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Check back in 12 years

December 10, 2016

This is interesting news, particularly since it’s being privately funded and the benefits are non-directed.

A Privately Funded Experiment in a Universal Basic Income
Dozens of villages in Kenya will soon be receiving payments.

A U.S.-based group is preparing a pilot program in Kenya that will test the effects of a universal basic income—the increasingly popular concept of giving virtually everyone in a community unconditional payments on a regular basis. Unlike past large-scale experiments of this sort, this one is being run and funded privately.

The organization behind the effort is GiveDirectly, a charity whose work in Africa is based on the idea of giving people cash without restrictions on how the money can be spent. (The underlying anti-paternalist principle is that the needy know their needs better than outsiders do.) That outlook led naturally to an interest in the basic income, and so the organizers conceived a randomized control trial:

• In one set of villages, every adult will receive monthly payments equivalent to 75 cents a day for two years.

• In another set of villages, every adult will receive such payments for 12 years.

• In yet another set of villages, the adults will receive a single lump-sum payment equivalent to what the two-year group will be receiving.

• The last set of villages is the control group, so they don’t get any money at all.

The aim here, GiveDirectly’s Ian Bassin explains, is “to isolate the effects of what most people consider a ‘basic income’—that is, a permanent payment over time—from something resembling more traditional temporary supports. For example, when someone knows they have a long-term, guaranteed floor below which they cannot fall, do they take more risks like starting a business or going back to school? And does that security produce greater overall returns?” […]

The good news is that this isn’t a USAID program. The problems with government-to-government aid in Africa have been pretty well documented.

Even private aid to Africa has its pitfalls. When the price of clothing or shoes goes to $0, that puts the local textile and shoe makers right out of business.

I have to wonder what happens when these GivingDirectly programs end. Or, if they’re continued indefinitely, at what point their participants become ineligible because of income or assets.

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