Poor Relief Why Giving People Money Is Not The Answer To Global Poverty

p>An economist challenges an emerging orthodoxy: the idea that the best way to alleviate poverty is simply to give people money. A simple notion has become increasingly widespread in recent years: to lift people out of poverty, just give them money. Leading international organizations like the World Bank and United Nations endorse the use of cash transfers. So do Bill Gates, Mark Zuckerberg, and everyday philanthropists—the charity GiveDirectly has raised more than $800 million to distribute to households in a dozen countries. Challenging this emergent wisdom, Heath Henderson argues that cash transfers—whether one-off grants or a “basic income” provided over a stretch of time—are a flawed response to global poverty. They risk displacing interventions that recipients themselves might prefer: if a community lacks access to clean water or high-quality healthcare, for instance, giving cash to households will not address the problem, which can be solved only by putting those funds toward public infrastructure. Cash transfers have also been linked to more direct harms, including increases in domestic violence, child labor, inflation, and even mortality.