Thursday, January 20

$6! Woo-hoo!

Development agencies have long discouraged cash handouts, favoring "in-kind contributions," believing it's better to provide people with necessary items, rather than simply giving money.

In theory, this works. For example, you might value a shovel more than cash, if there's no one to sell you a shovel. However, a shovel is useless if you're sick and can't afford clinic fees. Often, desperate people sell or trade goods for much less than their value, ultimately leaving them poorer than when they started.

A recent study claims that cash might be more valuable than material goods. According to Dr Bernd Schubert, a consultant to the Social Safety Net Project, providing $6 a month to the "critically poor" allows them to pay for necessities or invest in seed or livestock: "The transfer [of cash] does not lift the beneficiary households out of poverty; it just lifts them from critical poverty, which is life threatening, to moderate poverty." Evidently, participants reported better school attendance, more frequent meals, and increased investment.

I wonder what this means for Zambia's many Food for Work Programs. Anyway: the complete report -- The Pilot Social Cash Transfer Scheme -- is available for your reading pleasure.