Last week, Newsweek published a story about how a growing strategy against global poverty is showing strong signs of success. The plan isn’t about infrastructure, or making necessities like food, water, and education more readily available. It involves handing out cash directly to those who need it.
As she approaches her 50th birthday this month, Zanele Figlan has seen firsthand what does and does not work in the fight against global poverty. Living in a shack on the outskirts of Cape Town, her family serves as a reminder of South Africa’s 15-year failed effort to house its poor. Instead, Figlan says, the most effective help she receives is the $1 a day the government provides for each of her two youngest sons, which amounts to more than double her monthly income and allows her to make sure they’re well fed. It also means she can afford to send them to a reputable school in a wealthier part of the city, something that was previously unthinkable.
At first glance, simply handing out cash to the poor may seem naive. When cash-transfer programs, as they’re known in the parlance of international aid, first rolled out in Latin America in the 1990s, they were met with skepticism, especially from development agencies more intent on structural reform than redistributing wealth. More than a decade later, however, evidence shows that even modest payments grant the world’s poorest the power to make their own decisions; it also indicates that they make smart choices, especially on matters of health and education. Today, cash-transfer programs are thriving in some 45 developing countries and helping more than 110 million families. The World Bank has put at least $5.5 billion into nearly a hundred different projects.
What some may find most shocking of all is that attaching restrictions to the funds actually decreases their overall impact:
One of the biggest impacts of these programs: education. Since its launch more than a decade ago, South Africa’s Child Support Grant has cut the number of children out of school in half. South Africans are free to use their payment any way they wish, but some countries require school enrollment to keep the money coming in. “It changes the dynamics of the way people conceptualize welfare,” says John Hoddinott, a senior research fellow at the International Food Policy Research Institute. “Both parties have rights and responsibilities.” In many cases, however, simply having cash in hand allows parents to keep their children in the classroom. “Poor households … need the labor of their children; that’s why they don’t send them to school,” says Santiago Levy, the architect of Mexico’s cash-transfer program, now called Oportunidades. But what works in one country doesn’t always work in another. In Malawi, one of the least-developed countries in the world, the World Bank compared two different groups of school-age girls: one was given cash only if they went to school; the other was simply given the money. The results showed little difference in attendance. In fact, those without conditions fared better when it came to reducing teen pregnancy and teen marriage, factors that often pull Malawian girls out of the classroom.
Now, it should be against emphasized such ideas aren’t really “new.” Activists working on poverty issues both locally and globally have advocated similar plans for a long time. But they can certainly use all of the good press that they can get, because convincing people in powerful positions, and those who vote them into office, that the idea has incredibly strong merits is an uphill battle.
The strategy is rooted in a simple idea: people generally know what’s best for themselves. A whole lot better than those on the outside, who often don’t recognize or understand those needs, let alone the cultural and structural barriers preventing those needs from being met. I hope all of us here can agree that at the very least, countries and organizations providing aid should be doing so by asking the people in question what will improve their situation, and putting those people on the front lines of the decision-making process, rather than making an assumption and running with it. But even then, the idea of just handing out cash can seem pretty radical.
It should be said up front that giving funds to individuals doesn’t solve structural problems. No one’s claiming it does. Indeed, the Newsweek article itself notes this:
That said, cash-transfer programs are hardly a magic bullet. Giving money to poor mothers may increase school attendance, but it has yet to show it can improve dysfunctional schools or actual learning. Developing countries and international donors will have to find other ways to improve the quality of both health care and education.
There is no magic bullet to a problem as encompassing and multifaceted as global poverty. There’s no way to undo centuries of colonialism, imperialism, all other kinds of -isms, and capitalist damage overnight with a single course of action. The point isn’t that structural change is unnecessary, but that trying to change structures without giving individuals resources tends to not work as well as we’d hope. It seems that starting out with individuals and giving them the freedom and agency to make their own decisions — you know, treating them like adult human beings rather than a monolithic group or a “cause” — does a lot more good.
So why the political and popular resistance to cash-transfer type programs from countries and organizations that have the means to provide large amounts of aid, when they’ve been repeatedly shown to have a consistent positive impact? In part, because in the U.S. and other Western nations, we have pervasive stereotypes about poor people being lazy, irresponsible, and to blame for their own poverty. If only they made better choices, “we” say, and learned how to spend and save their money better, they could lift themselves up out of poverty and join the ranks of the middle class. As a result, there’s a middle class culture of people not wanting to give “their” money to low-income people, at least without highly restrictive and oppressive strings attached — after all, they haven’t earned it, and they’ll just waste it anyway. Of course, while this is a blatant, classist, racist myth in the U.S. and other Western nations where wealth is concentrated, it’s downright nonsensical when applied to people who live on less than one dollar day. And yet, the myth still seems to stubbornly hold.
There’s the further issue of these types of programs looking just a little bit too much like socialism. They are, after all, wealth redistribution. As long as socialism remains the big bad boogie man, especially in the U.S., there is going to be resistance. As long as people refuse to admit that unrestricted capitalism got the world into this mess, they’re not going to be willing to acknowledge that neither pure unrestricted capitalism nor traditional models of “charity” can get it out.
And another facet to the resistance is just good old-fashioned imperialism. Wealthy white-dominant nations remain convinced that they are rich because of a culture of hard work, rather than a culture of colonialism and theft. They thus also remain convinced that poor nations are poor because of a culture of laziness and poor values — or, at the very most generous, pure bad luck — rather than, much more commonly, because of histories and presents filled with colonization and oppression. Acknowledging the real reasons behind global poverty would require rich Western nations to take some responsibility, first of all. Secondly, it would cause powerful, wealthy, white-run nations to lose their sense of superiority over poor and overwhelmingly non-white nations and people. It would “rob” the U.S. and other countries of their supposed god-given right to “save” less fortunate people, to spread their all knowing sense of rightness, to enforce their system of beliefs regarding capitalism and social mores. If we, as Western nations, don’t attach strings to foreign aid, then we have no control over what recipients do and can’t make them listen to what we say.
And while that sounds utterly brilliant to me, there are a whole lot of people who unfortunately still have a problem with it. Even a lot of progressive folks will likely feel an immediate sense of uneasiness or even outrage the moment they see a recipient of a cash transfer use it to do something ethically questionable or even downright oppressive — forgetting that wealthy Western folks have been using cash in ways more powerful and oppressive than these recipients could ever dream for countless years, only to have no one bat an eye, let alone demand an immediate relinquishment of all of their funds.
That’s something I think it’s important to remember, in this discussion — while a vast majority of recipients of cash transfers have been shown to use them in ways that have been officially deemed “smart,” some will inevitably use them to do things some or most of us just flat out don’t like. But that is, frankly, precisely what people do with money. Always. Everywhere. And if it’s “our” right, then it should be considered “theirs” too.