Wyly Wade

Give the poor cash! African village gets $1000 what do they do?

Graphic: African continent

This is a great study that looks at direct cash transfers for the poor. The crowd that argues that the poor will drink or waste cash have clearly not spent enough time in the field or are only interested in social engineering. There is almost 20 years of studies and evidence that shows that direct cash subsidies actually help improve the lives of the poor. Look at Bolsa Familia or any of the other examples of cash transfers and you will see an improving bottom two quintiles.  This study goes one step deeper and discusses while many used the cash to start businesses without education on finance the businesses get stuck not being able to access expansion capital.

“This puts the choice in the hands of the poor, and not me,” Michael Faye, one of GiveDirectly’s co-founders told me. “And the truth is, I don’t think I have a very good sense of what the poor need.”


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