Research Finds Outright Grants of Cash are an Effective Form of Aid to the Poor
news.columbia.edu
news.columbia.edu
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...
1) Cash transfers intervention report--talking about where recipients spend the money, GiveWell's worries about transfers, and studies on the topic: http://www.givewell.org/international/technical/programs/cas...
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/
3) Responses to objections on cash transfers--mostly about more in-the-weeds issues, like how to interpret their numerical comparisons among cash, bednets and deworming: http://blog.givewell.org/2013/07/31/responses-to-objections-...
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.
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.
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
[2] Same thing was said, perhaps better, by http://www.quora.com/Development-Practice/Are-bednets-really...
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.
My experience living in central Africa is that "whiteness" of a "cochon gratté" has nothing to do with skin color.
(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?)
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.
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.
I wrote a bit more about my approach to charity here: http://blog.printf.net/articles/2012/11/27/celebrating-seven...
> 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.
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.
http://www.sfgate.com/entertainment/article/The-Untied-Way-e...
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.
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)
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?
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.
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).
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.
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
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)
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.
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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.
You're absolutely right, thanks for the correction.
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.
Families who won the lottery reverted to the mean in a generation or two: http://home.uchicago.edu/~bleakley/Bleakley_Ferrie_Intergen....
(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.)
Families who won the lottery reverted to the mean in a generation or two
A small event known in the US as the Civil War, which completely decimated the economy of Georgia, just might have had something to do with this.
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.
"...which had nearly universal participation among adult white males."
White males is a lot less than almost everyone. Its not even most people.
Are you aware that many kids in America grow up without access to even a basic grocery store and decent nutrition? Starvation can be slow and steady.
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.
And for what its worth, i live in cambodia and have lived on such a budget, albeit only for 3 months.
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.
Edit: -1? Impress me.
Illegal immigrants, homeless with no ID.
It's not a rich country, but people eat.
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.
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).
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.
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.
http://techcrunch.com/2010/10/17/m-paisa-ending-afghan-corru...
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.
http://www.stanford.edu/group/SITE/archive/SITE_2010/segment...
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.
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.
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.
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.
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.
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 most of the cheaters", I'd like some proof that we're not already at the Nash Equilibrium for that with the current system.
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.
[1] http://openlibrary.org/books/OL7593829M/The_Soft_Cage
[2] http://www.cnn.com/2013/09/30/opinion/granderson-michigan-we...
http://www.bls.gov/cps/cpswp2011.pdf
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.)
...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 )
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.
[1] http://www.gao.gov/new.items/d0258.pdf
[2] http://usatoday30.usatoday.com/news/opinion/editorials/story...
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 .
The fraction of the poor who choose not to work was low before the recession as well. http://www.bls.gov/cps/cpswp2006.pdf
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).
So, I was really just wondering if you've ever had any first or second-hand indication that your assertion isn't just bullshit.
I wanted to trigger the discussion of paternalism using a stereotype to see what kinds of arguments for paternalism emerged.
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.
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.
Sometimes, a person needs a little push - or some initial help to get off the ground.
What are your views on all the entrepreneurs seeking funding - would you consider them parasites?
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.
The key word here is "basic income", and it's surprisingly liked by economists, as I understand it.
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.