07 July 2010

The "Just Give Cash" Bandwagon

This week's Sunday Times' article New Ideas for the 21st Century column entitled (misleadingly) "Stop the aid -- it's cash that ends poverty" is a good example of the dumbing down of international development that I am seeing more and more of during these austere times. The column argues that giving cash to the poor is one of the most effective things that donors and governments can do to reduce poverty (I just realised I can't link you to it because the Times is now charging for online content).

Of course cash transfers to poor households have positive impacts on a whole range of things that we all care about such as hunger, nutrition, schooling and child labour. Why would we expect anything else? Do we seriously expect households living at the edge of survival to fritter the cash away on non-essentials? No surprises there.

The real policy issues are much more nuanced. Could this money be used more effectively for something else (e.g. strengthening the services that can be purchased)? When should co-responsibilities (see a nice series of short articles edited by Stephen Devereux on this) be attached to receipt of the money (e.g. parents seeking preventative health care for infants)? How do households graduate from such programmes without bankrupting the state? How can the cash transfers increase the household's contact points with other services ("cash plus") such as agricultural extension workers or health workers?

But the main problem with the article is that it implies that much of this can be led by the donors. It can't. There have been too many donor driven pilot schemes in sub-Saharan Africa that have not taken off due to lack of political support. The successes cited in the article have been home grown: Mexico, Brazil, South Africa. What donors can do best is to be nimble, nurturing and flexible enough to support home grown political energy for cash transfers when and where it exists. This is what donor support for cash transfers should prioritize and it is what aid more generally should seek to do.


rob van den berg said...

I agree with your concerns - however, dumb ideas about aid have been floating around since aid began. The problem is that in austere times they gain political clout and could be picked up by a political party. And the UK with its current coalition seems relatively immune to this! I'm also concerned about the dumbing down of professional ideas about development, like some "randomistas" who claim nobody knows what works and what doesn't, and please let them do randomized trials in order to find out. Well yes, let's do a randomized trial on climate change...
In the Netherlands a concerned group of highly regarded "elderly statesmen/women" made an appeal to the political parties who are now trying to form a coalition government to give sufficient priority to international development issues. If ideas like these gain ground, perhaps the UK should have a similar initiative?

Claire Melamed said...

Hi Lawrence, as one of the authors of the article in question, of course I am going to defend it. I'm not quite sure what the 'dumb' bit of the article is that you're objecting to. I agree entirely that it seems incredible that anyone would be suprised that when you give people money they spend it well - but, sadly, the fact remains that many people continue to assume that if you give money directly people will fritter it away on booze and fags. That is one of the reasons for political reluctance to implement cash transfers in many countries - and a big theme of discussion of welfare reform in this country too, of course. So proving, again and again, that people do use the money well is an unfortunate necessity. Unless we do that, then all the policy issues that you quite rightly point to as the really interesting questions, will be moot, since cash transfers won't even be on the agenda.

And of course donor support for cash transfers should be 'nimble, nurturing and flexible' - saying that donors should pay attention to cash transfers is not to say that they should do it badly - the same principles apply to a cash transfer programme as to any other kind of programme that donors may be supporting. But, as I am sure you will appreciate, a more nuanced piece about the difficulties of targetting or the pros and cons of different forms of conditionality in cash transfer programmes is unlikely to have made it into the Sunday Times. And I do think that it is good for development issues to get an airing in the mainstream press - not at any price, but accepting that there will be limits on what you can communicate.

Aside from the delivery and detailed policy issues, what I find most interesting about the whole cash transfers movement is why it has taken so long. Why, as development professionals, have we not looked in our own backyard at how poverty is dealt with across Europe, but instead somehow assumed that poverty in other countries needs a whole new set of ideas and systems. One might speculate on why that is - all of the possible answers make me quite uneasy about the profession that I am in, but perhaps that is best left for another day.

Joe Hanlon said...

As the other article author and one of the authors of the book on which this partly draws, "Just Give Money to the Poor", I largely agree wih Lawrence Haddad. We subtitled the book "The Development Revolution from the Global South" precisely because this is an agenda being set by southern governments paying for cash transfers from their own taxes. And northern governments should be supporting such southern driven programmes not through more pilots, but by putting money into national government cash transfers of the poorest countries.
On the issue of co-responsibility, I am afraid Haddad is guilty of dumbing down. The issue is rather complex -- if co-responsibility means a mother cannot take a job because she needs to attend meetings, is this a good thing? Read the book for a much more extensive discussion.