Christopher Blattman, an associate professor at Columbia’s School of International and Public Affairs, thinks giving cash to the poor is a good idea. Not free meals, not tickets to redeem for food, but cash. And it just might work.
Blattman writes in The New York Times of the experience of giving cash to the poor. The knee-jerk reaction to this idea is, “Well, they’re just gonna waste it.” But Blattman finds evidence to the contrary.
Globally, cash is a major tool to fight extreme poverty. The United Nations is handing out ATM cards to Syrian refugees alongside sacks of grain. The evidence suggests these cash programs work. There have been randomized trials of cash grants to poor Mexican families, Kenyan villagers, Malawian schoolgirls and many others. The results show that sometimes people just eat better or live in better homes. Often, though, they start businesses and earn more.
Blattman writes that he and some colleagues worked with a non-profit in Uganda that offered $150 and five days of business classes to women. After a year and a half, these women had twice the income of a random control group. Blattman bluntly states that the poor do not waste money.
So, that’s Africa, one might say. What about the folks on the streets of New York City? Surely, they’ll waste money on alcohol and drugs, right? Here is Blattman’s take:
I used to believe this. Now I’m not sure. A few years ago, I started working in Liberia’s urban slums. My colleagues and I sought out men who were homeless or made their living dealing drugs or stealing. Many abused alcohol and drugs. We tested different programs in a randomized trial of a thousand men. One thing we tried was giving out $200 in cash.
Almost no men wasted it. In the months after they got the cash, most dressed, ate and lived better. Unlike the Ugandans, however, whose new businesses kept growing, the Liberian men were back where they started a year later. Two hundred dollars was not enough to turn them into businessmen. But it brought them a better life for a while, which is the fundamental goal of any welfare program. We also tested a counseling program to reduce crime and violence. It worked a little on its own, but had the largest impact when combined with cash.
I haven’t spent any time with the homeless in the United States. Maybe I’d see that the differences are profound. But I ask myself: If homeless people and drug users in Liberia don’t misuse cash, why would we expect the homeless in New York to waste it?
We must begin to step away from paternalistic notions of the poor, and find creative long-term solutions to poverty that allow the poor themselves to be in control. Why not cash?