Just Give Money to the Poor

Books like Lords of Poverty and The Road to Hell have left me skeptical about the intentions and effects of much development aid (though not as skeptical as Dambisa Moyo, author of Dead Aid.)

AfricaFocus alerted me to a new book that argues what we might have suspected: that poor people can use money effectively on their own, and that the best way to help them may be simply to give them the money.

Discussing poverty with a Washington Post reporter last month, 5th graders at a Southeast Washington school (the poverty rate for Washington, DC is 32 percent) came up with an obvious solution. “Why not just give them money?” (Washington Post, May 11). Experts and policy-makers have found it easy to dismiss this common-sense suggestion, in favor of magical belief in trickle-down economics or of elaborate poverty-reduction plans. But a new book brings together weighty evidence that in fact the children are likely to be right.

In “Just Give Money to the Poor: The Development Revolution from the South,” Joseph Hanlon, Armando Barrientos and David Hulme look at the experience of recent cash transfer programs, in countries ranging from Mexico and Brazil to South Africa, Namibia, India, and Mongolia. The verdict: cash transfers work if they are both fair and assured. If poor people have even small amounts of regular ensured income, they are in general well-equipped to decide how to use it most productively. And the results not only alleviate immediate hardship, but also contribute to longer-term economic development and poverty reduction.

Africa Focus provides some links for buying the book.