Glynn Marshes writes:
that’s trying to help poor people in the developing world in an unusual way: by sending them money with no strings attached.
Skeptics thought “the poor” would blow the free cash on gambling and alcohol and cigs. Turns out they didn’t.
“Instead we see them investing in their kids’ education, we see them investing in health care. They buy more and better food.”
But there’s a problem.
Even though households were spending more on health and education, it didn’t seem to be having much effect. People who got money were sick just as often as those who got less. And school attendance rates for their kids didn’t really change . . .
IOW, they spent their free money “wisely,” but the outcomes weren’t what their benefactors would have liked.
Caveat. In another study in Uganda,
the government gave people money and people’s incomes went up — and stayed up, even years later. People had used the money to start small businesses, like metal working or tailoring clothes.
And one of the GiveDirectly founders asserts (giddily?) that having more money reduces stress, and when you’re less stressed, you’re better able to cope with organizing your life to improve your circumstances. Sounds reasonable to me . . . only — what if a bit of gambling, alcohol, and cigs helps you relax? Heh.
Other question: if no-strings-attached cash doesn’t improve “outcomes,” doesn’t it follow that — if your goal is to improve peoples’ lives — you need to force them to consume services designed to drive your desired outcomes?
Force kids into school. Force people to consume healthcare services. Force people to save their money.