By Dylan Matthews, Vox
Giving cash directly to the poor is relatively easy. It respects the decisions of poor people as to how to spend it, and it avoids the central planning challenges of some other anti-poverty policies. Moreover, there is, I think, pretty good evidence demonstrating its effectiveness.
But “pretty good evidence” doesn’t mean “all the evidence,” and “effective” doesn’t mean “a panacea.” A new paper from development economists Chris Blattman, Nathan Fiala, and Sebastian Martinez complicates our picture of cash transfer programs, and suggests that the best way to think of cash is as a way to speed up poor people’s escape from poverty, rather than as the key to helping them escape poverty in the first place.
The paper is about a program in northern Uganda, which with a GDP per capita of $2,352 (compared to $59,495 in the US) is among the poorest countries on earth; the north has endured years of violence driven by a terrorist organization called “the Lord’s Resistance Army.”