will get $1000/m. Forever. Welp. Im going to cut my hours and go for a drink. Again, many people would treat this as a windfall to be saved. But some (more than situation A) would spend it, knowing they will get more next month.
Not necessarily. The accompanying effects (things like the impact on the standard of living, cumulative expenses for the employer) may actually make their situation worse. If their employer must have the role fulfilled, then their costs increase which means decisions such as raising the price of the good/service, reducing operational costs (lower quality, or fewer workers), outsourcing, etc.
I'm all for people being paid a fair wage, but just think that a solution that focuses on one symptom may only make things worse. I think that the real problem is that, for the most part, the economy is so sick that decision-makers are either too afraid or too incapable of doing a proper RCA and triage of the problem. It feels like we've been treating symptoms and not the problem(s).
The problem with cash grants is something that does not show up when there is a Columbia professor watching things. And that is that the money gets stolen.
Many poor countries suffer from corrupt callous and cruel leadership. And this means that the people in power tend to steal from the poor. Thus, if some organization tries to
give cash to the poor there is a high likelihood that the money will be stolen and sent to a swiss bank.
It is much more difficult to steal bags of grain with "US AID" printed on them. They are heavy transport is expensive and no-one will pay full price for bags of grains that say US AID on them because they will know it is stolen. If you want to re-bag the grain, it will be a lot of work, and you will have to hire many workers some of which may inform the US embassy. Thus, once the US government dumps a bunch of grain in a poor place, even the evil corrupt warlords tend to leave most of it to the poor because it is too difficult to steal it and sell it.
There is a similar problem with cash crops. Initially when I heard activists complain about cash crops, I said "what is the problem? Farmers should farm cash crops in order to get the maximum amount of money for their land and labor." Well the problem is that if you plant cash crops (such as coffee, cocoa, etc.) you have to sell them to get some money out of them. But the local corrupt official and/or warlord will take control of all the merchants and make sure the farmers receive very little and take most of the money for himself. If, on the other hand the farmers plant ordinary food, it is very difficult for warlord to steal it. He will have to make his troops do actual agriculture work to steal the food, and they hate that.
So this will only work for countries with relatively strong civil society and there are very few of those among the poor countries.
I've heard (from people like Andrew Mwenda) that say that Western aid to African governments ends up not helping the citizenry and just props up bad governments.
Aid that completely bypasses corrupt governments and goes directly to citizens seems to be less likely to be stolen by middlemen. If you look at Give Directly (http://www.givedirectly.org/faqs.php) they send cash directly to a person's cell phone, and their audits have shown very little money being lost to corruption.
> Aid that completely bypasses corrupt governments and goes directly to citizens seems to be less likely to be stolen by middlemen.
Pretty much by definition it is less likely to be stolen by middlemen, since anyone stealing aid that goes directly to individuals without going through middlemen is not a middleman.
Whether it is less likely to be stolen -- or even whether it is less likely to be stolen by the government -- is a completely different story.
As other posters have pointed out, using mobile payments bypasses corrupt middlemen. Afghanistan has started paying rural police using mobiles, and some of them are seeing "raises" >1/3 their salary.
I don't think this has been a significant problem for Give Directly, which sends money to people directly via the M-PESA cell phone network, in reasonably small amounts at a time, and with unpredictable timing. There's no easy access point for a corrupt official to swoop in and become involved.
Right. That's important to make this program work, and it's an unusual set of circumstances. Not many places have both extremely poor people and a high-quality mobile payment network!
Bad stuff can still happen: people could potentially be swindled or harassed out of their cash once they get it. But at least getting it there is a huge step.
Also, perhaps one thing you can take from this is that a full-featured mobile payment network needn't be thought of just as conveniences for the first world. It also makes stuff like this possible.
Actually, pretty much only places that have lots of extremely poor people have high-quality mobile payment networks, because they're the only places where there's a market.
A similar research based on the land lotteries in Georgia in 1832 and in Oklahoma in 1901 showed that outright increases in wealth (i.e., winning the lottery) had little or no effect on generational wealth. There was also another similar research on the land lotteries which showed negative effect on generational wealth.
The only way countries have /ever/ developed is by the production of value, products that a market wants to buy, usually an export market. Handing out free money doesn't help to achieve that goal. It just perpetualtes dependence.
It seems to be the "new hip thing" within the aid-industrial complex, though. I hope it will not do too much damage to these societies, like many of the previous "effective forms of aid" did.
I think the argument is that initial capital can jumpstart that production of value. If you spend 10 hours a week maintaining your straw roof, and then someone buys you a metal roof, you can now spend those 10 hours a week on an exportable trade/product.
Production needs to be efficient in order to compete. Efficiency needs knowledge. These "groups of poor" lack that knowledge. And the amount of free money is way to low to produce anything with enough surplus value. How many unskilled carpenters, metal workers, and hair stylists do they need? I am currently in Kenya, and the amount of barber shops is amazing.
Production of value is stuff that a country can export, to earn hard currency that can buy knowledge to increase the country's production efficiency. Like Taiwan did, and Korea, and Malaysia, and China, and any country that has ever successfully developed in the past 70 years.
But the aid curse will not allow it, unfortunately.
I think both these explanations are missing that there are many factors behind successful economic development, and increasing one factor of production will help if it is the limiting factor, but hurt if it is already abundant.
If you give money to people who already have technical know-how, a willing market, a solid distribution network, and a stable legal system but just lack access to capital, it will usually have very good returns. If you give it to people who have none of these, it will get spent on whatever good happens to be available, usually booze. If you replace the government of a country that has capital, an educated populace, and solid infrastructure but suffers from endemic corruption and lack of solid legal foundations, you will probably also help spur economic development.
What I wish more poverty-alleviation problems did was focus on identifying and eliminating bottlenecks to economic growth. The casual American readership loves to think there's one solution and then loves to argue over what it is, but I don't think it works that way. Poverty is complex; the reason that inner-city Baltimore is poor is very different from the reason Kenya is poor, which is different from why rural China is poor.
This is only "surprising" to those who think they know how other people should live. I've always favored this approach (a minimum income, or negative income tax .. whatever you want to call it) as a replacement to all other forms of welfare.
If I am to spend my tax money on those in need, I do not want more than half of it going to upper middle class bureaucrats and middle class administrators.
How do you feel about things like Social Security Disability benefits? By most accounts there is some very real abuse of that social welfare program that could cause it to not be there for people who legitimately need it.
The cost of the abuse does not exceed the cost of losing the program entirely and leaving the non-abusers high and dry. It's not an ideal situation, but we are worse off if we throw the baby out with the bathwater.
No one suggests losing the program in its entirety, responses of like yours are straight up hyperbole. It is not a valid rebuttal to those looking to make corrective changes.
Far too many abuses are allowed to go on simply because of such arguments thereby reducing the aid we could give to truly needed people.
I am all for helping those in need, nearly 2% of my gross salary goes to CHOA each year, but damn if I am going to believe that there are people on one if not more of the hundred of government programs who don't deserve to be there. The best way to help people is to get more diligent about policing those we do help. Are they getting the right help is the question that we must answer.
> The best way to help people is to get more diligent about policing those we do help
Would the cost of doing that exceed the savings? If so (and that seems rather likely; the vast majority of social welfare recipients do _not_ cheat), it seems rather impractical.
In practice, people cheat in all systems, and a certain amount of cheating is built into the assumptions for any well-designed system. For instance, tax authorities do not audit everybody, because it would be impractical; in not doing so they accept a certain amount of tax fraud. Shops don't watch everyone who comes in the door all the time, because it would be impractical; in not doing so they accept a certain amount of theft (most of what accountants call 'shrinkage' is employee and customer theft).
If your win condition is "eliminate all cheaters", you've already gone to "ditching the program in its entirety". Human systems have defectors, otherwise game theory wouldn't exist.
If your win condition is "eliminate most of the cheaters", I'd like some proof that we're not already at the Nash Equilibrium for that with the current system.
The point is we are close to loosing the system because of the abuses though. The SSDI fund is predicted to be the first to run out of money which is projected to be only a few years away at the current rate.
I agree! This is why I've long argued that companies should be required to pay a portion of their employees' paychecks in nontransferable vouchers. If parents want to blow their I-Bank or Google paychecks on MacBooks, cocaine, and hookers, after responsibly buying jackets and healthy food for their kids, that's their prerogative. But the first $n0,000 should be paid out in restricted vouchers to make sure they provide for their kids first.
Another way to do this would be to have a Basic Income that pays out to minors separately from their parents, but into an account/card that, for minors, is restricted to certain products/services (somewhat like how foodstamps work, but more generally toward childcare/food/clothing/education-type products.) The parents would have power over the child's account, just as parents do today, but only given the same restrictions.
I think this is feeding into a prevalent and false narrative that persons in poverty are all drug addicts or welfare queens.
Christian Parenti really sums it up well when he describes American views on poverty in his book, The Soft Cage:
"In a society that denies the true causes of poverty—low wages and structural unemployment—the poor necessarily show up as objects of mystery to be examined, measured, interrogated, and indexed, or as James C. Scott would put it, made “legible.” In a society that hides the real mechanics of exploitation and sees all social phenomena through the lens of individualism, it is assumed that the poor—their genetics, their habits, or their culture—must be the true cause of poverty."[1]
Specifically with respect to your point about drugs:
"Reports such as the National Survey of Drug Use and Health suggest drug abuse among welfare recipients is hardly widespread. Many states have tried drug testing for welfare recipients with practically nobody testing positive. In Arizona, for example, in 2012, after three years and 87,000 screenings, one person had failed a drug test. Utah's drug screening program spent $30,000 on testing and only 2.5% of recipients turned out positive for illicit drugs. Florida's program had the same results.
"In all cases, the testing -- which assumes all welfare recipients are druggies -- cost much more than the savings in welfare payments."[2]
We need to stop acting paternalistically toward the poor and, instead, treat them as people who are capable of making their own decisions.
This is silly - the poor are not unemployed, structurally or otherwise. To be unemployed one must be looking for work, which most American poor are not.
Your source [2] also disagrees with you. When Florida implemented drug testing, they spent $46k to identify 108 drug users (presumably taking them off the welfare rolls). Unless welfare costs less than $425/person, that's a net savings. Further, according to the article linked to by [2] (http://usatoday30.usatoday.com/news/opinion/editorials/story...), the actual number in Florida is closer to 2000 people since 2000 people withdrew their welfare applications when they reached the drug testing stage.
(The comparable number in Utah was $2000/person, if we assume Utah's program had no deterrent effect whatsoever. Arizona's program seems less effective, likely because the drug tests were easy to avoid - just don't tell the welfare clerk you do drugs and you can skip the test.)
Let me quote the first paragraph, which you apparently didn't read:
...46.2 million people...lived below the official poverty level...10.4 million individuals were among the “working poor”
in 2011... The
working poor are persons who spent at least 27 weeks in
the labor force (that is, working or looking for work )
> This is silly - the poor are not unemployed, structurally or otherwise. To be unemployed one must be looking for work, which most American poor are not.
You're not accounting for those that have given up looking for jobs. Additionally, the report mentions that children are also included in the 46.2 million people below the poverty level. Also, if you know anything about the workings of Temporary Assistance for Need Familiies (TANF), the main federal block grant for welfare as defined under the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), then you know that 1) welfare recipients must work for 24 months to continue receiving welfare, and 2) that there is a 5-year lifetime limit on being in welfare [1]. So, though your report mentions that most people below the federal poverty line, there's plenty of evidence to assume 1) those who aren't working are also not on welfare, with the possibility that 2) those who aren't looking for work have simply given up, as is the case for many, many Americans post-2008 recession.
> Your source [2] also disagrees with you.
Clarification, if anything the source disagrees with itself since the entirety of my use of it was within quotation marks. That said, I don't think it does disagree with itself. 1) We have no idea what the welfare/person spending was, as you note, so it's "silly" to assume that there were obvious net savings when we simply don't have the data. If you're not willing to trust the source on that, then at least trust the numbers for Arizona and Utah. Secondly, you say that "the actual number in Florida" was close to 2000, that 2000 people withdrew their applications when reaching the drug testing stage. You're obviously implying that they withdrew because they were on drugs and wary of not passing the test. You fail to mention the financial aspect to the drug tests--the welfare applicants themselves had to pay for the drug test according to the source you link to [2]. It was highly plausible, as noted in the article, that the ones who didn't take the test couldn't net that amount of cash.
As to Florida's program itself, it was deemed unconstitutional and stopped since it "unconstitutionally mandated searches without suspicion."[2] This was for the same reason you note that the Arizona program was "less effective"--namely because it didn't assume that just because a person was poor, they were using drugs.
You're not accounting for those that have given up looking for jobs. Additionally, the report mentions that children are also included in the 46.2 million people below the poverty level.
I certainly am accounting for those who've given up. They are "not looking for work", i.e. not unemployed. Accounting for children does change the fact that the poor choose not to work https://news.ycombinator.com/item?id=2130441 .
As for your assertions that paying $30 for a drug test prevented people from applying for welfare, that doesn't pass the smell test. Anyone who passed was reimbursed, and welfare pays well over $30 anyway. If you want to hang your hat on the fact that I haven't found a source proving that welfare costs more than $425/person, be my guest.
(On a side note, a "large bag of cocaine" sounds like a business investment, investing in the highest return commodity available to the investor... not that I condone it, but it is somewhat different from what I assume you intended, namely buying recreational drugs for personal use rather than providing for one's children).
Well, "data" might not have been the best choice of words. I was thinking back to the times I've seen, interacted with, or heard second-hand of drug addicts (or read studies) -- and I couldn't think of any cases where the statement hold true. The only context I could see it as true, was as an (unfounded) prejudice.
So, I was really just wondering if you've ever had any first or second-hand indication that your assertion isn't just bullshit.
Depends on the program, but generally it ranges from 0 to 20%, most being right around 10%. This changes when republicans win on their "voucher" planks, when suddenly the overhead skyrockets because there are for-profit entities in the loop.
As I understand it, the idea of a voucher is that the for-profit entity receives the money after the end beneficiary does, which wouldn't affect how much the end beneficiary gets. What are you talking about?
Some programs, like schools, dispense services rather than cash. If you're talking about direct payment programs these are extremely efficient: 4.5% for SCHIP in 2005, for example. Other direct payment programs have higher overhead because they are means-tested (another conservative victory) and it costs money to administer means-tested programs.
Amusingly, the US state of Florida in 2011 enacted another one of those republican favorites, the drug test for welfare recipients. In practice it cost more to administer the drug tests than they saved by throwing the positive results out of the program, because it turns out that welfare recipients are far less likely than the general public to use drugs.
A lot of "voucher systems" (a) impose overheads, which are generally paid by the donor and not the participating company or (b) use hidden, non-open-market (and potentially higher) pricing.
I've only read the article and not the underlying paper, but it seems to be saying a $400 grant yields an average annual return of 40% - it would seem that would make it viable as a loan scheme rather than a grant scheme (maybe in terms of a loan that automatically gets written off after X years so it's a pseudo-grant).
It's important to note also that they're using the group effect that are also popular among microlenders, in that the grants are made to groups of individuals so you'll have some degrees of the individuals checking up on each other.
It's all about state of mind. People who actually want to make a living, start businesses, create wealth, and live responsibly VS those who just want to be parasites. Attitude is what matters...
I wonder if this could be applied to rich countries: give $500/month to each adult citizen. No questions asked. Unlike many existing programs for the very poor (http://en.wikipedia.org/wiki/Revenu_minimum_d'insertion) it would not dissuade them from working (if you work you just earn more) and would be really easy to administrate (there are no criteria).
You would need to make living on $6000 a year practical as well. It's not as hard as people think, as if you're not working you don't need to locate yourself in a city or bother with transportation, but there are structural changes that need to be made. The big two are probably housing deregulation (consisting of (i) seriously scaling back zoning laws and (ii) removing laws limiting occupation density) and fixing the health care system (no easy answers there). It's a complicated issue.
It seems to me that if everyone has an extra $500, the likely result is rent, etc. rises to compensate, and you wind up with essentially the same social situation just with all the prices offset slightly.
If you give everyone $500 and then take $500 back from most people in taxes that just seems like you're shifting around the conditional evaluation of the necessity of aid to the IRS instead. It's still conditional aid, it's just more obscure how it works.
I remember there was an article on HN not so long back about why poor people dont trust banks. Well, without bank accounts how do you process billions of dollars of micro-cash payments ?
Actually, this is the biggest reason for the build out of the Aadhaar project or the Indian biometric ID project. It is less for reasons of trying to track the common citizen (although I dont doubt for a moment, it will come to be used like that), but to ensure credible, direct debit of cash to the poor.
I wonder if requiring applicants to "form a group with others in their village and submit a proposal showing how they planned to use the money" had anything to do with their success. It's not like they just dropped money out of a plane. And the fact that these grants were funded by a World Bank loan seems to undercut the headline even more.
Give Directly is the subject of this writeup[1] on GiveWell, and this excellent episode[2] of This American Life.
[1]: http://www.givewell.org/international/top-charities/give-dir...
[2]: http://www.thisamericanlife.org/radio-archives/episode/503/i...